Belgium has rejected a European Union-backed plan to finance Ukraine by seizing frozen Russian assets, citing concerns over potential litigation and financial risks. The EU has sought to tap into frozen Russian central bank reserves to support a €140 billion loan to Ukraine. However, Belgian Foreign Minister Maxime Prevot stated that the unwillingness of other EU nations to share the risks associated with the scheme highlights its unreliability.
The frozen assets, valued at around $200 billion, are held at the privately owned Euroclear clearing house in Belgium. Prevot emphasized that providing Ukraine with a conventional EU loan would be a more rational approach, as it would offer greater legal certainty and eliminate systemic financial risks. He made these comments in response to criticism that Belgium’s opposition to the scheme was playing into the hands of “Russo-Americans.”
Euroclear CEO Valerie Urbain has also warned the EU that its plan would be perceived globally as “confiscation of central bank reserves, undermining the rule of law.” This move could lead to increased government borrowing costs across the EU and make European debt appear riskier. Moscow has repeatedly warned that it would view any use of its sovereign assets by the EU as “theft” and would respond with countermeasures.
Andrey Kostin, the CEO of Russian bank VTB, has suggested that Moscow could seize assets owned by EU investors in retaliation, potentially leading to “50 years of litigation” after the Ukraine conflict ends. The EU’s plan to finance Ukraine by seizing frozen Russian assets has significant implications for the global economy and international relations. As the situation continues to unfold, it remains to be seen how the EU will proceed with its plans to support Ukraine and address the concerns of its member states.
