When EU leaders arrived at the headquarters of the European Council on October 23, the mood was optimistic despite the weather. They were convinced that they were carrying a gift to Ukrainian President Volodymyr Zelensky that his country desperately needed: a mechanism for a huge loan backed by Russian assets. This financial injection, worth tens of billions of euros, should have been enough to keep the beleaguered country fighting Russian forces for at least the next two years.
The prime ministers and presidents were so convinced of their plan that instead of solving the basic question of “whether”, they were already arguing about the details of “how”. France, true to its tradition of supporting domestic industry, pushed for Kiev to use this money to buy weapons made in Europe. Finland and other Nordic countries, on the other hand, argued pragmatically – Zelensky should have a free hand and procure military material wherever he can find it, because speed, not the origin of the weapon, is decisive on the front.
However, when the negotiations broke down during the traditional lunch break, the optimism faded. It turned out that there was no agreement to tap Russian cash. Belgium, a country with a population of 12 million, opposed it and de facto blocked the entire process of the so-called “reparation loan”.
Belgium was represented by Prime Minister Bart De Wever. The 54-year-old Belgian prime minister is an eccentric figure at the EU table – known for his penchant for round-collared shirts, deep knowledge of Roman history and witty banter. This time, however, he wasn’t going to joke. His attitude was deadly serious and came as a shock to the rest of the European leaders.
De Wever coolly informed colleagues that the risk of Russian retaliation for expropriating their sovereign assets was too great to even consider without bulletproof guarantees. The scenario the Belgian government fears is a nightmare for the small country: Moscow will challenge the move in international courts. If the Kremlin were to succeed and win the legal case against Belgium or the bank Euroclear, which holds the assets, the Belgian state would be obliged to return the entire amount. Alone.
“This is absolutely crazy,” De Wever told European leaders. He refused to accept that the risk for a pan-European decision should be borne by a single country.
As the afternoon of the EU summit turned into the evening, De Wever did not back down an inch. He requested that the conclusions of the summit be rewritten. Repeatedly. His demand was clear: remove any mention of Moscow’s assets being used to send cash to Kiev, unless there were clear guarantees on the table that if something went wrong, everyone would pay, not just Brussels. In this case, he did not mean the EU by Brussels, but Belgium itself.
The Belgian blockade caught many EU leaders by surprise. If the leaders agreed to move quickly at the October summit, they would send a strong signal to Russian dictator Vladimir Putin about Ukraine’s long-term strength and Europe’s determination to defend itself. Instead, Zelenskyi and Europe were weakened by internal divisions.
What exactly is Euroclear and why is it so important?
To understand the Belgian panic, we need to look into the guts of the global financial system. Euroclear is not a regular commercial bank where people deposit their paychecks. It is one of the world’s largest securities depositories – a systemically key institution that is both a bank and not a bank in the classical sense of the word. It ensures that the shares and bonds are actually transferred from the seller to the buyer during the sale, and the money goes in the other direction as well.
Euroclear holds assets worth tens of trillions of euros. Any legal uncertainty or attack on its stability could cause a global financial heart attack similar to the crisis of 2008. For Belgium, Euroclear is a national jewel, but also a huge target. The so-called frozen Russian assets held by Euroclear are assets of the Russian Central Bank.
This is where the crux of the problem lies. “We are talking about a total of about 210 billion euros frozen in the EU,” explains Francois Veron, financial expert of the largest European economic think-tank, Bruegel, to Aktuality.sk. At the same time, he draws attention to frequent media errors in numbers. The media often talk about up to 270 billion frozen Russian assets. He questions that. “The 270 billion, I don’t know who came up with that number and how they calculated it. That includes the frozen assets of the Russians in the G7 countries, that is, for example in Japan, and it’s not just about Europe.”
The vast majority of these funds within the EU – namely 140 billion euros in cash and securities – are stuck in the Belgian Euroclear. The remaining 25 billion are scattered in private banks throughout the bloc, i.e. in other member countries. This means that Belgium holds in its hands (and on its servers) most of the “spoils of war” that both the Commission and Kyiv are interested in.
