Belgium lays out red lines on €140B “Ukraine loan”

Belgian PM Bart De Wever’s stance irked some fellow EU leaders at a recent summit in Copenhagen.
Photo: DPA

EU pressure builds on Belgium to allow use of Russia’s frozen assets. Belgian PM Bart De Wever has suggested that the Commission’s scheme to leverage Russian frozen assets effectively amounts to confiscation, POLITICO writes.

Belgium has laid out its red lines for using Russian assets to fund a €140 billion reparations loan to Ukraine, including an agreement by EU countries to share all current and future risks related to the plan for an amount exceeding €170 billion.

EU capitals are racing to quell Belgium’s concerns around the loan ahead of a crucial summit of EU leaders on Oct. 23. Securing a political agreement at the summit would pave the way for the bloc to put forward a legal proposal shortly after.

Among the EU’s 27 countries, Belgium has the most skin in the game as it hosts the financial depository, Euroclear, which holds the bulk of the Russian state assets that were frozen after February 2022. 

The Belgian government fears it will be on the hook for any legal and financial claims filed by Russia and has been loudly calling for all EU countries to guarantee the loan, which effectively means using taxpayer money to cover any costs.

“These guarantees cannot be limited to the €170 billion in cash that the Commission proposes to mobilize,” Belgian Prime Minister Bart De Wever told EU leaders during an informal summit last week in Copenhagen, according to a statement seen by POLITICO. “The potential exposure could be much higher than the nominal amount.”

Crucially, he added a further condition that “the guarantees do not automatically end when sanctions are lifted. Arbitration procedures could still emerge years later.”

The statement — a list of talking points delivered to European leaders on Oct. 1 — details the red lines that De Wever has drawn for fellow leaders and the EU executive, who are seeking workarounds to make the plan acceptable for Belgium.

These include not supporting any measure that could be interpreted as asset confiscation; legally binding, strictly enforceable guarantees that European countries would share all current and future risks for both Euroclear and Belgium; and an agreement to immediately stump up the cash if Euroclear needs to return the assets to Russia, for example following a peace deal.

“The statement by the Belgian prime minister raised lots of difficult questions and they are still being examined,” said a senior EU diplomat, granted anonymity to talk about the contents of a confidential statement. “The guarantees must be sound at the end of the day.”

The Commission proposed using €175 billion in cash that has matured from frozen Russian state assets invested in Western government bonds to fund a €140 billion reparations loan to Ukraine and repay a previous G7 loan to the war-torn country.

The cash is currently sitting idle on deposit at the European Central Bank (ECB) under the stewardship of Euroclear.

Reparation or confiscation?

In his statement to leaders, De Wever suggested that the Commission’s scheme effectively amounts to confiscation — a refutation of the Commission’s stance that its loan would not involve seizing Russia’s state assets.

“The distinction between a reparation loan and confiscation is, in reality, extremely narrow,” De Wever said. “If these assets remain immobilised for an extended period, the arrangement could be seen as a quasi-confiscation.”

He suggested the Commission’s scheme could violate Belgium and Luxembourg’s bilateral investment treaties with Russia, which were signed during the final stages of the Cold War in 1989.

The Commission has downplayed such concerns, with a senior official suggesting in a briefing to journalists on Monday that the “risks for Belgium are limited [and] we have a solid base in saying that this is not confiscation under EU law.”

De Wever also argued that the operation could prompt Chinese investors in particular to withdraw their deposits with Euroclear over fears that their reserves might also be seized in future.

The European Central Bank has warned against any formal seizure of assets for fear it would undermine the euro on the international stage and lead to retaliation in foreign countries.

A growing pressure

Belgium is under growing pressure to allow the use of frozen Russian assets for a “reparations loan” to Ukraine after Berlin and other western capitals shifted their stance, ‘Financial Times’ writes.

Europe’s position has changed in recent weeks, particularly after the Trump administration called on G7 allies to seize “or otherwise use” Russia’s underlying assets “to fund Ukraine’s defence”, according to a US position paper seen by the Financial Times.

Chancellor Friedrich Merz wrote in a recent FT op-ed that €140bn of those funds should be used as a loan to arm Ukraine. The European Commission has since laid out how such a “reparations loan” could be structured, arguing that Moscow should bear the costs of war.

But Belgian Prime Minister Bart De Wever has asked the other 26 EU countries to cover the legal and financial risks associated with this loan, and to guarantee the full amount to avoid Belgium having to pay it back.

His stance has drawn condemnation from other capitals, particularly since Euroclear’s profits have been subject to Belgian corporate tax.

“We think actually that the risks here for Belgium are rather limited,” said a senior EU official. “That is not to say that there is no risk at all and it is not to say that we do not want to engage in a very serious discussion with Belgium . . . But these risks are probably manageable.”

The commission, backed by the majority of EU capitals, argues that the loan is structured in a way that does not amount to asset confiscation and points out that court rulings outside the bloc are not recognised by the EU.

But the Belgian government said that “the current plan that is circulating is not satisfactory”, and that contingent liabilities did not “address the issue of risk coverage”.

A question for €140bn

The EU is aiming to agree on the €140bn loan by December, with first disbursements planned for the second quarter of 2026.

According to Euroclear, since 2022 the Belgian government has collected €3.6bn in taxes on the profits arising from assets belonging to Russia’s central bank and to Russian entities subject to EU sanctions.

The Belgian government said that those tax revenues were “earmarked entirely for the support of Ukraine”.

De Wever’s stance had irked some fellow EU leaders at a recent summit in Copenhagen, officials briefed on the discussions told the FT. They also pointed to Belgium’s relatively low level of military support to Ukraine over the past three years, compared with Denmark, Sweden and Germany, who had provided far more.

Belgian officials claim De Wever’s position is justified, as he is defending his national interest.

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