EU decision and market reaction

Rating agency Fitch placed the long‑term ratings of Euroclear Bank and Euroclear Holding on Rating Watch Negative (RWN) after the European Commission proposed using frozen assets of the Russian central bank to provide a reparations loan to Ukraine. The move reflects uncertainty about the design of the mechanism and its impact on the depository where a large portion of those assets is held.

The European Commission’s plan creates a potential risk for Euroclear of a liquidity squeeze and legal claims from Russia.

— Fitch Ratings

What risks Fitch sees

The agency highlights several sources of risk: possible legal claims from the Russian Federation, operational and liquidity consequences for the depository, and uncertainty over legal implementation at the EU member‑state level. At the same time, in its base case Fitch assumes that Euroclear could receive comprehensive guarantees, which would allow it to maintain its current 'AA' rating.

Why this matters for Ukraine

On one hand, a mechanism based on frozen assets is a potential source of substantial funds for reconstruction and reparations. On the other hand, actual receipts depend on legal formalities, EU political unity, and the absence of legal risks that could freeze or delay payments. For Ukraine this is an opportunity, but not an instant solution to its financing needs.

In other words, the format of implementation will determine the speed, size and security of disbursements — of interest to every taxpayer and every community in need of reconstruction.

Steps and timeframe

Fitch expects more clarity on the mechanism’s format; the RWN will be removed once the relevant details are provided. Even if a political agreement emerges at the European Council meeting on 18–19 December, it will have to be implemented at EU and national law levels. Meanwhile, Russia has already stated its intention to claim nearly €200 billion from Euroclear, which complicates any quick and simple solutions.

Securities market experts emphasize: without clear guarantees and a legal mechanism, risks to the European financial infrastructure may outweigh the ethical and political benefits of reparations.

Legal and political clarity is needed so that the mechanism functions as a source of support for Ukraine, not as a catalyst for systemic risks.

— securities market experts

Conclusion

The Fitch signal is not a death knell for the initiative, but a reminder: a reparations loan could become a significant resource for Ukraine provided the EU ensures transparent legal arrangements and reliable financial guarantees. For now the question is not only whether reparations will be made, but how to make them safe for the European financial system and effective for our country.