BRUSSELS (AP) 鈥� The European Union on Wednesday revealed details of its plan to use billions of euros in frozen Russian assets to fund Ukraine’s needs over the next two years, but Belgium rejected the scheme and insisted that it poses major financial and legal risks.
European Commission President Ursula von der Leyen said that the EU would cover two-thirds of Ukraine鈥檚 financial and military needs for 2026 and 2027, which the International Monetary Fund puts at 137 billion euros ($160 billion), by providing 90 billion euros ($105 billion).
She said that other international partners would be called on to cover the remaining third.
“Today we are sending a very strong message to the Ukrainian people. We are with them for the long haul,” said von der Leyen while rolling out the proposal which would use Russian money as collateral to fund Ukraine鈥檚 economy and war effort through a 鈥渞eparations loan.鈥�
Von der Leyen said that using the frozen assets would strengthen the Ukrainian position at peace negotiations with Russia and the U.S. but it would also send a message to Moscow that 鈥渢he prolongation of the war on their side comes with a high cost for them.鈥� She said that she had informed the Trump administration about the proposal.
Funding Ukraine
EU leaders have committed to fund Ukraine over the next two years, whatever the method. The EU has already poured in over 170 billion euros ($197 billion) since started in 2022.
Von der Leyen said that if the loan plan didn’t pass muster, the bloc could borrow the money on international markets in a scheme underpinned by its long-term budget. The problem here, though, is that it would require the approval of all 27 member countries, and Hungary has consistently blocked aid to Ukraine.
The biggest pot of ready funds available is through frozen Russian assets. Most of the money is held in Belgium 鈥� around 194 billion euros as of June 鈥� and outside the EU in Japan, with around $50 billion, and the U.S., U.K. and Canada with lesser amounts. A total of 210 billion euros worth ($245 billion) are held in Europe.
To address Belgian concerns, the commission’s complex proposal includes safeguards to protect EU nations from 鈥減ossible retaliation from Russia,” a prohibition of any release of the frozen assets, and a way to borrow money as the EU to “underpin a loan to Ukraine.鈥�
Too risky for Belgium
But Belgian Foreign Minister Maxime Pr茅vot said that his country considers 鈥渢he option of the reparations loan the worst of all, as it is risky. It has never been done before.鈥� Russia has described the scheme as 鈥渢heft.鈥�
Haltingly reading prepared remarks to reporters at NATO headquarters in Brussels, Pr茅vot urged the EU to borrow the money for Ukraine on international markets. 鈥淚t is a well-known, a robust and a well-established option with predictable parameters,鈥� he said.
鈥淭he reparation loans scheme entails consequential economic, financial and legal risks,鈥� he said, adding that the commission鈥檚 proposals do not address Belgium鈥檚 concerns. 鈥淚t is not acceptable to use the money and leave us alone facing the risks.鈥�
Belgium fears that the Brussels-based financial clearing house holding the frozen assets, Euroclear, could take legal action if Russia challenges any use of the funds or if the move harms its image and business interests.
Pr茅vot said Belgium feels that its concerns are not being heard by its EU partners.
鈥淲e are not seeking to antagonize our partners or Ukraine. We are simply seeking to avoid potential disastrous consequences for a member state that is being asked to show solidarity without being offered the same solidarity in return,鈥� he said.
EU partners say they’re listening
In essence, the 90 billion euros would not be seized from Russia as such, as Kyiv would refund it once Moscow pays significant for the massive destruction its war has caused. Should Moscow refuse, the assets would remain frozen.
鈥淲e have listened very carefully to Belgium鈥檚 concerns, and we have taken almost all of them into account in our proposal,鈥� Von der Leyen said. 鈥淲e will share the burden in a fair way, as it is the European way.鈥�
Other EU partners insist that they too understand Belgium’s worries.
鈥淲e take Belgium鈥檚 concerns seriously,鈥� German Foreign Minister Johann Wadephul told reporters. 鈥淭hey are justified, but the issue can be resolved. It can be resolved if we are prepared to take responsibility together.鈥�
His Dutch counterpart David van Weel underlined that 鈥渢hese funds are really, really important. We need to support the Ukrainian economy, otherwise they will have a very tough time next year.鈥�
鈥淲e understand the Belgian concerns, and we are willing to at least make sure that they are not alone in this,鈥� he said. Several EU countries have already agreed to provide financial guarantees should things go wrong.
Belgium has been earning some tax income on the assets, and the interest raised is also being used to fund a for Ukraine organized by the Group of Seven major world powers.
The European Central Bank is worried that the plan for an EU reparation loan could undermine confidence in the euro single currency on international markets. EU leaders are due to discuss the scheme and Ukraine’s economic and military needs at a summit in Brussels on Dec. 18.
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