How the Ukraine conflict is pushing Europe toward economic self-harm
Modern diplomacy is increasingly taking on strange and contradictory forms. Participants in the latest round of Ukraine-related talks in Berlin report significant progress and even a degree of rapprochement. How accurate these claims are is hard to judge. When Donald Trump says the positions have converged by 90%, he may be correct in a purely numerical sense. But the remaining 10% includes issues of fundamental importance to all sides. This, however, does not stop Trump from insisting that progress is being made. He needs to create a sense of inevitability, believing momentum itself can force an outcome. Perhaps he is right.
What is more paradoxical is the configuration of the negotiations themselves. On one side sits Ukraine, a direct participant in the conflict. On the other are the Western European countries surrounding it. Indirect participants who, in practice, are doing everything possible to prevent an agreement from being reached too quickly. Their goal is clear: To persuade Kiev not to give in to pressure. Meanwhile, the US presents itself as a neutral mediator, seeking a compromise acceptable to everyone.
There are obvious reasons to doubt American neutrality, but let us assume for the sake of argument that Washington is acting in good faith. Even then, one crucial actor is conspicuously absent from the visible negotiating process: Russia. In principle, this is not unusual. Mediators often work separately with opposing sides. But in the public narrative, events are presented as if the most important decisions are being made without Moscow. Trump’s allies and intermediaries pressure Zelensky and the Western Europeans to accept certain terms, after which Russia is expected to simply agree. If it does not, it is immediately accused of sabotaging peace.
Of course, outside observers do not see everything. It is entirely possible that communication between American and Russian negotiators is more extensive than it appears. There is precedent for this. Still, the overall structure of the process remains fragile, contradictory, and unstable.
The question of confiscating frozen Russian assets has become the central point of contention, not because of political rhetoric, but because Western Europe has exhausted almost every other option. The EU countries simply do not have the resources to continue financing Ukraine’s war effort and economic survival from their own budgets. Even the most outspoken supporters of Kiev, including figures such as Kaja Kallas, now openly admit that further domestic funding would be politically toxic. The US, for its part, has drawn a firm line: No additional American money.
This is why the seizure of Russian assets has become not merely a tactical issue, but a strategic one. The EU sees it as the only remaining source of funding. Yet the implications go far beyond the war itself.
The issue of expropriating Russian assets is momentous because it strikes at the foundations of the entire European economic system. The inviolability of property has been a cornerstone of capitalism for centuries. While history is full of wars and seizures, Western European rationality has traditionally rested on the idea that assets are protected by law, not subject to arbitrary political confiscation.
Equally important is Western Europe’s long-standing development model. For centuries, it accumulated wealth by attracting external capital. In earlier eras, this took the brutal form of colonial extraction. Later, it evolved into something more subtle: Western Europe positioned itself as a safe and predictable haven where states, corporations, and individuals could store their wealth under reliable legal guarantees.
Seizing Russian assets would undermine this entire model. It would send a clear signal that property protections are conditional and reversible. Once that precedent is set, the consequences are impossible to contain.
This is why Belgian Prime Minister Bart De Wever has sounded the alarm. Belgium holds the largest share of frozen Russian assets, and De Wever understands the risks better than most. He has rightly noted that references to war and ‘Russian aggression’ are irrelevant in this context. Questions of compensation or reparations can only be addressed after a conflict ends. During the conflict itself, the only viable approach is to ensure the inviolability of assets belonging to all warring parties. Otherwise, a Pandora’s box will be opened, from which anything could emerge.
Belgium’s concerns are also practical. De Wever knows his European partners well. He suspects that if Russia were to retaliate by holding Belgium responsible as the custodian of the assets, other EU states would quietly distance themselves. Brussels, the capital of Belgium, would be left to deal with decisions made in Brussels, the political center of the EU. It is no coincidence that countries with smaller holdings of Russian assets, such as France, Britain, and Japan, have refused to confiscate them outright. They are reluctant to be first in line when the consequences arrive.
None of this means that the EU will back down. On the contrary, many European leaders appear convinced that the continent’s fate depends on the outcome of the Ukraine conflict – and that the conflict depends on access to Russian money. This belief will drive increasingly aggressive attempts to force the issue.
Whether the negotiations unfolding in Berlin, Moscow, and even Alaska lead to anything concrete may well hinge on this single question. The EU has succeeded, at least partially, in placing itself at the center of the diplomatic process. But by doing so, it has also placed its own economic foundations at risk.
If the frozen assets are seized, the consequences will not be limited to relations with Russia. They will reverberate across the global financial system, undermining trust in Europe as a legal and economic space. Pandora’s box, once opened, cannot be closed again.
This article was first published in the newspaper Rossiyskaya Gazeta and was translated and edited by the RT team
