BRUSSELS (AP) — Belgium on Wednesday rejected a plan to use frozen Russian assets to help boost Ukraine’s economy and war effort over the next two years, saying the scheme poses huge financial and legal risks.
Ukraine’s budget and military needs for 2026 and 2027 are estimated to total around 130 billion euros ($150 billion). The European Union is committed to filling the gap. It has already spent more than 170 billion euros ($197 billion) since the war began in 2022.
The largest pot of ready funds available is through frozen Russian assets. Most of the money is kept in Belgium – about 194 billion euros as of June – and outside the EU in Japan, with about $50 billion, and the United States, the United Kingdom and Canada with lesser amounts.
The European Commission, the EU’s executive arm, was due to make public later on Wednesday details of its proposal to use Russian money as collateral to help meet Ukraine’s considerable needs through a “reparation loan”.
But Belgian Foreign Minister Maxime Prévot said that his country considers “the option of loans for reparations the worst of all, as it is risky. It has never been done before.” Russia described the scheme as “theft.”
Prevot urged the EU to borrow money for Ukraine on international markets. “It is a well-known, robust and well-established option with predictable parameters,” he said.
“The reparation loan scheme involves consequential economic, financial and legal risks,” he said, adding that the commission’s proposals do not address Belgium’s concerns. “It is not acceptable to use the money and leave us alone to face the risks.”
Belgium fears that the Brussels-based financial clearinghouse that holds the frozen assets, Euroclear, could take legal action if Russia disputes any use of the funds or if the move damages its image and business interests.
Prévot said that Belgium feels that its concerns are not being heard by its partners in the EU.
“We are not looking to antagonize our partners or Ukraine. We are simply looking to avoid potential disastrous consequences for a member state that is being asked to show solidarity without being offered the same solidarity in return,” he said.
Essentially, EU countries will lend Ukraine around 140 billion euros ($163 billion). The money is not seized as such, as Kiev will refund it once Russia pays significant reparations for the massive destruction its war has caused.
If Moscow refuses, the assets remain frozen.
Belgium’s EU partners insisted they understood.
“We take Belgium’s concerns seriously,” German Foreign Minister Johann Wadephul told reporters. “They are justified, but the issue can be resolved. It can be resolved if we are ready to take responsibility together.”
His Dutch counterpart David van Weel emphasized that “these funds are really, really important. We need to support the Ukrainian economy, otherwise they will have a very difficult time next year.”
“We understand the Belgian concerns, and we are ready to at least make sure that they are not alone in this,” he said. Several EU countries have already agreed to provide financial guarantees if things go wrong.
Belgium has been earning some revenue from the asset tax, and the interest collected is also being used to finance a loan program for Ukraine organized by the Group of Seven major world powers.
The European Central Bank is concerned that the plan for EU reparation loans could undermine confidence in the single euro currency in international markets. EU leaders are to discuss the scheme and Ukraine’s economic and military needs at a summit in Brussels on 18 December.