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Al Mayadeen's correspondent: Two were martyred in an initial toll of the Israeli drone strike that targeted the al-Asira neighborhood in the city of Baalbek, eastern Lebanon
Al Mayadeen's correspondent: An Israeli drone strike targeted the al-Asira neighborhood east of Baalbek, eastern Lebanon
Sheikh Naim Qassem to the pager attack survivors: You are the greatest resistance. Know that 'Israel' will fall because it embodies aggression, crime, and occupation; victory is truly yours
Sheikh Qassem to the pager attack survivors: The value of what you are doing despite your wounds is immense, and here you are, treading the path of the Master of Nation's Martyrs and the leaders
Sheikh Qassem to the pager attack survivors: You are moving forward with insight deeper than sight itself. The enemy sought to eliminate your role in the battle, yet you remain steadfast and continue the fight
Hezbollah Secretary-General Sheikh Naim Qassem to the pager attack survivors one year later: You are healing from your wounds and rising above them. You have successfully passed the test
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Egyptian PM Mostafa Madbouli: Egypt is targeted in plans to redraw regional map
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Reuters: Russia asset seizure could trigger global collapse

  • By Al Mayadeen English
  • Source: Agencies
  • 13 Mar 2024 13:01
  • 2 Shares
3 Min Read

A European Union official has emphasized the necessity for Brussels to establish an "emergency mechanism" in case the EU initiative to financially support Kiev using funds from Russia encounters unforeseen consequences.

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  • European Union flags fly outside the headquarters of the European Commission in Brussels. (AFP)
    European Union flags fly outside the headquarters of the European Commission in Brussels. (AFP)

A senior EU official stated that while Brussels is exploring legal avenues to transfer frozen Russian assets to Ukraine, it should reserve a portion of the funds as a "safety net" in case Euroclear, its clearing house, encounters difficulties that could potentially disrupt the entire global financial system, as reported by Reuters.

The West has frozen approximately $300 billion in assets belonging to the Russian central bank since the onset of the Ukraine war two years ago, with Euroclear in Brussels holding roughly €191 billion ($205 billion) of these assets. The EU is reportedly expediting the decision to allocate the first installment of up to €3 billion from the profits generated by frozen Russian assets to Kiev, with plans to do so as early as July.

However, according to an unidentified EU official speaking to Reuters on Tuesday, Brussels must guarantee that financial stability is not compromised. The source added that once the war concludes and all transactions can be finalized, any funds provisionally withheld will also be transferred to Ukraine. However, a substantial amount needs to be retained in Euroclear due to the anticipation of numerous claims against it.

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The official cautioned that if the West proceeds with expropriating the funds, the Russian central bank is expected to seize approximately €33 billion of Euroclear funds held in the national securities depository in Moscow. Additionally, Russia may pursue legal action to seize Euroclear cash from depositories in Hong Kong and Dubai.

Moscow has consistently warned of retaliatory measures if the West follows through with threats to confiscate Russian assets. Last month, the Finance Ministry stated that Western states and companies still maintain investments in Russia, which could be at risk if the frozen funds are accessed.

The EU official further warned that if Western banks initiate lawsuits against Euroclear for the loss of their investments in Russia, it could lead to the complete depletion of Euroclear's funds.

The official cautioned that Euroclear Bank, which holds over €37 trillion in assets globally, could face liquidity issues if overwhelmed by a multitude of lawsuits. In such a scenario, the Belgian central bank might be compelled to revoke its license, potentially triggering a global financial crisis.

Regarding the takeover of Russia's frozen assets to assist Ukraine, there is a division among Western nations. While the US and UK advocate for directly seizing the assets, certain EU member states like France and Germany have recently expressed concerns that such actions could have adverse effects on financial stability, and undermine trust in the euro as a reserve currency.

Read next: French Patriots: using Russian frozen assets in EU 'illegal, foolish'

  • United States
  • Russia
  • war in Ukraine
  • Russian assets
  • European Union

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