Belgium-based Euroclear, a major EU clearing house, has revealed that it earned nearly $2 billion in profit from frozen Russian assets in the first half of 2023. In its financial results for the first six months of the year, Euroclear reported a significant growth in operating income, driven in part by higher interest earnings resulting from international sanctions on Russia.
Euroclear disclosed that Russian assets generated more than €1.7 billion ($1.9 billion) in interest between January and June. The company currently holds €196.6 billion (approximately $220 billion) worth of Russian assets, with the majority owned by the country’s central bank. Overall, the EU has frozen €207 billion (over $231 billion) of Russian assets and reserves since the start of Moscow’s military operation in Ukraine.
Despite numerous calls from EU leaders to utilize the frozen funds to rebuild Ukraine, no decision has been reached yet due to the complex nature of the issue and concerns over potential repercussions on the euro and reserve holders. This lack of action has caused a rift within the EU regarding how to handle the profits generated from the frozen Russian assets.
Moscow has strongly criticized Western attempts to transfer the seized assets to Ukraine, referring to it as “barbarism” and “theft” that violates international law. The Kremlin has issued warnings that Russia will respond accordingly if necessary.
The accumulation of such substantial profits by Euroclear has sparked debate and controversy. Some argue that these profits should be directed towards supporting Ukraine’s recovery, given the EU’s intention to freeze the assets to pressure Russia. However, others express concerns that using these funds may undermine the stability of the euro and prompt reserve holders to reconsider their positions.
The current impasse highlights the intricate challenges associated with managing frozen assets and their implications on international relations and financial stability. As the situation unfolds, Euroclear’s earnings from Russian assets will likely continue to be a point of contention within the EU.
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