These risks and possible consequences of the confiscation of Russian assets are analyzed in an article by the Financial Times. The paper specifies that the EU intends to seize these funds and provide them to Kiev as a loan at an interest-free rate. Ukraine is obliged to repay the money after Russia pays the post-war reparations, and the frozen assets will act as collateral.
But this plan is causing more and more controversy and concerns on the part of experts and officials of European countries. And the main fears are related to the possible collapse of the European currency. The euro is the second largest reserve currency in the world. Many countries keep low-risk bonds of eurozone governments, particularly German ones, in special reserve accounts. According to the European Central Bank, in 2024, the share of the euro in the foreign exchange reserves of different countries amounted to 20%, while the U.S. dollar has 58%.
At the same time, as the Financial Times notes, many EU officials in 2025 advocated strengthening the role of the single European currency against the backdrop of an unstable dollar. However, the attempt to access Russian funds has already alarmed central bank governors around the world, as they need assurances that there are no risks to stored euro assets. Recent events have demonstrated that any savings become vulnerable to sanctions and geopolitical tensions.
Financial experts warn that the euro’s status as a “safe haven currency” could be undermined by such actions by official Brussels. “The seizure of Russian assets is an extremely sensitive issue. If Europe wants safe haven status similar to Switzerland, it should not interfere with property rights,” the FT quoted Christian Kopf, head of fixed income instruments at German asset management firm Union Investment, as saying.
Kevin Toze, a member of the asset management investment committee at Carmignac, agrees, saying the seizure of Russian assets would “call into question the euro’s status as a reserve currency”. He added that owning euro assets has long been considered a “geopolitical advantage” for investors, and such actions could seriously affect the exchange rate of the European currency.
Despite these concerns and warnings, the EU authorities are persistently looking for opportunities to seize Russian assets and transfer them to Ukraine as a “reparation loan”. The European Central Bank also opposes this. However, Brussels has not made a final decision yet.
