Brussels has warned that if EU countries fail to agree on using frozen Russian assets to provide a €140 billion loan to Kyiv, they will have to find the money through bilateral grants or by issuing new joint debt.
In a letter to member states, seen by the Financial Times, European Commission President Ursula von der Leyen wrote that Ukraine will need €135.7 billion over the next two years to cover military and budgetary needs. She outlined three options for European capitals: national grants, a new issuance of EU-wide bonds or mobilizing frozen Russian assets.
The purpose of the letter is to increase pressure on governments to approve the previously proposed €140 billion “reparations loan.” Belgium is blocking the plan, fearing legal and financial consequences. Most EU countries are unwilling either to expand national financing or to back new joint debt.
Around €190 billion of Russian Central Bank assets are held at Euroclear, the Belgian clearing depository. Belgian authorities are demanding that other countries share the risks and account for frozen assets held in their own jurisdictions.
Under the draft “reparations loan,” Euroclear would invest maturing Russian securities into a special EU credit vehicle. The EU would then extend a “limited-recourse loan” to Ukraine—one Kyiv would be required to repay only if Moscow begins paying reparations.
To allay Brussels’ concerns and secure an agreement by year’s end, von der Leyen promised to consider “additional legal safeguards,” including the option of sharing the costs of international litigation among member states. At the same time, she acknowledged that “it is impossible to eliminate risks entirely,” and it remains unclear how long such risks would need to be shared. Despite the measures envisioned, “potential side effects cannot be ruled out, including consequences for financial markets if the reparations loan is mistakenly perceived as a confiscation” of Russian assets, she noted.
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Belgian Prime Minister Bart De Wever also said that Russian assets frozen in other European countries should be brought into play. In France, the government reports that around €19 billion is being held, mainly in commercial bank accounts.
Von der Leyen indicated she is prepared to consider extending the scheme to Russian sovereign assets held in commercial banks across other EU countries. This could raise the total to roughly €210 billion.
She added that the risk of the loan being perceived as a confiscation would diminish if countries outside the EU adopted similar measures. The United Kingdom and Canada have already said they are considering implementing such a mechanism.
The Commission also noted that a further €42 billion in Russian assets are frozen in Group of Seven countries. The United States is holding around $5 billion, and Japan about $33 billion, according to people familiar with the data.
Another country opposing the use of Russian assets is Luxembourg, which cites a bilateral investment treaty with Russia that creates a risk of legal claims. Belgium has a similar agreement. Von der Leyen recommended that countries “withdraw from the relevant bilateral investment treaties” to reduce these risks.