For nearly three years, Europe has held one of the most powerful economic weapons ever assembled against an aggressor state: more than €200 bn in frozen Russian central bank reserves. Yet despite the magnitude of this opportunity – and the moral clarity offered by Russia’s war of aggression against Ukraine – the European Union has hesitated to act.
Now, that hesitation threatens to undo everything.
Unless European leaders move swiftly, the frozen Russian assets could soon be returned to Moscow – strengthening Vladimir Putin’s regime, crippling Ukraine’s future, and eroding Europe’s own standing as a defender of international law and democratic values.
The danger lies not only in external threats, but in the EU’s own internal dynamics. Under current rules, the sanctions immobilising Russian state assets must be renewed by unanimous agreement every six months. Hungary has already signaled it will veto further extensions; Slovakia may join. The next critical sanctions vote arrives 31 July 2025 – and a single veto could collapse the entire framework.
The consequences would be disastrous. The €183 bn held at Euroclear in Belgium – the lion’s share of Russia’s frozen reserves – would become immediately accessible to the Kremlin. Putin would gain a financial lifeline at a crucial moment, while Ukraine’s hopes for reconstruction would dim. European taxpayers would be forced to pick up the staggering cost of rebuilding Ukraine – currently estimated at over half a trillion dollars.
But the damage would not end there. Returning the funds would broadcast to the world that Europe’s commitment to accountability is conditional, that its principles can be undermined by political whim. It would embolden other authoritarian regimes to believe that territorial conquest and war crimes can be met with little more than temporary inconvenience.
In short: it would be a geopolitical disaster.
Some policymakers argue that transferring the frozen assets is unlawful, or that doing so would damage Europe’s financial reputation and the standing of the euro. Neither claim survives serious examination.
The Legal Foundation: Countermeasures and Accountability
International law does not forbid the use of Russia’s assets to support Ukraine’s reconstruction. On the contrary, it allows it.
Under the doctrine of countermeasures, states may take otherwise unlawful actions in response to a serious breach of international law, provided those actions are proportionate, reversible, and aimed at inducing compliance. Russia’s invasion of Ukraine – a blatant violation of the United Nations Charter and multiple international treaties – qualifies as precisely such a breach.
Leading legal scholars, including prominent former judges of international courts, have affirmed that transferring Russian sovereign assets to Ukraine would constitute a lawful countermeasure. It would be a proportional response, narrowly targeted to the responsible state, designed to reinforce international law – not undermine it.
Moreover, unlike private property, sovereign assets belonging to a state engaged in unlawful aggression do not enjoy absolute immunity when countermeasures are at stake. International law recognizes that when a state commits an egregious wrong, remedies must be available to the victims.
In short: Europe would not be breaking the rules by transferring the assets. It would be enforcing them.
The Economic Reality: Strength Through Action
Critics have also warned that using the assets could damage confidence in the euro or Europe’s financial system. But these concerns, while superficially plausible, are ultimately misplaced.
Financial stability depends on predictability, transparency, and the rule of law. Carefully structured action, grounded in legal principles and transparent governance – such as transferring the frozen assets into a trust fund dedicated to Ukraine’s reconstruction – would bolster Europe’s financial credibility, not weaken it.
What truly risks damaging the euro and Europe’s financial system is political instability, inconsistency, and the spectacle of capitulation. Investors would be far more unnerved by a Europe that freezes hundreds of billions in assets only to quietly return them to an aggressor under political pressure. Strength, not hesitation, underpins the credibility of a currency and a financial system.
More Than Money: Europe’s Moral Moment
Ultimately, the debate over the Russian assets is not simply about legality or economics. It is about Europe’s identity – and its future.
If the EU fails to act, it will signal to the world that might still makes right. That aggression can succeed if the perpetrator is powerful enough. That Europe, despite its rhetoric, lacks the will to defend its own values when challenged.
But if the EU moves boldly – transferring the frozen assets into a trust fund for Ukraine – it would send a different message: that international law matters, that aggression has real costs, and that democracies will stand together to defend the foundations of a just and stable world order.
This is not just Ukraine’s fight. It is Europe’s as well.
The window for action is closing fast. Delay is no longer a neutral act. Waiting risks catastrophe – for Ukraine, for European taxpayers, and for the credibility of the EU itself.
The choice is clear: act now, or lose far more than frozen assets. Lose, perhaps, the very principles upon which Europe’s future depends.
History rarely offers second chances. Europe must seize this one before it slips away.
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