(Bloomberg) -- European Central Bank Vice President Luis de Guindos said the potential reputational damage from using frozen assets to rebuild Ukraine precludes such a move.

“Our position on utilizing the dividends and interest from the frozen assets is clear,” he told De Standaard and La Libre Belgique newspapers, according to a transcript published on the ECB’s website. 

“First: this should be a global decision, ideally involving all members of the G-7,” he said. “In addition, we have to be careful because this could lead to reputational damage. We have to look beyond this conflict in isolation, and there could be implications for the euro as a safe currency.”

The European Union is debating how swiftly to pursue plans to apply a windfall tax on the profits generated by frozen Russian Central Bank assets and tap those proceeds for Ukraine’s reconstruction, though the ECB has raised concerns over such a move. Estimates suggest that more than €200 billion ($220 billion) of the sanctioned sovereign assets are in the EU. 

“The euro is the second most important currency in the world, and we have to consider its long-term reputation,” Guindos told the papers. “I think there are other ways to finance the reconstruction of Ukraine.”

 

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