Belgian resistance to EU plans to use Russian frozen assets for Ukraine's war effort

Belgium’s opposition to ambitious European Union plans for the use of frozen Russian assets is not a simple case of foot-dragging by a small member state. It sits at the intersection of international law, financial stability, national self-interest and the politics of peace negotiations over Ukraine. Understanding why Belgium is holding out helps to clarify what would be required to build a workable compromise that still delivers meaningful funding for Ukraine’s war effort and reconstruction.

What the European Union is trying to do

Since 2022 the European Union and her partners have immobilised roughly €210 billion of Russian state reserves and about €28 billion of private assets within their jurisdictions. The overwhelming share of those sovereign reserves in Europe is held not in Frankfurt or Paris but in Brussels, on the balance sheet of the Belgian central securities depository, Euroclear. Estimates put the Russian sovereign portfolio at Euroclear between about €170 and €190 billion.

The European Union has already taken one important decision: since 2024 she has channelled most of the “extraordinary profits” – interest income generated by the immobilised Russian reserves – into support for Ukraine, primarily through the European Peace Facility. This yields perhaps €2.5–3 billion a year for military and other support.

What is now on the table is more radical. The European Commission, encouraged by several large member states, wants to use the frozen assets as a basis for a much larger loan or “reparations facility” of up to €140 billion for Ukraine. The idea is that future interest income, and ultimately the Russian principal once reparations are agreed, would serve as collateral for long-term borrowing that can finance Ukrainian defence and reconstruction over the next decade.

This is the plan Belgium is resisting.

Why Belgium matters more than others

Belgium is pivotal for three reasons.

First, geography of custody. Because Euroclear is headquartered and regulated in Belgium, and holds the bulk of the Russian sovereign reserves, any legal move that changes the status of those assets will be executed in the Belgian jurisdiction. If Russia sues, or retaliates, Belgium and Euroclear will be on the front line.

Second, tax and domestic politics. Euroclear has earned billions in interest on the frozen Russian portfolio. In 2024 alone, the Belgian state collected about €1.7 billion in corporate tax on those profits, at a 25 per cent rate. Belgium has promised that all corporate tax revenues from Euroclear’s Russia-related windfall profits will be directed to Ukraine and estimates another €1 billion of such revenue in 2025. Brussels therefore insists she is already contributing substantially and visibly, and does not wish to be painted as obstructing Ukraine.

Third, financial centre status. Euroclear is one of the world’s major settlement and custody institutions, handling over €40 trillion in securities. Its business model depends upon global investors’ confidence that assets held in Brussels are protected by predictable rules and by sovereign immunity. Euroclear’s management has warned that aggressive confiscation or pledging of Russian reserves could undermine its credibility and might even oblige it to consider legal action against European institutions to protect its fiduciary duties.

These structural factors mean that what may look to others like a purely political decision in fact touches the core of Belgium’s economic model.

Belgium’s stated objections

Belgium’s new Prime Minister, Bart De Wever, has set out his concerns in unusually blunt terms in letters to Commission President Ursula von der Leyen and in public remarks. They can be grouped into four main themes.

International law and sovereign immunity

Belgium argues that using the principal of Russia’s state reserves – or even treating them as collateral for a loan whose clear purpose is to extract reparations – before any peace settlement is reached would be without precedent and legally hazardous.

Under customary international law and under many bilateral investment treaties, central bank assets enjoy a high degree of immunity from execution. Even if the European Union frames the measure as a temporary “reparations loan” rather than outright expropriation, the Belgian government and Euroclear fear that Russia will challenge the move before international courts, arbitral tribunals or the European Court of Human Rights. As custodian, Euroclear would be a prime target.

De Wever also links legality to peace diplomacy. He argues that if the European Union spends away Russia’s reserves in advance, she will remove a major lever for securing reparations as part of a final peace agreement and may give Moscow an incentive to stay out of negotiations altogether.

Financial stability and reputational risk

Belgium, echoing Euroclear’s management, warns that if the Union is seen to disregard sovereign immunity, non-Western reserve-holding states may reconsider holding large volumes of assets in euros or at European custodians. That could raise borrowing costs for European states and damage Brussels as a financial centre.

