Belgium Rejects EU Proposal to Use Frozen Russian Assets for Ukraine’s Reconstruction

Brussels, Belgium — Belgium has voiced strong opposition to a European Union proposal aimed at using Russia’s frozen assets to finance Ukraine’s reconstruction, describing the scheme as “fundamentally wrong” and raising concerns about its potential to destabilize financial markets. The move has cast doubt on how Europe will secure the necessary funds to support Kyiv in the aftermath of the ongoing war with Russia.

In a sharply-worded letter to European Commission President Ursula von der Leyen, Belgian Prime Minister Bart De Wever condemned the plan, arguing that it would violate international law and create unnecessary risks for the EU’s financial stability. “These risks are unfortunately not academic but real,” De Wever wrote, referring to the potential for legal and market uncertainty that could harm the euro and the broader European financial system.

Belgium Holds a Significant Stake in Frozen Russian Assets

Belgium, which hosts the largest share of Russian assets frozen in Europe, holds an estimated €183 billion at the Brussels-based Euroclear central securities depository. This figure accounts for nearly two-thirds of the Russian assets immobilized across Western nations since the invasion of Ukraine.

As the European Commission prepares to unveil a draft legal framework for using these assets to support Ukraine’s financial needs, De Wever’s intervention raises questions about the legality and practicality of such a plan. The proposal would see the frozen Russian assets, primarily in Belgium, used as collateral for a €140 billion loan intended to assist Ukraine’s ongoing defense and reconstruction efforts.

Legal and Market Risks Highlighted by De Wever

In his letter, De Wever warned of the “systemic risks” posed by the proposal, arguing that Euroclear could face lawsuits from Russia over the confiscated assets. If successful, such legal challenges could leave the Belgian government facing potentially multibillion-euro liabilities.

“The idea of using frozen assets as collateral presents considerable legal uncertainty,” De Wever explained. He further argued that such an approach would likely disrupt the EU’s financial markets and erode trust in Europe’s financial infrastructure, potentially weakening the euro.

He insisted that Belgium would not sign off on the plan unless all its concerns were addressed, including securing “full guarantees” from willing member states to cover any financial fallout from the proposal. De Wever also pointed out that pursuing this option would tie up critical resources needed for Ukraine’s long-term recovery. He cautioned that if Russia ultimately emerges victorious or reaches a peace agreement, the country would likely seek the return of its sovereign assets.

Tensions Between EU Member States

The disagreement highlights a deepening rift within the EU over how best to support Ukraine’s recovery and maintain pressure on Russia. While some EU leaders are pushing for quick action on the frozen assets plan, others are more cautious, with Belgium leading the charge against what it sees as a reckless approach.

EU leaders had initially failed to reach a consensus on the issue in October, but the urgency to act has increased in the wake of a controversial US-led proposal, which suggested that a portion of Russia’s frozen assets could be used for investment in Ukraine and for US-led reconstruction efforts. Although those specific proposals were removed from the latest iteration of the US plan, the push for European action has only intensified.

Latvia’s former prime minister Krišjānis Kariņš emphasized the pressure facing EU decision-makers, stating that European leaders are realizing the need to retain control over these assets to prevent them from falling under US influence.

De Wever’s Concerns Over the US Proposal

Belgium’s opposition also stems from concerns over the US-led 28-point plan, which proposed using $100 billion of frozen Russian assets to finance reconstruction projects in Ukraine. The plan, which also included a controversial proposal for the US to keep 50% of profits from any ventures, alarmed many European leaders who felt that European assets should remain under European control.

Kariņš added that the US proposal had “sharpened some European minds,” making it clear that Europe must act swiftly to avoid the risk of losing control over the funds. “It’s better to make decisions quickly and avoid anyone else getting their hands on the assets,” he said.

EU’s Pressing Need for Funding

Despite internal disagreements, there is widespread recognition within the EU of the need for a clear strategy to fund Ukraine’s ongoing defense. The European Commission has argued that the frozen Russian assets offer a viable option to meet Ukraine’s financial needs.

Kaja Kallas, the EU’s high representative for foreign policy, reiterated the urgency of the situation following a meeting with EU foreign ministers. “Using the frozen assets would send the strongest message to Moscow: that it cannot wait us out,” she said, emphasizing the importance of acting swiftly to ensure continued support for Ukraine.

EU diplomats have acknowledged the complexity of the proposal, noting that it would require unanimous approval from all member states, including those with more pro-Russian stances, such as Hungary. Some officials have raised concerns that even in the best-case scenario, it could take months for the frozen assets to be unlocked, and that interim financial solutions may be necessary to bridge the gap.

Looking Ahead: A Divided EU

With the EU summit scheduled for December 18-19, leaders will face a critical decision about how to move forward with Ukraine’s financial support. Belgium, however, has made it clear that it will not support the current proposal unless substantial changes are made to mitigate the risks involved.

De Wever’s stance has brought the issue of Russia’s frozen assets into sharp focus, with the future of the plan now uncertain. As the EU struggles to navigate competing interests and legal hurdles, it remains to be seen whether Europe will find a way to use these assets effectively without jeopardizing its financial stability or alienating member states.