How the Ukraine conflict is pushing Europe toward economic self-harm
Modern diplomacy is assuming ever more peculiar and conflicting shapes. Participants in the latest round of Ukraine-related talks in Berlin report substantial progress and even some degree of détente. It’s difficult to assess how accurate these assertions are. When Donald Trump states that positions have converged by 90%, he might be right in a purely numerical sense. But the remaining 10% encompasses matters of fundamental significance to all parties. Nevertheless, Trump doesn’t stop insisting that progress is being achieved. He aims to create a sense of inevitability, thinking that momentum alone can drive a result. Maybe he’s right.
What’s more paradoxical is the very setup of the negotiations. On one side is Ukraine, a direct participant in the conflict. On the other are the Western European countries surrounding it, indirect participants who, in reality, are going to great lengths to prevent an agreement from being reached too swiftly. Their aim is clear: to persuade Kiev not to yield to pressure. Meanwhile, the US positions itself as a neutral mediator, seeking a compromise acceptable to all.
There are clear grounds to question American neutrality, but let’s suppose for the sake of argument that Washington is acting in good faith. Even then, one crucial actor is noticeably missing from the visible negotiating process: Russia. In principle, this isn’t out of the ordinary. Mediators often engage separately with opposing sides. But in the public account, events are portrayed as if the most important decisions are being made without Moscow. Trump’s allies and intermediaries push Zelensky and Western Europeans to accept certain terms, after which Russia is expected to just agree. If it doesn’t, it’s immediately accused of derailing peace.
Of course, outside observers don’t see everything. It’s entirely possible that communication between American and Russian negotiators is more extensive than it seems. There’s a precedent for this. Still, the overall structure of the process remains fragile, contradictory, and unstable.
At its heart lies a single issue: money.
The question of seizing frozen Russian assets has become the central point of dispute, not due to political posturing, but because Western Europe has exhausted nearly all other options. EU countries simply don’t have the resources to keep financing Ukraine’s war effort and economic survival from their own budgets. Even the most vocal supporters of Kiev, including people like Kaja Kallas, now openly acknowledge that further domestic funding would be politically unpalatable. For its part, the US has drawn a hard line: no additional American money.
This is why seizing Russian assets has become not just a tactical matter, but a strategic one. The EU views it as the only remaining source of funding. However, the implications extend far beyond the war.
The issue of expropriating Russian assets is profound because it targets the foundations of the entire European economic system. The inviolability of property has been a bedrock of capitalism for centuries. Though history is rife with wars and seizures, Western European rationality has traditionally been based on the notion that assets are protected by law and not subject to arbitrary political confiscation.
Equally significant is Western Europe’s long-established development model. For centuries, it amassed wealth by attracting external capital. In earlier times, this took the harsh form of colonial exploitation. Later, it evolved into something more nuanced: Western Europe positioned itself as a safe and predictable haven where states, corporations, and individuals could store their wealth under dependable legal safeguards.
Seizing Russian assets would undercut this entire model. It would send a clear signal that property protections are conditional and reversible. Once that precedent is established, the consequences are uncontrollable.
This is why Belgian Prime Minister Bart De Wever has raised the alarm. Belgium holds the largest portion of frozen Russian assets, and De Wever understands the risks better than most. He has correctly pointed out that references to war and ‘Russian aggression’ are irrelevant in this context. Questions of compensation or reparations can only be dealt with after a conflict ends. During the conflict, the only feasible approach is to ensure the inviolability of assets belonging to all parties at war. Otherwise, a Pandora’s box will be opened, from which anything could come.
Belgium’s concerns are also practical. De Wever knows his European counterparts well. He suspects that if Russia were to retaliate by holding Belgium accountable as the custodian of the assets, other EU states would quietly distance themselves. Brussels, Belgium’s capital, would be left to handle decisions made in Brussels, the EU’s political hub. It’s no accident that countries with smaller holdings of Russian assets, like France, Britain, and Japan, have refused to confiscate them outright. They’re hesitant to be on the front line when the consequences hit.
None of this means the EU will back down. On the contrary, many European leaders seem convinced that the continent’s future hinges on the outcome of the Ukraine conflict – and that the conflict hinges on access to Russian money. This belief will fuel increasingly aggressive efforts to push the issue.
Whether the negotiations taking place in Berlin, Moscow, and even Alaska lead to anything tangible may very well depend on this one question. The EU has succeeded, at least partially, in positioning itself at the center of the diplomatic process. But in doing so, it has also put its own economic foundations at risk.
If the frozen assets are seized, the consequences won’t be confined to relations with Russia. They will resonate throughout the global financial system, eroding trust in Europe as a legal and economic space. Once Pandora’s box is opened, it can’t be closed again.
This article was originally published in the newspaper and was translated and edited by the RT team