There is also the risk of Russian retaliation. Russian courts have already issued judgments against Euroclear for hundreds of millions of dollars over frozen assets, even if those awards are effectively unenforceable in the European Union. Moscow has also frozen assets of Western investors in Russia. Belgium fears that a bolder European step might provoke further seizures or legal harassment of European firms.

Distribution of risks and burdens

Because so much of the Russian portfolio is lodged in Belgium, the lion’s share of any litigation or counter-measures would concentrate there. Belgium is therefore insisting on legally binding guarantees that any financial costs arising from Russian retaliation, arbitration awards or investor lawsuits will be shared by all member states rather than falling on Belgian taxpayers or on Euroclear alone.

Belgium also wants a broader coalition. She argues that, if the European Union goes ahead, other G7 states that hold Russian reserves – notably the United States, United Kingdom, Canada and Japan – should participate in a similar scheme so that Brussels is not uniquely exposed.

Domestic politics and narrative

Finally, Brussels is sensitive to accusations within the European Union that she is “sitting” on Russian money. Belgian officials are keen to stress that all corporate tax revenue from Euroclear’s profits on Russian reserves is earmarked for Ukraine and that Belgium has provided nearly €1 billion of national support since 2022 in addition to this. From their perspective, the dispute is not about whether to help Ukraine, but about how to do so without jeopardising the rule of law and Belgium’s financial system.

The deeper motives behind the Belgian position

Beyond the official arguments, several underlying motives are visible.

Belgium is defending a national champion. Euroclear’s status as a global hub underpins skilled employment, tax revenue and Brussels’ wider position as an international capital. Any step that might lead large reserve-holders, particularly in Asia and the Gulf, to shift assets elsewhere will be resisted.

Secondly, Belgian political culture places particular weight on legal formalism and compromise. There is a genuine fear in Brussels that if the Union stretches existing rules on sovereign immunity to breaking point for Russia, the precedent might later be used in other, less morally clear situations. Belgian leaders may want a solution that, in their view, will stand up in court even if a hostile or more powerful state is on the receiving end.

Thirdly, Belgium is wary of being manoeuvred into a position where she alone is blamed if something goes wrong. If Russia’s counter-measures cause large losses, or if global investors react badly, the domestic political costs of having “waved through” a risky scheme designed in Berlin or the EU in Brussels may be severe.

None of this changes the fact that Ukraine faces enormous financing needs – roughly €136 billion is often cited for 2026–27 alone – or that Europe’s own security depends upon her survival. But it explains why Belgium demands more than political exhortation.

How Belgium’s resistance might be overcome

Overcoming Belgian resistance will require moving on several fronts at once: legal, financial, diplomatic and political. Some steps are already being discussed; others are more speculative.

Stronger legal architecture and clearer limits

One element would be to tighten the legal design of the scheme so that it is manifestly consistent with international law as interpreted by most European experts.

Possible ingredients include:

• Focusing initially on future profits rather than the principal, but allowing those profits to be pledged for a long-term reparations loan, thereby limiting the degree of interference with sovereign immunity.

  
  

• Explicitly subordinating the loan to a future peace settlement, in which the Russian Federation’s responsibility for reparations is affirmed by treaty or by a broad multilateral claims mechanism.

  
  

• Narrowly targeting only sovereign assets and excluding private Russian property, thereby reducing legal complexity and the risk of successful challenges by individual investors.

Providing Belgium with detailed, published legal opinions from respected international lawyers – including from outside the European Union – could help reassure domestic opinion that the move is defensible, even if Moscow disputes it.

Union-wide guarantees and burden-sharing

The heart of Belgian concern is asymmetry of risk. A convincing package of financial guarantees would therefore be central.

Options might include:

• An explicit decision that any adverse judgments or compensation costs arising from the reparations loan are a liability of the Union as a whole, backed by the EU budget, rather than of Belgium alone.

