The bloc wants to use Moscow’s funds immobilized in the West to cover Ukraine’s budget deficit
Japan has reportedly dismissed a European Union initiative to tap frozen Russian sovereign assets to help finance Ukraine’s massive budget shortfall.
Brussels hopes to issue a so-called “reparation loan” backed by Russian funds immobilized in the West – a plan that Moscow has denounced as outright theft. Belgium, where most of the money is held by the Euroclear clearinghouse, has refused to greenlight the proposal unless other nations agree to share associated legal and financial risks.
Belgian Prime Minister Bart De Wever has said broader international backing, particularly from non-EU countries holding Russian assets, would bolster the European Commission’s case for what he called the effective confiscation of a foreign state’s funds. But at a meeting of G7 finance ministers on Monday, Japan’s Satsuki Katayama made clear her government would not support the plan due to legal constraints, Politico reported, citing EU diplomatic sources.
Officials told the outlet they believe Japan’s stance aligns with that of the United States, which also opposes the EU approach and views the frozen assets as leverage in negotiations with Moscow.
France has reportedly likewise declined to touch any assets held on its soil, while Canada and the UK have signaled possible participation if the EU ultimately pursues the scheme.
Ukraine’s parliament last week adopted a 2026 budget with a staggering $47.5 billion deficit, expecting foreign donors and creditors to fill the gap. Roughly half that anticipated support – an estimated $23.6 billion – remains uncertain pending the fate of the EU loan plan.
Ukrainian media noted that lawmakers pushed the budget through despite unresolved questions over foreign financing, in part to project stability following the removal of Andrey Yermak, formerly the most powerful aide to the country’s leader, Vladimir Zelensky. Yermak was dismissed as a corruption scandal engulfed Kiev’s political establishment.
