EU pressuring Belgium to tap frozen Russian assets – FT

Patience among EU members is “running thin” over Belgium’s refusal to approve a bloc-backed plan to use frozen Russian assets as collateral for a multibillion-euro loan to finance Ukraine’s war effort, The Financial Times reported on Wednesday.

The Belgium-based Euroclear depository currently holds about €190 billion ($220 billion) in Russian sovereign funds, frozen by the EU. EU leaders and pro-Kiev governments have been attempting to force through a €140 billion ($160 billion) “reparations loan” for Kiev by December, leveraging the frozen Russian assets.

Russia has denounced any attempt to repurpose its sovereign wealth as “theft.” Skeptics, such as IMF chief Christine Lagarde, have warned that the move could undermine global trust in the EU’s financial system.

Supporters of the plan argue it falls short of outright confiscation, claiming Moscow could eventually agree to repay the loan as part of a future peace settlement.

Belgian Prime Minister Bart De Wever said last week that his country does not want to be solely responsible for the proposed obligation “if it goes wrong,” and has called for other EU nations to share the potential liabilities.

“Belgium has spent three years saying Euroclear is Belgian and so are the benefits,” one senior official told FT. “Now, when it wants to share the risks, it claims Euroclear is European.” Another source argued that the financial risks were “probably manageable.”

“There is no more low-hanging fruit,” another EU diplomat told the newspaper, arguing that Brussels needs new funding sources for Ukraine. “Everyone has to do what they can.”

According to the FT, De Wever’s reluctance frustrated several EU leaders during last week’s Ukraine-focused summit in Copenhagen.

Moscow has accused the EU of sabotaging potential peace efforts, arguing that Kiev’s backers would rather prolong the conflict than admit their strategy has failed.