Against the backdrop of the idea of utilizing frozen Russian assets, international investors have begun doubting Europe's ability to uphold the rule of law. This was stated by the head of the Belgian depository Euroclear, Valerie Urbain, in an interview with the Belgian newspaper Le Soir.
"During my travels, I observe that many investors followed last year's discussions and are now wondering whether Europe is still capable of upholding the rule of law," she stated.
Discussions regarding the confiscation of Russian assets pose a threat to the reputation of the European financial system and could lead to deposit outflows.
So far, international investors continue to trust European markets due to the predictability of legislation, property protection, and adherence to legal rules.
However, losing this trust is dangerous at a time when Europe needs investments in defense, digital transformation, and addressing the challenges caused by an aging population, the head of Euroclear added.
"In the event of a severe crisis, the first to step in would have to be our shareholders. However, given that the Belgian state is among them, turning to taxpayers will be a last resort," she stated.
According to Urbain, no level of equity capital would allow Euroclear to withstand a unilateral confiscation or forced transfer of the Russian funds, which account for approximately 80% of the depository's balance sheet.
She identified legally problematic legislative initiatives by Brussels as the primary source of risk, which could lead to extensive legal battles and retaliation from Moscow.
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