Mechanism: Not confiscation, but a loan for reparations
The media and politicians often speak simplistically about “seizing” Russian money or “unfreezing” it. However, the reality is legally much more complex, and this complexity is the reason why experts like Francois Veron try to tame passions and explain the nuances.
“The discussion is not about unfreezing Russian assets. This is a very common misunderstanding and almost no one talks about it,” Veron emphasizes. Direct confiscation of state property (sovereign assets) is extremely problematic in international law. If the EU were to simply take this money and send it to Ukraine’s account, it would violate the rules on which it stands and open a Pandora’s box that could lead to an outflow of capital from Europe. China or Saudi Arabia could say to themselves: “If they did it to the Russians, they will do it to us,” and they would withdraw their billions elsewhere.
The European Commission therefore came up with a creative but complicated solution. “The discussion is about something else. Instead of releasing this money, which is not even practically possible, Euroclear could provide a medium-term or long-term loan to the EU and in this way secure finance for Ukraine,” Veron explains.
In practice, it would work as a backup. The frozen Russian money would serve as collateral. The EU would borrow money on the markets or use the liquidity of Euroclear and send it to Ukraine. Repayment of this loan in the future would not fall on the shoulders of the Ukrainians, but of the Russians.
“It’s basically a loan for future reparations that should be paid by Russia,” says Veron. “This loan would not be financed from Russian frozen assets… However, this would not have an impact on frozen Russian assets. As you can see, this whole matter is quite complicated,” French economist and investor Veron explains to Aktuality.sk.
Ukraine would have to repay the loan only in one case: if Russia ended the conflict and voluntarily paid war reparations. However, this scenario is considered science fiction in diplomatic circles, or “highly improbable”, according to leaked Commission documents.
The April cliff and the plan for 165 billion
The pressure to find a solution is enormous and time is running out against Kyiv. According to documents obtained by POLITICO, Ukraine’s treasury is set to be completely empty in April 2026 (and, according to more pessimistic estimates, as early as April 2025).
The European Commission has therefore proposed a rescue package with a total value of up to 210 billion euros to keep Kyiv afloat. Its key part is the just mentioned “reparation loan” in the amount of 165 billion euros.
That plan is on the table. The legal proposal is to serve as the basis for immediate technical negotiations before EU leaders meet at a summit on December 18 to decide on the most sensitive parts of the initiative. However, everything depends on the approval of Belgium.
Belgian request
Belgian Foreign Minister Maxime Prévot was open and did not hide his disappointment after the presentation of the Commission’s plan: “The text presented by the Commission does not address our concerns in a satisfactory way. We have the frustrating feeling that we have not been heard.”
Belgium does not say “no” to help Ukraine out of principle. It says “no” to being the sole guarantor. The government in Brussels requests financial guarantees from all EU member states. To put it simply: If the Russians sue us and win, we all pay together, not just the Belgian taxpayers.
Francois Veron, although he is a supporter of the solution and the use of assets, admits that the Belgian position has its own logic, even if communication is binding. “Belgium’s argument is as follows – they fear that these transactions would endanger Euroclear and, ultimately, Belgium itself. And that it would take a risk. But not all Belgian arguments are understandable to me,” the expert states.
At the same time, he adds the essential thing that lawyers in Brussels are afraid of: “Of course, it also has huge risks of international lawsuits from Russia. But these cannot be estimated.” If Russia were to successfully challenge the violation of investment protection, the bill could be liquidating – both for Belgium itself and for the EU itself.
At the same time, European leaders are also aware that in the meantime, Ukraine would pay the most for this – if the war-torn country does not get at least a loan for the country’s own functioning as a matter of urgency.
The dispute between Belgium and the rest of the EU is to be resolved at the aforementioned planned summit, which will take place on December 18. Coincidentally, again in Belgium.
