EU proposes using frozen Russian assets
EU plan for Ukraine blocked by Belgium
Belgium earns tax on frozen Russian assets, and interest helps fund a G7 loan program supporting Ukraine UK
Brussels: The European Union on Wednesday unveiled a detailed and ambitious plan to channel billions of euros from frozen Russian assets into Ukraine’s economy and military effort over the next two years. But the proposal immediately hit a roadblock as Belgium — the country holding the largest share of those assets — refused to back the scheme, warning that it carries serious financial and legal risks.
European Commission President Ursula von der Leyen said the EU intends to cover two-thirds of Ukraine’s estimated financial and military needs for 2026 and 2027. The International Monetary Fund has pegged that requirement at 137 billion euros, and the EU hopes to shoulder around 90 billion euros of it. The rest, she said, would come from the bloc’s international partners.
“Today, we send a strong message to the Ukrainian people — that we stand with them for as long as it takes,” von der Leyen said, stressing that the proposal aims not only to fund Ukraine but to strengthen Kyiv’s hand in any future peace negotiations. She added that she has already briefed the incoming Trump administration in Washington about the plan.
The proposed “reparations loan” would use frozen Russian assets as collateral rather than seizing them outright. EU officials argue that the approach signals to Moscow that the costs of prolonging the war will continue to rise. At the same time, it reassures Ukraine that Europe’s support will not falter, despite political disagreements within the EU.
Since the full-scale war began in 2022, the EU has already provided more than 170 billion euros in support to Ukraine. However, raising such a large new sum requires unanimity among the 27 member states — and Hungary has repeatedly blocked major aid packages. Von der Leyen noted that if the Russian-asset plan fails to garner support, the EU could still borrow money on international markets, but that route, too, would need consensus.
The frozen Russian assets remain the most substantial and immediately accessible option. Roughly 194 billion euros are held in Belgium alone, mostly by the financial clearinghouse Euroclear. Japan holds about 50 billion euros, while the US, UK and Canada account for smaller amounts. Across Europe, around 210 billion euros remain immobilized.
Belgium, however, sees major risks. Belgian State Secretary for Recovery and Strategic Investments Thomas Prévot, reading carefully from prepared notes at NATO headquarters, urged the EU to borrow on the markets instead of relying on Russian funds. He described market borrowing as “a well-known and predictable option,” signalling that Brussels should avoid experiments that could invite retaliation or set dangerous precedents.
The European Commission tried to build safeguards into the proposal: guarantees to protect EU member states from Russian countermeasures, strict rules preventing any release of frozen assets, and a borrowing mechanism that would buffer countries from potential losses. Von der Leyen insisted the concerns were taken seriously: “We have listened carefully to Belgium and incorporated almost all their points. As always, we will share the burden fairly — that is the European way.”
Other EU nations echoed that sentiment. German Foreign Minister Johann Wadephul said Belgium’s concerns were “justified,” but insisted they were resolvable if countries acted collectively. Dutch Foreign Minister David van Weel emphasized the urgency: “These funds are crucial. Without solid support, Ukraine’s economy will face enormous strain next year.”
Several countries have already offered financial guarantees to reassure Belgium, but Brussels remains uneasy. Belgium also receives tax revenue from the frozen assets, and some of the interest generated is already directed toward a G7-backed loan program for Ukraine — another factor complicating the debate.
Adding to the tension, the European Central Bank has expressed worry that an EU-backed reparations loan might undermine confidence in the euro on global markets.
EU leaders are expected to take up the issue on December 18, in what is likely to be a contentious but decisive summit for Ukraine’s wartime stability and Europe’s unity moving forward.