Belgium Rejects Controversial EU Plan to Fund Ukraine with Frozen Russian Assets

Belgium has rejected an EU initiative that would use frozen Russian central bank reserves as backing for a large “reparations loan” intended to help finance Ukraine. Brussels argues that the plan carries unacceptable legal and financial exposure. The idea, promoted by the European Commission, aims to secure funding for Ukraine’s estimated budget and defense costs of roughly €130 billion for 2026–2027. Since the conflict began in 2022, the EU has already provided more than €170 billion in various forms of assistance.

Most of the immobilized Russian assets—about €194 billion—are held at Euroclear, the Brussels-based clearing institution, making Belgium the key jurisdiction involved. Foreign Minister Maxime Prévot described the loan concept as “the worst of all,” calling it both risky and without precedent.

Belgian officials argue that Euroclear could face severe liability if Russia were to legally challenge the use of its reserves or if a member state blocked the periodic renewal of sanctions. Under such circumstances, Euroclear could be compelled to repay the entire amount immediately, a burden that would ultimately fall on Belgium. Prévot stressed that Belgium would not accept shouldering these consequences alone, insisting that other EU governments commit to legally binding burden-sharing. Prime Minister Bart De Wever likewise demanded risk-sharing guarantees that would remain valid even if the sanctions architecture changed.

The proposal encountered additional obstacles when the European Central Bank declined to serve as Euroclear’s lender of last resort. The ECB concluded that providing a backstop for the roughly €140 billion loan would amount to prohibited “monetary financing”—direct support of governments—which EU treaties forbid because of inflation and credibility risks for the euro. The ECB also warned that the scheme could weaken international confidence in the single currency.

Under the Commission’s draft plan, EU countries would lend Ukraine approximately €140 billion, using the frozen Russian funds as collateral. Ukraine would repay the loan should Russia eventually cover substantial war-damage compensation; if Russia refuses, the assets would remain frozen. Belgium, meanwhile, continues to collect taxes on income generated by these holdings, and the interest is already being used in a Group-of-Seven-coordinated lending facility for Ukraine.

Given Belgium’s firm objections and the ECB’s refusal to support the plan, the Commission is now exploring alternative options ahead of the EU leaders’ summit on December 18, where Ukraine’s financing needs and the contested proposal will be central items for debate.