Belgium calls on Europe to scrap the plan to use frozen Russian assets to aid Ukraine
A sharp rebuke from Belgium argues that the EU is glossing over significant risks tied to tapping assets frozen in Europe to fund Kyiv’s needs. Foreign Minister Maxime Prévot emphasizes an alternative path: the EU could borrow the necessary funds on financial markets instead of seizing the assets themselves.
The European Commission’s proposal, backed by German Chancellor Friedrich Merz, would convert about €140 billion ($123 billion) of Russian state assets held in Belgium into a reparations loan to support Ukraine next year. Most EU members back the idea, but Belgium warns the move could jeopardize a fragile peace agreement in the near term and invite future Russian legal challenges.
Russia has denounced the plan, and a top Russian banker warned of decades-long litigation if it goes ahead. The Commission is set to propose mechanisms to break the deadlock, but Prévot has criticized the current text as failing to resolve Belgian concerns satisfactorily.
Until now, EU members have used profits from roughly €210 billion in frozen Russian assets to fund Ukraine’s defense after Russia’s full-scale invasion in February 2022. Opening the assets themselves to a loan has proven far more contentious.
Leaders are expected to vote on the reparations loan at a Brussels summit later this month, though a consensus remains uncertain. Belgium has been the most vocal critic, partly because most frozen assets—€185 billion—are held at Euroclear, the Brussels-based central securities depository.
Belgian officials warn they would bear the liability if Russia challenges the loan or if sanctions on Russia are lifted and the assets are misused. Prévot warned of bankruptcy for Belgium, saying, “If Russia takes us to court, it could win, and Belgium would be unable to repay €200 billion—equivalent to an entire year’s federal budget.”
Prime Minister Bart De Wever has publicly urged the European Commission President Ursula von der Leyen to scrap the plan, calling it fundamentally flawed. Similarly, Euroclear’s chief, Valérie Urbain, has echoed these concerns in a coordinated stance.
De Wever, a Flemish nationalist, says Belgium needs a legally binding agreement that spreads risk if the Ukraine loan collapses or sanctions are reversed. Securing such guarantees may prove difficult, as the European Central Bank has stated it cannot serve as a lender of last resort.
Belgium’s prime minister has proposed funding Ukraine next year with a €45 billion EU loan drawn from existing shared budgets across the 27 member states. Chancellor Merz, however, argues that this approach is not ideal and pushes for action using frozen Russian assets to support Ukraine, calling the move increasingly urgent amid intensifying Russian aggression and the approaching winter.
EU foreign policy chief Kaja Kallas agrees that a reparations loan could fortify Europe’s stance against Moscow and potentially incentivize President Putin to return to the negotiating table.
Veerle Colaert, a financial law expert at KU Leuven, supports Belgium’s concerns, noting Euroclear’s contractual obligations to repay the Russian central bank on demand. If sanctions were lifted and Euroclear lacked funds due to lending to the EU, Belgium could be forced to step in, and the stakes are high. She argues that a legally binding, on-demand guarantee from other member states to share the risk is necessary.
She also warns that tapping Europe’s foreign reserves could erode confidence in Europe’s financial system and suggests borrowing the money through traditional market loans as a safer alternative. She views both options as requiring repayment by Europe, noting that while pulling funds from Euroclear’s frozen reserves is interest-free, it carries significant risk.
Russia has warned of retaliation if the EU uses frozen assets for a Ukraine loan. Andrei Kostin, head of VTB Bank, threatened half a century of litigation if the plan takes effect, insisting Russia could endure the seizure but lamenting that such funds might be used for war instead of peace.
EU leaders previously failed to settle on a plan in October. Von der Leyen indicated in late November that the Commission would present a legal framework detailing how a reparations loan would function. Although expectations were high, internal disagreements have slowed progress.
With Washington and Moscow steering the pace of discussions, EU member states continue to wrestle with funding their ally amid a tense geopolitical backdrop.
Would a carefully designed, legally binding shared-risk mechanism make the reparations loan acceptable to all EU members, or is a market-backed loan a safer, more sustainable path for Ukraine?
