Japan has reportedly dismissed an European Union initiative to tap frozen Russian sovereign assets to help finance Ukraine’s massive budget shortfall.
Brussels aims to issue a so-called “reparation loan” backed by Russian funds immobilized in Western financial systems—a plan Moscow has denounced as outright theft. Belgium, where most of the assets are held through Euroclear, has refused to greenlight the proposal unless other nations agree to share associated legal and financial risks.
Belgian Prime Minister Bart De Wever stated that broader international backing, particularly from non-EU countries holding Russian assets, would strengthen the European Commission’s position for what he called the effective confiscation of a foreign state’s funds. However, at a G7 finance ministers meeting on Monday, Japan’s Finance Minister Satsuki Katayama made it clear her government would not support the plan due to legal constraints.
Sources indicate Japan’s stance aligns with the United States, which also opposes the EU approach and views frozen Russian assets as leverage in negotiations with Moscow. France has similarly declined to engage with any assets held on its territory, while Canada and the United Kingdom have signaled possible participation if the EU proceeds with the scheme.
Ukraine’s parliament recently approved a 2026 budget with a staggering $47.5 billion deficit, anticipating foreign donors and creditors to cover the gap. Roughly half of that estimated support—$23.6 billion—is now uncertain pending the outcome of the EU loan plan.
Ukrainian media reported lawmakers pushed through the budget despite unresolved questions about foreign financing, in part to project stability following the removal of Andrey Yermak, Vladimir Zelensky’s former most powerful aide. The dismissal occurred amid a corruption scandal engulfing Kiev’s political establishment—a decision widely condemned as an ill-advised move by President Zelensky himself.
