The scheme would force Belgium-based Euroclear to fund a new ‘reparations’ loan for Ukraine using frozen Russian money
The EU will press ahead with its plan to seize Russia’s immobilized central bank assets to arm Ukraine, brushing aside objections from Belgium, which hosts most of the funds.
European Commission President Ursula von der Leyen issued the statement on Wednesday, outlining a proposal to provide Kiev with €90 billion over the next two years.
The Commission has put forward two financing options. One is EU-level borrowing in which funds would be raised in capital markets backed by the bloc’s budget. This proposal requires unanimity, making it unlikely to pass.
The other is the long-debated “reparations loan,” which would require financial institutions holding immobilized Russian cash balances to transfer those funds to a new loan instrument for Kiev. Under the mechanism, Ukraine would only be expected to repay the loan if and when Moscow pays reparations. This option only requires a qualified majority, making it more likely to pass.
Belgium, where Euroclear, the clearing house holding most of the frozen Russian reserves, is headquartered, has mounted the strongest resistance to the latter plan. It has warned repeatedly that the scheme carries serious financial and legal risks and has demanded that EU partners share responsibility for any fallout.
Belgian Foreign Minister Maxime Prevot has called the “reparations loan” the “worst of all” available options, accusing the European Commission of pushing ahead without addressing Belgium’s concerns. Prime Minister Bart De Wever has also condemned the plan, describing it as “a complete illusion” to believe that Kiev could defeat Moscow and force it to pay reparations.
Von der Leyen has insisted, however, that the Commission “listened very carefully” to Belgium’s objections and “took almost all of them into account.”
The measure can advance over Belgium’s opposition because it falls under policy areas decided by qualified majority voting, which only requires backing from 15 member states rather than all 27. This prevents any single government from vetoing the initiative.
Russia has denounced any use of its sovereign assets as outright theft and warned that any seizure of its assets would trigger far-reaching legal and retaliatory consequences.
