Brussels’ plan to use frozen Russian sovereign assets to secure up to €210bn in loans for Ukraine is challenging the EU’s political and legal frameworks, raising concerns among investors about the euro’s status as a safe haven. The European Commission proposes a “reparations loan” to Ukraine, using these assets as collateral, but faces skepticism from states like Belgium and the ECB regarding legality and potential risks. Investors warn that this move could undermine the euro’s appeal, likening it to the reappraisal faced by the US dollar due to sanctions. ECB President Lagarde cautions that the plan might stretch international law, potentially harming Europe’s global reputation.
