France Says Seizing Frozen Russian Assets Risky, Needs EU ‘Framework’

France on Tuesday said it did not rule out the EU seizing frozen Russian funds to help Ukraine but warned that such a move could risk Europe’s financial stability.

“Using the assets themselves can only be considered within the framework of the European Union,” French Prime Minister Francois Bayrou told lawmakers in Paris.

But Bayrou’s finance minister reiterated France’s view that such a move would be contrary to international agreements.

“Whatever one thinks of Russia’s action in Ukraine... it is not in international traditions to seize the assets of central banks,” the minister, Eric Lombard, said in Brussels.

“Under European law, there is no reason to seize” Russian assets and “if there were a seizure without legal grounds, it could pose a risk to European financial stability,” Lombard warned.

France has been one of the strongest opponents in Europe to the idea of seizing billions of euros’ worth of Russian assets swiftly frozen after Moscow launched its all-out 2022 invasion of Ukraine.

Yet tapping those assets could help plug a massive gap in defense budgets as Europe rushes to assume a greater role in defending Ukraine against Russia’s invasion and as US support for Kyiv wavers under Donald Trump.

There are over 200 billion euros ($218 billion) of Russian Central Bank assets frozen in the bloc – some two-thirds of the total held worldwide. 

Russia is expected to push for the lifting of EU sanctions and the return of that money as part of any deal on Ukraine.

European Union countries are already using income earned from frozen Russian assets to help arm Ukraine and finance its post-war reconstruction, a windfall worth between €2.5 billion and €3 billion a year. 

EU chief Ursula von der Leyen opened the door last month to go further.

“We can continue to put our minds to work on the most creative use of these assets to support Ukraine’s fight for freedom,” she said.

EU lawmakers have called on Brussels to take action. 

Von der Leyen should “confiscate the €200 billion in frozen Russian state assets to rebuild and arm Ukraine,” the European Parliament’s socialists group head, Iratxe Garcia Perez, said Tuesday.

French MPs are on Wednesday set to examine a resolution urging the European Union to use the frozen Russian assets “to support the Ukrainian resistance and reconstruction of Ukraine.”

An amendment proposed by several deputies including former French prime minister Gabriel Attal suggests goes even further, by saying Russia’s frozen assets should go to “strengthen Europe’s defense capabilities.”

Since Russia’s full-scale invasion of Ukraine in February 2022, the EU and G7 have frozen some €300 billion of assets of the Russian Central Bank, according to the EU, as well as private assets of individuals such as yachts and real estate.