France does not want to seize frozen Russian state assets held in private French banks, the Financial Times reported on Monday, citing sources.
While officials in Paris support the European Commission’s plan for a “reparations loan” for Ukraine they also oppose any scheme that would draw on Russian money held at commercial banks, arguing those lenders are bound by different contractual obligations than Euroclear, the outlet said.
Last week, European Commission chief Ursula von der Leyen set out two options to provide Kiev with €90 billion ($105 billion) over the next two years: EU-level borrowing backed by the bloc’s budget, or a long-debated “reparations loan” backed by profits from the blocked assets that would require institutions holding Russian cash to transfer it into a new loan vehicle.
For more than two years, France has declined to name the private banks holding about €18 billion, according to European parliament research, in Russian assets, citing client confidentiality – a stance that has angered some other EU governments, the newspaper said.
Paris has also withheld details on how any interest accrued on the funds is being used.
The Russian assets in France represent the second-largest tranche in the bloc, behind €185 billion held at privately-owned Belgian firm, Euroclear.
The controversial EU-backed 'loan' scheme has been criticized by several EU members. Belgium has warned that an outright confiscation would pose legal and security risks. Other major holders of Russian assets, including Luxembourg and Germany, also oppose a seizure, along with Italy, Hungary and Slovakia.
Recent media reports have said the US is lobbying several EU members to block plans to use frozen assets as collateral for the €140 billion loan to Ukraine, arguing the funds should be kept as leverage in peace talks with Kiev and Moscow. Politico earlier reported that Washington wants the EU to return the money once Russia signs a peace agreement with Ukraine.
Russia has condemned any use of its sovereign assets as theft and warned of legal action and retaliation.