France is facing growing pressure from European partners after refusing to open up about some €18 billion in frozen Russian central bank assets held at its commercial banks, or to allow those funds to be used in the European Union’s proposed “reparations loan” for Ukraine.
The position has emerged as a central fault line in talks on how to mobilise Russia’s immobilised reserves for Kyiv’s long-term financing.
According to the Financial Times, France has declined to disclose which banks are holding the Russian sovereign assets or how the interest generated on them is treated, arguing that client confidentiality rules apply. The assets are understood to be concentrated in large lenders, with BNP Paribas believed by several sources to be the main custodian, alongside Crédit Agricole and Société Générale, though none of the institutions has commented publicly.
The French-held funds form the second-largest pool of frozen Russian central bank assets in the EU, after the roughly €185 billion immobilised at Euroclear, the Brussels-based central securities depository. Belgium is also estimated to host a further €7 billion of Russian sovereign assets in its own commercial banks. The remaining sovereign holdings elsewhere in the bloc are relatively limited, while the precise location of most private-sector custodians has not been disclosed.
The European Commission has put forward a plan for an EU-backed “reparations loan” for Ukraine, to be financed by revenues generated on frozen Russian sovereign assets. Under the latest proposals, around €90 billion would be raised for the period 2026–27, covering roughly two-thirds of Ukraine’s estimated external financing needs, with international partners expected to supply the remainder. The scheme would sit alongside the G7’s earlier $50 billion facility backed by interest income on immobilised Russian reserves.
So far, Euroclear has been the main operational pillar of this approach. Almost all Russian securities held there have now matured and been converted into cash, generating several billion euros a year in interest income. Belgium has already earmarked tax revenues from those profits for Ukraine, while EU legislation channels a large share of the underlying earnings to support Kyiv and to secure future borrowing.
Commercial banks, however, occupy a different legal position from a central securities depository. In many cases they are contractually obliged to pay interest on central bank deposits or reserves, including those held by the Bank of Russia prior to sanctions. European Commission officials have underlined that depositories like Euroclear do not owe such interest, which makes it easier to ring-fence and redirect the income. By contrast, using funds held at commercial lenders raises questions over banks’ liabilities to Russia if the war ends or sanctions are eased.
To address these concerns, the Commission’s blueprint includes an explicit guarantee that the EU would cover any interest payments which financial institutions remain contractually bound to pay to the Russian central bank. The intention is to shield private balance sheets while still allowing the bloc to mobilise the financial value of the frozen reserves for Ukraine. France, though supportive of the reparations-loan concept in principle, has opposed extending the mechanism to commercial-bank assets on its territory, despite such assurances.
Belgium, facing the greatest exposure through Euroclear, has argued that assets in France and other member states must be included to avoid concentrating legal and financial risks in a single jurisdiction. Brussels has warned that an unbalanced regime could leave Belgium, its financial sector, and Euroclear particularly vulnerable to litigation or Russian counter-measures. Euroclear itself has cautioned that an ill-designed scheme could unsettle investors and even threaten its stability.
The French stance has frustrated some partners who see transparency over the €18 billion pool as a precondition for a genuinely EU-wide solution. Commentators point out that operations between central banks and commercial institutions are among the least transparent parts of the global financial system, and that many authorities and banks are reluctant to publish details of where reserves are invested.
The debate over France’s position comes as wider pressure builds within the EU to move ahead on frozen Russian assets. Leaders from several member states have urged rapid progress on the reparations-loan model, while the European Parliament and expert groups in Brussels argue that using the profits from immobilised reserves is legally defensible if outright confiscation remains off the table. At the same time, member states such as Belgium continue to demand strong guarantees and risk-sharing before signing off on any final deal.
Germany’s Chancellor, Friedrich Merz, has called on EU governments to provide collective guarantees to Belgium and to share the risks associated with any future confiscation or litigation linked to Russian state assets. His intervention reflects a broader effort, led by Berlin and the European Commission, to break the current deadlock by coupling legal safeguards with a clear political commitment to long-term Ukraine support. Whether France ultimately accepts a wider role for its commercial banks’ frozen assets will be a key factor in determining the shape of any eventual EU agreement.
