Belgium Russian Assets Ukraine Risks in EU Reparations Plan

Belgium opposes using frozen Russian assets to fund Ukraine, citing legal and financial risks. EU debates reparations loan plan to support Kyiv’s war effort.
Belgium has voiced strong reservations about the European Union’s plan to use frozen Russian assets to support Ukraine’s economy and war effort. While the EU aims to mobilize billions of euros to sustain Kyiv, Belgium warns that the plan carries legal, financial, and reputational risks that could disproportionately affect the country.

EU’s Plan to Fund Ukraine Amid War

Since Russia’s full-scale invasion of Ukraine in February 2022, the European Union has provided more than €170 billion ($197 billion) in military and humanitarian aid. Now, the European Commission plans to extend further support through a “reparations loan” mechanism.

Under this plan, frozen Russian assets held across Europe would serve as collateral to fund a €90 billion ($105 billion) loan for Ukraine over the next two years. Ukraine would repay this loan once Russia compensates the country for war damages.

European Commission President Ursula von der Leyen emphasized that the plan is a strategic move to strengthen Ukraine’s negotiating position in peace talks and to signal to Moscow that prolonging the war carries a high cost.

How the Reparations Loan Would Work

The reparations loan would allow Ukraine to access funds while keeping Russian assets frozen. Essentially, the EU would monetize the interest earned from these assets without seizing them outright. This method, while innovative, has no precedent in European financial practice.

Gregoire Roos from Chatham House described the approach as “clever” but highlighted its unprecedented scale. The plan is intended to guarantee Ukraine’s budget requirements for 2026-27, estimated by the IMF at €137 billion ($159 billion), with other international partners covering the remaining funds.

Belgium’s Concerns

Belgium, home to Euroclear – the Brussels-based clearinghouse that holds most frozen Russian funds – is cautious about the plan. Belgian officials argue that using these assets as collateral exposes the country to potential legal challenges from Russia and could damage Euroclear’s reputation and business operations.

Belgian Foreign Minister Maxime Prevot stated that the plan “entails consequential economic, financial, and legal risks” and that Belgium should not bear these risks alone. He favors traditional EU market borrowing as a safer and well-established method to fund loans for Ukraine.

Prevot emphasized:

“We are seeking solidarity, but it must be shared fairly. The reparations loan is risky and has never been attempted before.”

The Scale of Frozen Russian Assets

Western nations froze roughly €290 billion ($337 billion) of Russia’s sovereign wealth after the invasion, primarily in cash and bonds. Belgium holds a substantial portion, approximately €194 billion ($225 billion), with Euroclear alone managing €183 billion ($212 billion).

The proposed EU plan would use a portion of these assets as collateral, allowing Ukraine to benefit from their earnings while the principal remains untouched. This approach extends beyond previous G7 arrangements that only used interest from frozen assets for loans.

EU Reactions and Safeguards

EU leaders have acknowledged Belgium’s concerns. Ursula von der Leyen stressed that almost all issues raised by Belgium were considered in the proposal, with measures to share risks among member states.

German and Dutch officials echoed the sentiment, emphasizing the importance of collective responsibility. The Netherlands’ Foreign Minister David van Weel warned that without access to these funds, Ukraine’s economic situation next year could become dire.

EU countries are reportedly ready to provide backstops to protect Belgium from potential losses, ensuring the country does not face risks alone.

Looking Ahead

The reparations loan remains controversial but could play a crucial role in sustaining Ukraine’s economy and military efforts. EU leaders will revisit the issue, along with Ukraine’s broader financing needs, at the upcoming Brussels summit on December 18, 2025.

Belgium’s pushback highlights the delicate balance between solidarity with Ukraine and the legal and financial responsibilities of individual EU member states. The coming weeks will determine whether the reparations loan proceeds or if the EU relies on traditional market borrowing to fund Ukraine’s recovery.