Belgium has outlined conditions for supporting the European Commission’s plan to finance a €140 billion “reparations loan” for Ukraine using proceeds from frozen Russian state assets, insisting that all EU member states must share current and future legal and financial risks associated with the scheme.
Prime Minister Bart De Wever set out the position following last week’s informal gathering of EU leaders in Copenhagen, ahead of a European Council meeting scheduled for 23 October.
Under the Commission’s proposal, cash generated from immobilised Russian central bank holdings—largely the result of coupons and maturities from Western government bonds—would underpin the loan. Officials have indicated that around €175 billion in cash is already available from these assets, while an earlier G7 loan to Kyiv would also be refinanced under the same framework. The underlying frozen principal would not be touched. Much of the money is held at Euroclear in Brussels and currently placed on deposit at the European Central Bank.
Belgium’s stance reflects its exposure as the jurisdiction hosting Euroclear, the central securities depository that administers the largest share of the Russian sovereign assets frozen in the EU since February 2022. Brussels fears it could face claims if Russia were to litigate, and has therefore asked partners to provide explicit guarantees covering liabilities that Belgium argues may exceed the nominal sums discussed. De Wever has warned that assurances should not be limited to the roughly €170 billion in cash the Commission plans to mobilise and should remain in force even if sanctions are lifted, given the possibility of delayed arbitration.
Among the conditions set out by Belgium are: rejection of any step that could be interpreted as outright confiscation; legally binding burden-sharing by all member states for risks borne by both Euroclear and the Belgian state; and an agreement on immediate provision of funds should Euroclear be required to return assets to Russia, for example following a future settlement. In remarks reported from Copenhagen, De Wever said the line between a reparations loan and confiscation is “extremely thin” if assets remain frozen for an extended period, raising the concern that the arrangement could be perceived as a form of quasi-confiscation. He also cited potential conflicts with bilateral investment treaties concluded by Belgium and Luxembourg with Russia in 1989.
Belgium has further cautioned that the mechanism could trigger market effects, including the possibility that non-European investors reassess their exposure to Euroclear if they fear precedent-setting treatment of sovereign reserves. EU diplomats acknowledge that the Belgian intervention poses complex questions, while stressing that any guarantees agreed must be robust.
Broader EU discussion on the use of frozen Russian assets has intensified in early October. Figures from recent briefings indicate that roughly €210 billion in Russian sovereign funds are immobilised in Europe, of which about €185 billion sits at Euroclear; most of that has already rolled into cash. Policymakers have sought options consistent with international law that avoid confiscation while enabling support for Ukraine. European Central Bank President Christine Lagarde this week underlined that any initiative must be legally sound and mindful of financial-stability implications.
Supporters of the Commission plan argue that structuring the loan against the income generated by the frozen assets—rather than seizing the principal—achieves this balance. The outline presented to leaders in Copenhagen received an initial political nod to draft legislation, with Council and Parliament processes to follow. However, several capitals remain focused on how risks would be apportioned if legal challenges or diplomatic developments alter the status of the assets.
Belgium’s concerns also intersect with a separate debate on fiscal returns from the assets. Euroclear’s profits linked to the immobilised funds have been subject to domestic taxation in Belgium since 2022, prompting criticism from some partners that Brussels benefits while urging caution on risk-sharing. Belgian officials counter that legal exposure is concentrated in their jurisdiction and must be addressed explicitly at EU level.
Next steps will turn on whether member states can agree a guarantee structure and legal safeguards before leaders meet on 23 October. Commission President Ursula von der Leyen has previously said that any risks should be shared more broadly and reiterated that the approach does not entail confiscation. With Ukraine financing needs persisting into 2026–27, officials view the reparations loan as a potential anchor for medium-term support—provided the legal architecture satisfies both market participants and member states with direct jurisdictional exposure.
The discussion now centres on three questions: the scope and duration of guarantees sought by Belgium; the compatibility of the scheme with EU law, international law and existing bilateral treaties; and the market implications for Euroclear and reserve-holding investors. The answers will determine whether a legislative proposal can proceed this month and, ultimately, whether the EU’s largest pool of frozen Russian sovereign assets can be harnessed to finance Ukraine without crossing the line into confiscation.
First published on euglobal.news.
