Europe Makes the Russian Asset Freeze Permanent
Why Europe decided restraint no longer worked
Europe Crosses a Line It Tried Not To
After Russia launched its invasion of Ukraine, the European Union froze $247 billion in Russian central bank assets deposited in European financial institutions. European leaders were careful about how they described the move. The money was immobilized, not seized, and ownership had not changed. This was a temporary, emergency response.
This allowed Europe to punish Russia while preserving the legal norms that underpin global finance. That has now collapsed. By agreeing to indefinitely freeze those assets and use the income they generate to support Ukraine, the European Union has acknowledged what was already true in practice. The freeze is no longer a holding action. It is enforcement.
Europe resisted this step longer than other sanctions because it understood what was at stake. This was not escalation for its own sake, but an acknowledgment that the old financial order was no longer doing its job. As discussions over Ukraine increasingly center on Washington and Moscow, Russian assets are now negotiating leverage.
Preserving Financial Order
For decades, sovereign reserves were treated as untouchable. Think of it as a gentleman’s agreement among states. You don’t touch my central bank assets, and I don’t touch yours. Everyone benefits from knowing that money parked abroad is protected from political retaliation. This was practical self-interest, not naïve idealism.
Stable property law and financial neutrality make global trade and investment possible. Europe, with its financial power, had more to lose than most if finance became openly political. If major actors accepted the bargain, the system held. Financial and territorial sovereignty are closely linked. If borders were respected, money could be too, but Russia stopped respecting borders.
Cities were leveled, treaties were ignored, and rules became tests. At that point, norms stopped constraining the aggressor and appeared to provoke further pressure. Each effort by Europe to preserve legality and restraint looked less like principle and more like hesitation protecting the wrong side. What once seemed responsible started to look like weakness.
The Role Europe Avoided
There is a scene early in the film American Sniper where Chris Kyle’s father explains the world in blunt terms. There are sheep who want to live in peace, wolves who prey on them, and sheepdogs who step in when rules no longer work. The metaphor is crude, but it endures because it describes roles rather than intentions. The sheepdog is not virtuous because it uses force, but necessary. Someone must stop the wolf when the rules fail.
For decades, Europe avoided that role. It preferred to be a neutral space where law insulated economics from raw power. That posture only works when everyone agrees to play by the same rules. Once that agreement collapsed, Europe faced a choice: keep refereeing while one side ignored the whistle, or accept a role it had long resisted. Reluctantly, it has chosen the latter.
We often treat international norms like absolutes, but they function more like agreements. They bind because everyone involved accepts them and expects reciprocity. That ends when one party walks away and unilateral restraint loses its meaning. Most political agreements work this way. When they are broken, order is renegotiated through conflict and leverage before being restored through law.
That process is uncomfortable, but it is how systems survive. Applied to sovereign assets, the logic is straightforward. If you do not want your property protected, destroy the property and sovereignty of others. If you want protection, you must respect it yourself.
Accepting Risk Is the Only Option
As financial systems become openly political, states outside the West begin reassessing where they hold reserves and under what conditions they feel safe doing so. As claims of neutrality weaken, so does trust and predictability. These are not abstract costs, and European policymakers are not blind to them. In fact, Europe’s delay shows a strong understanding of the risks.
But the alternatives carry their own risk. Returning the assets would signal that enough violence can erase consequences. Leaving them untouched would deprive Ukraine of funding. Outright seizure would completely tear through legal norms. Indefinite freezing sits in an uncomfortable middle but it solves three problems: it avoids rewarding Russia, provides backing for loans for Ukraine, and gives Europe negotiating leverage.
As the United States and Russia maneuver over Ukraine’s future, that leverage matters. Now, the status of Russian central bank assets cannot be resolved without European consent, which will at least earn them a seat at the table. The gloves are coming off not because Europe abandoned its principles, but because clinging to them unilaterally would have put them at a major disadvantage.
There is a sequence to restoring order. Stabilization comes first. Repair comes later. Norms cannot be rebuilt while the actor that broke them remains unconstrained. This does not mean the current arrangement is permanent, just that it’s necessary now. Unilateral restraint no longer works in a system where restraint is treated as weakness. Survival and defense come first, and restoration follows.