Belgium has formally rejected a contentious European Union proposal to use frozen Russian state assets to finance Ukraine's war effort and economic recovery, branding the scheme as dangerously risky.
Belgium's Stance on Financial and Legal Perils
On Wednesday, Belgian Foreign Minister Maxime Prévot publicly dismissed the EU's plan to use the frozen funds as collateral for a massive "reparations loan." He argued the unprecedented move poses significant economic, financial, and legal dangers that have not been adequately addressed. Ukraine's needs for 2026 and 2027 are estimated at around 130 billion euros (£110bn), a gap the EU has committed to fill.
Prévot, speaking at NATO headquarters in Brussels, stated Belgium considers the loan option "the worst of all." He urged the bloc to instead borrow the money for Ukraine on international markets, calling that a "well-known, robust and well-established option."
The Core of the Dispute: €194bn Held in Belgium
The heart of the issue lies in the location of the frozen funds. The vast majority of immobilised Russian central bank assets within the EU—approximately 194 billion euros as of June—are held in Belgium, primarily by the Brussels-based financial clearing house Euroclear. Significant sums are also held in Japan, the United States, the United Kingdom, and Canada.
Belgium fears that if the assets are used as collateral and Russia legally challenges the move, Euroclear could take action. The government is also concerned about damage to the institution's reputation and business interests. "It is not acceptable to use the money and leave us alone facing the risks," Prévot emphasised.
Broader Implications and Next Steps
The proposal, which was due to be detailed by the European Commission on Wednesday, would see EU countries lend Ukraine around 140 billion euros. Kyiv would repay the loan once Russia paid war reparations; if Moscow refused, the assets would remain frozen. Belgium has already been channelling tax income and interest from the frozen assets to a G7-run loan programme for Ukraine.
The rejection creates a major hurdle for EU unity on Ukraine funding. The European Central Bank has separately warned that the reparations loan plan could undermine confidence in the euro. EU leaders are scheduled to debate the scheme and Ukraine's needs at a summit in Brussels on 18 December.
Prévot concluded that Belgium is not seeking conflict but wants to avoid "potential disastrous consequences" for a member state showing solidarity without receiving it in return. Russia has previously condemned any use of its frozen assets as "theft."
