Belgium rejects EU plan to use frozen Russian assets for Ukraine, saying the move is too risky
BRUSSELS (AP) — Belgium was rejected on Wednesday a plan Using frozen Russian assets to prop up Ukraine’s economy and war effort for the next two years, the plan carries major financial and legal risks, he says.
It is estimated that the total of Ukraine’s 2026 and 2027 budget and military needs will be around 130 billion euros (150 billion dollars). The European Union has committed to filling this gap. More than 170 billion euros ($197 billion) has already flowed since then. war It started in 2022.
The largest pot of ready funds available comes from frozen Russian assets. The bulk of the money is held in Belgium (about 194 billion euros as of June), around $50 billion in Japan outside the EU, and smaller amounts in the US, UK and Canada.
The European Commission, the EU’s executive body, was due to publicly announce details later Wednesday of a proposal to use Russian money as collateral to help Ukraine meet its critical needs through a “compensation loan.”
However, Belgian Foreign Minister Maxime Prévot said his country “considers the compensation loan option the worst because it is risky. It has never been done before.” Russia described this plan as “theft”.
Prévot, who haltingly read prepared statements to journalists at NATO headquarters in Brussels, called on the EU to borrow money from international markets for Ukraine. “This is a well-known, solid and well-established option with predictable parameters,” he said.
“The compensation loans plan involves economic, financial and legal risks,” he said, adding that the commission’s recommendations do not address Belgium’s concerns. “It is unacceptable to use the money and leave us with risks.”
Belgium fears that Euroclear, the Brussels-based financial clearing house that holds the frozen assets, could take legal action if Russia objects to any use of the funds or if the move harms its image and business interests.
Prévot said Belgium felt its concerns were not being heard by its EU partners.
“We are not trying to antagonize our partners or Ukraine. We are simply trying to avoid potentially disastrous consequences for a member state that is asked to show solidarity without being offered the same solidarity in return,” he said.
In fact, EU countries will lend Ukraine approximately 140 billion euros ($163 billion). The money will not be confiscated in this way, as Kiev will return the money if Russia pays a significant amount compensations For the great destruction caused by the war.
If Moscow refuses, the assets will be frozen.
Belgium’s EU partners insisted they understood.
“We take Belgium’s concerns seriously,” German Foreign Minister Johann Wadephul told reporters. “They are right, but the problem can be solved. It can be solved if we are ready to take responsibility together.”
“These funds are really important. We need to support the Ukrainian economy, otherwise they will have very difficult times next year,” said his Dutch counterpart David van Weel.
“We understand Belgium’s concerns and we are ready to at least make sure they are not alone in this,” he said. Many EU countries have already agreed to provide financial guarantees in case things go wrong.
Belgium generates some tax revenue on the assets, and the interest generated is also used to finance a financing. loan program Organized by the Group of Seven World Powers for Ukraine.
The European Central Bank is concerned that the EU compensation loan plan could undermine confidence in the euro single currency in international markets. EU leaders will discuss the plan and Ukraine’s economic and military needs at a summit in Brussels on December 18.
