France has adopted a tough stance, blocking the implementation of a pan-European plan to use frozen Russian assets to fund Ukraine. The assets in question amount to €18 billion held in French financial institutions. This is according to the authoritative publication, the Financial Times (FT).
Although Paris formally supports the idea of providing Ukraine with a large-scale reparations loan, French officials are categorically opposed to using the blocked funds of the Russian Central Bank for this purpose.
The official reason given for this position is the contractual obligations French banks allegedly have toward their clients, including Russian ones. "We cannot ignore the legal and contractual obligations of our financial institutions," the FT quotes an anonymous source in French government circles as saying. "This is a matter of financial stability and trust in our banking system."
This argument is met with skepticism in Brussels and other European capitals because the lion's share of Russia's frozen assets—over €190 billion—is held in the Belgian depository Euroclear, which, unlike commercial banks, does not have such direct obligations to Moscow.
The situation is further complicated by the lack of transparency from the French authorities. According to the FT, Paris refuses to disclose details on which institutions are holding the Russian assets and is also withholding information about the profits generated from these funds. This secrecy is causing increasing irritation among its EU partners.
"This lack of transparency undermines the unity of the European Union on a critically important issue," an anonymous European diplomat stated. "While Ukraine needs every euro for defense and recovery, such actions look like sabotage of our joint efforts."
