Belgium has sharply criticized the European Union’s proposal to transform frozen Russian assets into a financial “reparations loan” for Ukraine, calling the plan legally risky and potentially catastrophic for its own national finances.
Foreign Minister Maxime Prévot said Belgium has repeatedly urged the EU to consider an alternative approach: borrowing funds on the market instead of tapping into frozen Russian state assets. “We keep on pleading for an alternative,” he stressed.
The controversial EU plan, championed by German Chancellor Friedrich Merz, would see around €140 billion (£123bn) of Russian assets held in Belgium redirected to support Kyiv’s financial needs next year. While the majority of EU countries favor the proposal, Belgium has become its most vocal critic.
Authorities in Brussels argue that using these frozen assets could endanger peace negotiations in Ukraine and expose Belgium to potential legal action from Russia. Russian officials, including VTB Bank chairman Andrei Kostin, have warned the EU of decades-long litigation if the plan proceeds.
“The risks are clear: if Russia takes us to court, Belgium will not be able to repay €200 billion,” Prévot warned, noting that this figure equates to the entire Belgian federal budget for a year. “It would mean bankruptcy for Belgium.”
Belgium’s Prime Minister, Bart De Wever, has formally written to European Commission President Ursula von der Leyen, calling the plan “fundamentally wrong.” In coordination, Valérie Urbain, head of Euroclear, echoed concerns about potential liabilities stemming from the proposed loan.
The majority of frozen Russian assets—€185 billion—are held at Euroclear, the Brussels-based central securities depository, placing Belgium at the center of any legal exposure. De Wever has requested legally binding guarantees from EU member states to ensure shared risk should the loan fail or sanctions be lifted.
EU sources, however, indicate that such guarantees may be difficult. The European Central Bank has made clear it cannot act as a lender of last resort for such a scheme. De Wever has proposed a €45 billion alternative loan from the EU’s existing shared budget to support Ukraine next year.
Germany’s Chancellor Merz insists the frozen assets must be used. “Ukraine needs our support. Russian attacks are intensifying. Winter is already here. We need a joint EU solution,” he said, urging fellow leaders to back the plan.
EU foreign policy chief Kaja Kallas echoed Merz, arguing that a reparations loan would bolster Europe’s stance against Moscow and incentivize President Vladimir Putin to engage in peace talks.
Legal experts support Belgium’s caution. Veerle Colaert, a financial law professor at KU Leuven University, highlighted that Euroclear remains contractually obligated to repay the Russian central bank on demand. “If sanctions are lifted and the money has been lent to the EU, Belgium would have to cover the shortfall,” she explained.
Colaert stressed that while the EU could obtain interest-free funds from the frozen assets, the risks are far from negligible. She recommends raising a loan on the markets instead, where legal liability would not fall disproportionately on one member state.
Russia has repeatedly condemned the EU proposal. Kostin warned that using the assets for Ukraine could prompt 50 years of litigation and labeled the seizure of state funds “unacceptable.” Moscow insists its reserves should not be diverted to fund military efforts.
Previous EU attempts to resolve the issue have faltered. Talks in October failed to secure consensus, and although the Commission promised a legal framework for the reparations loan by November, disagreements among member states have delayed progress.
With a summit planned later this month in Brussels, the EU faces mounting pressure to balance the urgent financial needs of Ukraine with the legal and financial concerns raised by Belgium. The outcome remains uncertain, with member states divided over the best course of action to support Kyiv while protecting national interests.
The standoff highlights the challenge of navigating complex geopolitics, financial risk, and solidarity within the European Union at a critical moment in the Ukraine conflict.
This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members
