A plan to give €175 billion to Ukraine is stuck due to “political issues,” Euractiv has reported
EU member states are unlikely to reach a political agreement later this month on a €175 billion ($190 billion) loan package for Ukraine financed by profits from frozen Russian assets, Euractiv reports, citing several EU diplomats.
The proposal, known as the ‘reparation loan’, is backed by Germany, France, and several eastern EU countries, but faces strong resistance from Belgium, which holds most of the immobilized assets. These funds were frozen under Western sanctions following the escalation of the Ukraine conflict in 2022.
EU member states could fail to strike a deal at the next European Council meeting in two weeks’ time “given the complexity of the matter,” one diplomat told Euroactiv on Friday. Another official said there were still “technical, vehicle, and political issues that need to be sorted out,” warning that the process could take time.
Belgium’s Euroclear depository holds around €190 billion in Russian sovereign funds. Profits from matured bonds linked to these funds have piled up at Euroclear, and EU leaders want to use the money to finance a €140 billion reparation loan for Kiev by December. The idea is to avoid directly seizing the Russian assets by instead using the profits they generate to back EU-issued bonds.
According to the Financial Times, frustration is mounting among member states over Belgium’s reluctance to approve the scheme. Belgian Prime Minister Bart De Wever recently said his country does not want to shoulder sole responsibility “if it goes wrong” and has urged other EU members to share the risks.
Supporters of the plan argue that it falls short of outright confiscation, claiming that Moscow could eventually agree to repay the loan as part of a future peace settlement.
The EU has already transferred more than €1 billion from interest on the frozen assets to Kiev, but several countries remain cautious about the legal and financial implications of further measures.
Russia has denounced any attempt to repurpose its sovereign wealth as “theft.” European Central Bank chief Christine Lagarde has also warned that the move could undermine the euro’s credibility, deter investment, and threaten financial stability.
