Belgium Rejects EU Plan to Fund Ukraine Using Frozen Russian Assets Citing Financial and Legal Risks

The frozen Russian assets represent the largest available fund source for Ukraine's support.

Belgium has expressed opposition to the European Union's proposal of utilizing frozen Russian assets to support Ukraine's economy and war efforts over the upcoming two years, citing significant financial and legal concerns.

Ukraine requires approximately 130 billion euros ($150 billion) to cover its budget and military needs for 2026 and 2027. The European Union has pledged to address this financial gap, having already contributed over 170 billion euros ($197 billion) since the conflict began in 2022.

The most substantial available funding source comes from frozen Russian assets. Belgium holds the majority of these funds, approximately 194 billion euros as of June, with additional amounts stored in Japan (around $50 billion) and smaller portions in the United States, United Kingdom, and Canada.

The European Commission was scheduled to release details of its "reparations loan" proposal on Wednesday, which would use the Russian assets as collateral to meet Ukraine's substantial financial requirements.

However, Belgian Foreign Minister Maxime Prévot declared that Belgium considers "the option of the reparations loan the worst of all, as it is risky. It has never been done before." Russia has characterized the proposed plan as "theft."

During a press conference at NATO headquarters in Brussels, Prévot advocated for the EU to secure funding for Ukraine through international markets instead, describing it as "a well-known, robust and well-established option with predictable parameters."

"The reparation loans scheme entails consequential economic, financial and legal risks," he emphasized, noting that the commission's proposals fail to address Belgium's concerns. "It is not acceptable to use the money and leave us alone facing the risks."

Belgium is concerned that Euroclear, the Brussels-based financial clearing house holding the frozen assets, might pursue legal action if Russia challenges the use of these funds or if the arrangement damages its reputation and business interests.

Prévot expressed that Belgium feels its concerns are being overlooked by EU partners.

"We are not seeking to antagonize our partners or Ukraine. We are simply seeking to avoid potential disastrous consequences for a member state that is being asked to show solidarity without being offered the same solidarity in return," he stated.

Under the proposed plan, EU countries would provide Ukraine with approximately 140 billion euros ($163 billion) as a loan. The funds would not be permanently seized, as Ukraine would repay the amount once Russia delivers substantial reparations for war damages.

Should Moscow refuse to pay reparations, the assets would remain frozen.

Other EU nations have acknowledged Belgium's position.

"We take Belgium's concerns seriously," German Foreign Minister Johann Wadephul told reporters. "They are justified, but the issue can be resolved. It can be resolved if we are prepared to take responsibility together."

Dutch Foreign Minister David van Weel emphasized, "These funds are really, really important. We need to support the Ukrainian economy; otherwise, they will have a very tough time next year."

"We understand the Belgian concerns, and we are willing to at least make sure that they are not alone in this," he added. Several EU countries have already committed to providing financial guarantees as contingency measures.

Belgium has been generating tax revenue from these assets, and the interest accumulated is already being utilized to fund a loan program for Ukraine, organized by the Group of Seven major world powers.

The European Central Bank has expressed concerns that the EU reparation loan plan might undermine international confidence in the euro. EU leaders are scheduled to discuss this scheme and Ukraine's economic and military requirements at a summit in Brussels in December.