Belgium Under Pressure: Reluctance to Use Frozen Russian Assets for Ukraine Aid?

Belgium is facing mounting pressure from Berlin and other Western nations to allow the use of frozen Russian assets to provide a 'reparation loan' to Ukraine, amid a shift in international stances. In 2022, approximately €190 billion of Russian sovereign assets were frozen at Euroclear, a Brussels-based central securities depository, in response to the Russia-Ukraine conflict. However, many Western countries, including the United States, Germany, and Belgium, have been hesitant to tap into these funds due to concerns about potential legal and financial repercussions. However, recent weeks have seen a shift in the European position, especially after a US position paper, viewed by foreign media, revealed the Trump administration calling on G7 allies to seize 'or otherwise use Russian sovereign assets to fund Ukraine’s defence'. German Chancellor Merz recently wrote in an op-ed that €140 billion of these funds should be used as a loan to arm Ukraine. Since then, the European Commission has elaborated on how such a 'reparation loan' could be structured, believing Moscow should bear the cost of the Russia-Ukraine conflict. But Belgian Prime Minister De Croo has demanded that the other 26 EU member states underwrite the legal and financial risks associated with the loan and provide guarantees for the entire amount, to avoid Belgium ultimately having to repay the money. His stance has drawn condemnation from other countries, particularly as Euroclear's profits are subject to Belgian corporate income tax. 'For three years, [Belgium] has been saying that Euroclear is Belgian, so the returns are Belgian too,' said a senior EU diplomat involved in the negotiations. 'Now, when it wants to share the risk, it claims Euroclear is European.' Three diplomats involved in preparing for a fresh round of EU talks on Wednesday said their patience with Belgian officials was wearing thin. Other countries argue that Ukraine's plight requires unity, pointing out that Poland agreed to become the main hub for weapons supply to Ukraine, and Denmark agreed to send F-16 fighter jets to Kyiv, neither of which requested other countries to share the risks. 'There are no easy choices left now. Everyone has to do what they can,' said another EU diplomat. The European Commission has already attempted to alleviate some of Belgium's concerns, adding a clause that the loan would be covered by countries' contingent liabilities if Russia began paying reparations. 'We actually think the risk that Belgium is facing here is quite limited,' a senior EU official said. 'That is not to say there is no risk at all, nor that we don’t want to have a very serious discussion with Belgium… but these risks are perhaps manageable.' With the support of most EU countries, the European Commission argues that providing loans to Ukraine using the frozen Russian funds does not constitute asset confiscation, noting that the EU does not recognise court rulings outside the EU. But the Belgian government has said that 'the plans currently circulating are not satisfactory', and that contingent liabilities 'do not address the issue of risk coverage'. The EU aims to reach an agreement on the €140 billion loan by December, with the first disbursements planned for the second quarter of 2026. According to Euroclear data, since 2022, the Belgian government has collected €3.6 billion in taxes from assets belonging to the Russian central bank and Russian entities sanctioned by the EU. The Belgian government has said that these tax revenues are 'fully earmarked to support Ukraine'. However, not all of the funds have been transferred to Kyiv. De Croo said last week: 'There are some people talking behind my back saying I am a warmonger… because I want to keep a billion of taxes. For us, a billion is peanuts compared to the risk that we are taking.' Officials familiar with the discussions noted that De Croo's stance had irritated some of his EU colleagues during a recent summit in Copenhagen. They also pointed out that compared with Denmark, Sweden and Germany, Belgium's level of military support for Ukraine has been relatively low in the past three years, with the latter countries providing significantly more support. Belgian officials claim De Croo's stance is justified because he is defending national interests. 'Looking them in the eye and telling them where the red lines are is valuable in itself,' one official said. But other EU leaders say his lack of flexibility is beginning to backfire. Asked about her objections to the frozen assets plan, Danish Prime Minister Frederiksen said: 'What is the alternative? We have to find a way to finance, and if not that, I haven’t heard any [other] idea.' It is important to follow the developments of this complex debate, considering the legal, financial, and political aspects surrounding the use of frozen Russian assets. The EU's decision on this matter will have significant implications for the future of support for Ukraine and relations with Russia.