Belgium has rejected a proposal by the European Union to channel frozen Russian assets toward a major financial aid package for Ukraine, dealing a blow to efforts aimed at sustaining Kyiv’s war-time finances. The plan envisioned a €140 billion “reparations loan,” backed by immobilised Russian central-bank reserves held largely in Belgium’s Euroclear, but Belgian leaders argued the risks are too high—legal, financial and reputational.
The opposition centres on statements from Bart De Wever, Belgium’s prime minister, who described the plan as “fundamentally flawed”. He warned that using the frozen assets at this stage could trigger lawsuits, force Belgium to shoulder massive liabilities, and destabilise confidence in the euro. De Wever rejected broad incentives offered by the European Commission and demanded legally binding guarantees from other EU member states before any commitment.
Backing Ukraine with frozen Russian funds had gained traction as European leaders scrambled to meet Kyiv’s projected needs through 2026–2027. Analysts estimate that Ukraine faces a budget shortfall of more than €135 billion over the next two years, with defence expenditures alone ballooning. The EU had considered not just using interest on the frozen assets — which has supported a G7-backed aid programme so far — but deploying the assets themselves as collateral to unlock large-scale funding.
Yet the European Central Bank has refused to provide emergency liquidity for the proposed loan, citing its mandate forbidding direct monetary financing to governments under EU treaties. The refusal undermines the viability of the scheme, especially since liquidity back-stops were meant to reassure markets and protect institutions like Euroclear from sudden liability.
Some EU member states and financial experts contended that employing frozen assets would free up taxpayer money and symbolically re-affirm Europe’s stance that Russia must pay for its aggression. Academics have pointed out how using immobilised reserves could offer Ukraine immediate relief without expanding EU sovereign debt. The Commission is reportedly exploring fallback options, such as joint borrowing backed by the EU budget or bilateral loans, but those alternatives are expected to carry higher costs and slower disbursement timelines.
Opposing countries argue the plan violates property rights, jeopardises investor confidence and could provoke Russian retaliation, both legally and economically. Euroclear itself has warned of potential lawsuits and damage to its reputation as a global securities depository if assets are re-purposed in this way.
With less than three weeks remaining before a planned EU summit, Belgium’s refusal complicates efforts to finalise a unified approach. Brussels appears unlikely to shift position without assurances that risks will be shared evenly — a prospect many member states view as tantamount to signing a blank cheque.
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