Belgium Balks at EU's Plan to Use Frozen Russian Assets

Belgium on Wednesday rejected a plan to use frozen Russian assets to help prop up Ukraine's economy and war effort over the next two years, saying that the scheme poses major financial and legal risks. Ukraine's budget and military needs for 2026 and 2027 are estimated to total around $150 billion. The European Union, which has already poured in over $197 billion since the war started in 2022, has committed to fill that gap. The biggest pot of readily available funds is through frozen Russian assets. Most of the money is held in Belgium—more than $200 billion as of June—and outside the EU in Japan, with around $50 billion; the US, UK, and Canada hold lesser amounts.

The European Commission, the EU's executive branch, is proposing to use the Russian money as collateral to help meet Ukraine's considerable needs through a "reparations loan." Euro News describes the "untested" scheme: It would see the seized assets of the Russian Central Bank parlayed into a zero-interest line of credit for Ukraine that it would only have to repay after Russia pays significant reparations for the massive destruction its war has caused; Euro News terms that "a virtually unthinkable scenario."

Belgian Foreign Minister Maxime Prévot said that his country considers "the option of the reparations loan the worst of all, as it is risky. It has never been done before." Russia has described the scheme as "theft." Haltingly reading prepared remarks to reporters at NATO headquarters in Brussels, the BBC quotes Prévot as saying, "We keep on pleading for an alternative, namely the EU borrowing the amounts needed on the markets."

Belgium fears that the Brussels-based financial clearing house holding the frozen assets, Euroclear, could take legal action if Russia challenges any use of the funds. Bloomberg reports Belgium's key concern is that it could be the one ultimately forced to repay the loan. Regardless, Euro News reports that European Commission President Ursula von der Leyen is plowing ahead, offering "sweeping guarantees" intended to change Belgium's mind. A final decision is scheduled to be made in Brussels on Dec. 18.