Russia’s top banker Andrei Kostin has warned the European Union that any attempt to use frozen Russian sovereign assets to finance Ukraine could spark decades of legal conflict and trigger retaliatory action from Moscow. His comments come as EU leaders debate a contentious proposal to convert €140 billion in frozen assets into a loan package for Kyiv, but have struggled to secure unanimous backing.
The plan would channel Russian central bank reserves held in Europe toward Ukraine’s defence and government spending. Belgium, which hosts major financial clearing house Euroclear, has so far withheld approval, delaying a final decision. The proposal is part of broader Western efforts to support Ukraine without increasing direct budgetary burden on member states.
Kostin, who heads Russia’s state-owned VTB Bank, said Moscow could endure the loss of the funds but argued the real threat lies in Europe using Russian financial resources to fuel continued conflict. He accused the EU of finding a “convenient” way to fund warfare with another country’s assets, adding that no justification could defend such an action.
Kostin said Russia would retaliate by seizing assets owned by European investors operating within the country. He also warned that a prolonged legal battle could last as long as 50 years, stretching well beyond any potential peace settlement. According to him, Europe, Belgium and Euroclear should expect lawsuits not only in Russian courts but also at international institutions, including a potential case at the United Nations’ judicial body.
The banker urged Moscow to adopt a more aggressive legal strategy to counter the EU’s efforts, suggesting that Western actions could set dangerous precedents in global financial governance. He argued that allowing sovereign assets to be seized or redirected could undermine the stability of state reserves worldwide.
Despite his warnings, Kostin signalled some openness to compromise under certain conditions. He suggested that Russia could agree to a negotiated settlement in which frozen assets are partially redirected toward rebuilding Ukraine, provided the arrangement formed part of a broader peace deal. An early draft of a U.S.-supported peace framework reportedly proposes allocating $100 billion to Ukraine’s reconstruction, with the remaining funds invested into a joint U.S.-Russia initiative.
Kostin described such proposals as possible if Russia is prepared to negotiate, emphasizing that concessions may be necessary to achieve a lasting settlement. He said the upcoming visit of U.S. special envoy Steve Witkoff to Moscow was significant and could help shape talks, though diplomatic progress would likely be slow.
The banker underscored the need for compromise in future negotiations, stating that sustainable progress requires movement from both sides. Although he criticized Western policies in sharp terms, he acknowledged that resolving the conflict will demand cooperation and eventually a mutually acceptable deal.
The battle over frozen assets has become one of the most complex financial and political disputes emerging from the war. It pits Europe’s desire to sustain Ukraine against Russia’s determination to protect its wealth and sovereignty, while raising fundamental questions about international law, investor confidence and post-war reconstruction.
Whether the assets are seized, negotiated, or unlocked through diplomatic settlement, the outcome will have long-term implications for financial institutions, sovereign reserves and future conflicts. For now, both sides appear entrenched — and preparing for a drawn-out struggle, in courtrooms or at the negotiating table.
