European Central Bank President Christine Lagarde put to rest the debate yesterday, confirming that her institution will not provide any guarantees or support for lending mechanisms directed at Ukraine if they would lead to violations of European Union legislation or undermine the principle of the rule of law.
During a press conference following the European Central Bank’s Governing Council meeting, Lagarde stated, “The Eurozone prides itself on respecting the rule of law,” emphasizing that any financial mechanism must fit strictly within the legal framework of the European Union.
The European official expressed confidence in the existence of “legal solutions and formulas that can be studied and analyzed,” but she made it clear that the European Central Bank “should not encourage or support any mechanism” that might compel it to violate Article 123 of the Treaty on the Functioning of the European Union, which prohibits direct monetary financing for public spending, including any direct financing for Ukraine.
Lagarde concluded her remarks by asserting that the European Central Bank cannot endorse or guarantee any mechanism based on “monetary financing,” considering this position to be “clear and unequivocal.”
These remarks arise amid ongoing European debates regarding ways to finance Ukraine, particularly following Hungarian Prime Minister Viktor Orbán’s announcement on Wednesday that the European Commission had removed the item concerning the confiscation of frozen Russian assets from the agenda of the European Council summit scheduled for December 18 and 19.
Orbán explained that an alternative proposal involves providing Ukraine with a joint loan from EU member states, reiterating his country’s opposition to this approach, before European Commission President Ursula von der Leyen confirmed that the option of confiscating Russian assets is still on the table for discussion.
The European Commission is seeking approval from member states to seize frozen Russian assets and use them as a financing mechanism to compensate Ukraine in 2026 and 2027, but this proposal faces increasing reservations within the union.
Seven European countries—Belgium, Hungary, Slovakia, Italy, Bulgaria, Malta, and the Czech Republic—have expressed concerns about the long-term legal and financial repercussions of such an unprecedented action.
Conversely, Russian President Vladimir Putin described any potential seizure of Russian assets in Europe as “theft,” while Russian Justice Minister Konstantin Chuichenko announced that Moscow has already prepared options for retaliation should Western countries proceed with this step.
