Europe faces a decision that goes far beyond an accounting discussion and that defines its strategic credibility: what to do with the more than 210,000 million of euros of Russian assets frozen since the beginning of the invasion of Ukraine. The problem is twofold, because it is not just about figures, but about what comes after activating the operation.
The European crossroads. Yes, because the question is not only whether that money should be used to support kyiv at a critical moment, but whether the European Union is capable to take the risks political, legal and economic implications of doing so.
As Washington presses for a quick exit to the conflict and reduces its financial support, Brussels finds itself caught between the urgency of avoiding a Ukrainian defeat and the fear of unleashing a russian retaliation that directly hits several of its Member States.
Putin clearly. Statements this week by Vladimir Putinloaded with contempt for European elites and confidence in a protracted war, are not simple rhetoric. Moscow makes it clear that it is not contemplating real concessions and that it considers the use of its frozen assets as theft that demands a response.
That response would not be symbolic, but surgical: selective seizures, accelerated nationalizations, endless litigation and the use of the Russian financial system as a weapon. The message, a priori, is unequivocal: if Europe crosses the line, Russia will not only punish Ukraine on the battlefield, but also European countries that still have exposed economic interests within their territory.
The real blockage. I remembered this morning the financial times he crux of the whole situation. Although the debate is presented as a struggle between hawks and cautions, the real blockage comes from a handful of countries specific, with Belgium, Italy and Austria at the head. It is not a question of ideology, but of direct vulnerability.
Belgium hosts Euroclear, the warehouse that guards most of the frozen Russian assets, and fears becoming the first target of retaliation judicial and economic. Italy and Austria, for their part, maintain banks and companies with billions trapped in Russia, benefits included, which they cannot repatriate. For these countries, authorizing the use of Russian money is not an abstract foreign policy decision, but rather an immediate risk to their financial and corporate systems.
Type C accounts: the ace of Moscow. At the center of this fear are the calls type C accountsthe mechanism created by Moscow to withhold dividends, interest and assets from Western companies. That money, formally owned by European and American companies, is under Russian control and can be frozen, redistributed or directly transferred to the state budget with a simple decree.
For the Kremlin, these accounts are a retaliation tool fast and effective, far superior in agility to slow Western judicial processes. For Europe, they are an invisible chain that binds entire governments when making strategic decisions, because any false step can translate into lost billions and internal political crises.
Germany pushes, Europe hesitates. Germany has become the main political engine of the plan to use Russian assets, convinced that without that money there is no realistic way to support Ukraine for another two years without skyrocketing the European debt or depending on impossible unanimity.
Berlin insists that the risk must be shared among everyone and that failure to act would send a devastating sign: Europe is not capable of defending its own security. However, this logic collides with the reality of countries that feel that the risk is not distributed, but rather concentrated in their national balance sheetsits banks and its courts.
A (bad) peace as a threat. This financial blockade occurs in an even more disturbing context: European fear to an imposed peace on terms favorable to Russia. For many capitals, an agreement that consolidates Moscow’s territorial gains would not only leave Ukraine defenseless, but would force Europe to prepare for a scenario direct confrontation in the medium term, with longer borders, a strengthened Russian army and a weakened European deterrent.
In this framework, the frozen Russian money stops being a tactical lever and becomes a strategic investment: either it is used now to support Ukraine, or it is paid for later in the form of massive rearmament and risk of war.
The final dilemma. In short, the European Union has frozen Russian assets to prevent them from returning to Moscow without reparations, but now it must decide whether it dares to give the next step. Without that money, Ukraine could run out of liquidity in a matter of months, losing all negotiating power and forcing a deal from weakness.
With him, Europe is exposed to reprisals, litigation and immediate economic losses, concentrated in a few countries that are currently holding back the decision. The crossroads are clear: assume the political and financial cost now, or accept that the fear of type C accounts determine European security policy. Not only the future of Ukraine is at stake in that election, but also Europe’s ability to act as a coherent geopolitical actor when your own interests are at risk.
Image | RawPixel
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