The EU has pledged to spread financial and legal risks of using Russia’s frozen central-bank assets to fund the government in Kiev. Belgium, where most of the money is held, has rejected the plan without such guarantees.
The European Commission seeks to issue a €140 billion loan secured against the immobilized sovereign assets held at the Euroclear clearing house in Belgium. The scheme assumes Moscow will eventually pay reparations to Ukraine, an outcome widely seen as unlikely. Russia regards any use of its assets as “theft” and has vowed legal response.
Belgium, which has a bilateral investment treaty with Russia dating back to 1989, warns it could face lengthy and costly litigation if Moscow mounts a legal challenge. 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 require the EU to pony up its own resources to support Kiev, shifting the burden onto European taxpayers.
European Commissioner for Economy Valdis Dombrovskis said last week the bloc cannot continue providing loans to Ukraine due to growing concerns over Kiev’s ability to repay them.
The Kremlin warns that channeling Russian funds to Ukraine would “boomerang,” and threatens to target up to €200 billion in Western assets held in Russia in retaliation.