  
  

• A dedicated guarantee fund, financed by proportionate contributions from all member states, that would cover Euroclear or Belgium if losses materialise.

  
  

• If necessary, limited joint borrowing by the Union to pre-finance indemnities, thereby spreading the risk across the euro area rather than concentrating it in Brussels.

Such guarantees would not eliminate legal risk, but they would greatly reduce Belgium’s fear that she will be left to deal with the consequences alone.

Wider G7 and partner participation

Belgium has insisted that other major holders of Russian reserves – in particular the United States, United Kingdom, Canada and Japan – should participate in any reparations loan. A broader coalition would dilute the appearance of Europe acting in isolation and would mean that Russia’s response, legal and political, is aimed at a group rather than at a single custodian.

The G7 has already considered a $50 billion facility secured on expected profits from Russian assets. Aligning the European Union’s scheme with this broader effort, instead of running a purely intra-European project, would address a central Belgian demand.

Technical safeguards for Euroclear

Euroclear’s particular worries could also be addressed directly.

For instance:

• A requirement that a portion of the ongoing profits from the Russian portfolio be set aside in a reserve to cover future legal or operational costs.

  
  

• Clear recognition, in the legal texts, of Euroclear’s fiduciary duties and of its right to be indemnified by the Union should it face damages as a result of implementing EU decisions.

  
  

• Close coordination with Luxembourg’s Clearstream and with other major custodians to ensure that the operational mechanics of any scheme do not place Euroclear at a competitive disadvantage.

By turning Euroclear from a reluctant target into a protected implementing partner, Belgium’s government would find it easier to sell the arrangement domestically.

Political side-payments and narrative

In European politics, big bargains are rarely sealed without side-payments. Belgium’s concerns could be eased by a mixture of concrete and symbolic concessions.

These might include:

• Additional European funds earmarked for Belgian priorities, whether for energy transition, infrastructure or defence industrial projects connected to support for Ukraine.

  
  

• Strong public recognition that Belgian pressure has improved the legal quality and financial safety of the scheme, allowing Brussels to present herself as the guardian of the rule of law rather than as an obstacle.

More broadly, the Union could set the dispute within a narrative that reconciles legal caution with moral and strategic necessity: Russia must pay for the damage she has inflicted upon Ukraine, but she will be made to do so through procedures that respect the law and protect financial stability.

Last-resort options if unanimity fails

Officially, decisions on sanctions and common foreign policy require unanimity. Moving to qualified majority voting by use of so-called passerelle clauses has been discussed in general terms, but there is little appetite to use it on such a contentious and high-stakes issue.

In theory, a coalition of willing states could agree to advance funds to Ukraine using their own national resources, backed by Russian assets located on their territory. However given that the lion’s share of the reserves sits at Euroclear, such a scheme would either be small or would require relocating custody away from Belgium, which would be politically explosive and undermine the very financial stability the Union wants to protect.

In practice therefore, the only durable solution is to meet Belgium’s concerns sufficiently that she is willing to join a consensus.

Reconciling law, finance and solidarity

Belgium’s continuing resistance to the most ambitious proposals for using frozen Russian assets is not inexplicable obstruction. It reflects her unique position as the custodian of most of those assets, her dependence upon Euroclear’s international reputation and a sincere belief that international law and future peace negotiations must not be sacrificed to short-term political convenience.

Yet the stakes for Ukraine are existential. Without substantial new funding, Ukraine’s ability to defend herself, maintain basic public services and begin reconstruction will be severely constrained. For Europe, which increasingly accepts that she must carry more of the burden as United States support falters, mobilising Russian assets is both strategically attractive and morally compelling.

The way forward lies in turning Belgium from a reluctant hold-out into a demanding but constructive architect of a sounder scheme. That means comprehensive legal work, robust Union-wide guarantees, genuine burden-sharing with other G7 states, technical protection for Euroclear and a political bargain that allows Brussels to claim that she has defended both Ukraine and the integrity of the international financial order.

If that balance can be struck, the European Union can both uphold the principle that Russia must pay for her aggression and preserve the legal and financial foundations upon which European power ultimately rests.