The EU is increasing pressure on Belgium to use frozen Russian assets for a “reparation loan“ to Ukraine, the Financial Times reports, citing diplomatic sources.
In early October, Reuters reported that EU leaders supported the European Commission's plan to use Russian assets frozen in the Euroclear depository (under Belgian jurisdiction). The depository holds Russian assets worth approximately 190 billion euros. The plan does not envisage the direct expropriation of the assets; instead, the EU would provide Ukraine with a loan of 140 billion euros, secured by these funds.
According to the plan, Ukraine would have to repay the loan after the end of the war and Russia would agree to compensate for the damage. The European Commission will then return the funds to Euroclear, and Russia will be able to use them again.
Belgian Prime Minister Bart de Wever said he had asked other EU leaders to provide legal guarantees that all EU countries would share the potential financial risks in the event of possible lawsuits or other actions by Russia. Without this, Belgium would not have agreed to the seizure of funds. Brussels' position has drawn condemnation from some EU members.
EU countries argue that the situation in Ukraine requires solidarity, recalling that, for example, Poland hosted the main hub of Western weapons for Ukraine, and Denmark donated F-16 fighter jets without requiring other countries to share the risks. “We believe that the risks for Belgium here are quite limited. "That doesn't mean there are no risks and it doesn't mean we don't want to start a very serious conversation with Belgium... But those risks are probably manageable," one diplomat said.
Since 2022, the Belgian government has collected 3.6 billion euros in taxes on profits made from frozen Russian assets. As the FT notes, despite Belgium's claims that these tax revenues were entirely intended to support Ukraine, not all the money has been transferred to Kiev.
Last month, Belgium categorically rejected a proposal by German Chancellor Friedrich Merz to use Russian assets frozen by the EU to finance Ukraine, the Belgian news agency Belga reported, quoted by BTA. "I want to be absolutely clear on this issue. Take Putin's money and leave the risks to us? That will not happen," Belgian Prime Minister Bart de Wever said. Earlier in an article for the FT, Merz suggested that frozen Russian assets could be used to provide Ukraine with an interest-free loan of around €140 billion. Under Berlin's plan, the loan would have to be repaid only after Russia pays compensation for war damage.
A large part of these funds - approximately €170 billion - are stored in the Belgian central securities depository “Euroclear“. Currently, only the interest on the frozen assets is being used to help Ukraine. However, Belgium rejects using the assets themselves, fearing arbitration claims and the risk of being forced to return the amounts to Moscow in the future.
In addition, the possible disposal of these funds would have a serious impact on the country's public finances. The Belgian government relies on a 25 percent corporate tax on Russian assets to finance its plans to increase military spending to 2 percent of GDP. If the EU accepts Merz's proposal, De Wever will have to look for alternative sources of revenue.