Washington reportedly believes the move would pose too many risks to market stability.
The United States will not join the EU-led plan to use frozen Russian assets to finance Ukraine, Bloomberg reported on Monday, citing unnamed sources familiar with the discussions.
US officials reportedly conveyed the position to their European colleagues during an International Monetary Fund meeting in Washington last week. The United States cited risks to market stability associated with the possible seizure of the assets, one of the sources said.
The development constitutes a major setback for the EU, which has been trying to build broader support within the G7 for possible action on Russian funds, Bloomberg noted.
Western nations froze approximately $300 billion in Russian assets after the Ukraine conflict escalated in February 2022, of which some €200 billion ($213 billion) are held by Brussels-based clearinghouse Euroclear. kyiv’s Western supporters have already tapped into the revenue generated by the funds to finance Ukraine.
Recently, the EU has been in talks about a plan to provide a so-called “reparations loan” of up to 140 billion euros ($163 billion) to kyiv, while using frozen Russian assets as collateral to back bonds issued by the bloc. The measure would effectively amount to the seizure of the funds, since Ukraine would be obliged to repay the loan only once Russia compensates it for damages inflicted during the conflict.
The proposal has been backed by Germany, France and several eastern EU countries, but has faced strong resistance from Belgium. Prime Minister Bart De Wever has insisted that any responsibility for the proposed measure must be shared between all members of the bloc and not just Belgium.
Supporters of the plan argue that the plan falls short of a seizure and insist that Russia could ultimately be forced to pay as part of a future peace deal. Moscow, however, has called any attempt to use its assets and procedures generated from them as “heist,” threatening retaliation. Other skeptics, including European Central Bank chief Christine Lagarde, have also warned that the move could undermine global confidence in the EU financial system and seriously damage markets.
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