Belgium has been resisting the bloc’s plan to leverage the funds to back Ukraine loan, citing legal and financial risks
The EU has pledged to spread the financial and legal risks of using Russia’s frozen central-bank assets to fund the government in Kiev, Politico reported on Monday. Belgium, where most of the money is held, has rejected the plan without such guarantees.
The European Commission is seeking to issue a €140 billion ($160 billion) loan secured against the immobilized sovereign assets held at the Euroclear clearing house in Belgium. The scheme is based on the assumption that Moscow will eventually pay reparations to Ukraine, an outcome widely seen as unlikely. Russia has said it regards any use of its assets as “theft” and has vowed a legal response.
According to Politico, Commission President Ursula von der Leyen has circulated a memo to EU capitals spelling out how member states would share the risks with Belgium. The document says the bloc is prepared to cover potential legal and financial fallout even if disputes arise years later.
Belgium, which has a bilateral investment treaty with Russia dating back to 1989, has warned it could face lengthy and costly litigation if Moscow mounts a legal challenge. Von der Leyen said the guarantees would also cover obligations stemming from bilateral investment treaties.
Around $200 billion of the roughly $300 billion in Russian sovereign reserves frozen by the West since 2022 are held at Euroclear. The clearinghouse has threatened to sue the EU if the bloc attempts to confiscate the assets.
The memo reportedly also set out two fallback options should governments ultimately decide against using the Russian funds. Both alternatives would require the EU to pony up its own resources to support Kiev, thus shifting the burden onto European taxpayers.
European Commissioner for Economy Valdis Dombrovskis said last week that the bloc cannot continue providing loans to Ukraine in light of growing concerns over Kiev’s ability to repay them.
The Kremlin has warned that channeling Russian funds to Ukraine would “boomerang,” and threatened to target up to €200 billion in Western assets held in Russia in retaliation.
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