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| Most of the seized Russian assets are in Belgium. (Source: Loop News) |
Mr. Fabio Panetta said that "weaponizing" the Euro risks damaging the attractiveness of the common currency and promoting rival currencies.
"Russia's military operation in Ukraine is a 'clear reminder' of the strategic benefits for Europe of having a common currency like the Euro. This power must be used wisely," the governor of the Bank of Italy stressed.
According to him, the increased use of the yuan to pay for trade between China and Russia is proof of this.
Beijing has been promoting the use of local currencies in countries hit by international sanctions, making it harder for them to pay for goods in dollars or euros.
The share of China's trade financed in yuan has doubled over the past three years, helping the currency overtake the euro to become the world's second-most used currency for trade payments.
Mr Panetta did not specifically mention the EU’s plans to transfer profits from Moscow’s frozen assets to Ukraine, but officials said his comments were taking those plans into account.
Italy has frozen a relatively small amount of Russian central bank funds. The bulk of Moscow’s assets are stuck in Belgium, where the Euroclear Central Depository holds about 191 billion euros.
The EU is planning to seize the extraordinary profits that Euroclear made from fixed assets and hand them over to Ukraine. However, member states are expected to soon adopt new regulations that would force the EU to seize these profits, but not actually hand them over to Kiev.
The US, which currently holds about $5 billion in Russian assets, has pushed other G7 members to go one step further and seize Russian assets themselves.
But Italy is among a number of EU member states, including Germany and France, that have expressed skepticism about such a move and warned of the implications of seizing assets belonging to a sovereign state, which under international law has immunity.
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