Core Viewpoint - European Central Bank President Christine Lagarde has expressed concerns over the EU's plan to use frozen Russian assets to provide a €140 billion loan to Ukraine, warning that it may violate international law and damage the credibility of the euro [1][10][17]. Group 1: EU's Loan Plan - The EU plans to use approximately €300 billion of frozen Russian state assets, with about €200 billion held by the European Clearing Bank, as collateral for a €140 billion loan to Ukraine [4]. - The strategy involves investing the frozen funds into EU-supported bonds, using the generated interest and returns as "compensation" for Ukraine, thereby avoiding direct legal issues [6][17]. - Some EU member states, like Belgium, have raised concerns about the lack of clear financial responsibility guarantees before proceeding with the plan [8]. Group 2: Lagarde's Warnings - Lagarde emphasized that any plan must strictly adhere to international law, warning of severe consequences if it does not [10][12]. - She highlighted the potential risks to the euro's status as a global reserve currency, noting that investor confidence could be undermined, leading to capital outflows and currency volatility [10][15]. - Lagarde also pointed out that consensus among jurisdictions holding Russian assets, such as the US and UK, is necessary, as unilateral actions by the EU could lead to legal repercussions from Russia [13][15]. Group 3: Broader Implications - The potential financial instability resulting from the EU's actions could have far-reaching effects, including inflation, unemployment, and currency devaluation, impacting the general public [17][18]. - Lagarde's caution serves as a reminder that while the EU's intentions may be noble, the long-term stability of the euro and adherence to international law are paramount [17][18].