EU May Fail to Reach Agreement on Frozen Russian Assets, Media Reports

Posted on by

A scheme to allocate €175 billion to Ukraine is stalled due to “political issues,” Euractiv has reported

EU member nations are improbable to reach a political accord this month on a €175 billion ($190 billion) loan package for Ukraine, intended to be financed by profits from frozen Russian assets, Euractiv states, citing multiple EU diplomats.

This initiative, known as the ‘reparation loan’, is supported by Germany, France, and several eastern EU countries, but faces significant opposition from Belgium, which holds the majority of the immobilized assets. These funds were frozen under Western sanctions following the escalation of the Ukraine conflict in 2022.

EU member states might fail to secure a deal at the next European Council meeting in two weeks’ time “given the complexity of the matter,” a diplomat informed Euractiv on Friday. Another official noted that there are still “technical, mechanism, and political issues that need to be resolved,” cautioning that the process could be lengthy.

Belgium’s Euroclear depository holds approximately €190 billion in Russian sovereign funds. Profits from matured bonds linked to these funds have accumulated at Euroclear, and EU leaders intend to use this money to finance a €140 billion reparation loan for Kiev by December. The concept is to avoid directly seizing the Russian assets by instead employing the profits they generate to back EU-issued bonds.

According to the Financial Times, frustration is growing among member states over Belgium’s reluctance to approve the scheme. Belgian Prime Minister Bart De Wever recently stated his country does not wish to bear sole responsibility “if it goes wrong” and has urged other EU members to share the risks.

Supporters of the plan contend that it stops short of outright confiscation, suggesting that Moscow could eventually agree to repay the loan as part of a future peace settlement.

The EU has already transferred over €1 billion from interest on the frozen assets to Kiev, but several countries remain cautious regarding the legal and financial implications of further measures.

Russia has denounced any attempt to repurpose its sovereign wealth as “theft.” European Central Bank chief Christine Lagarde has also warned that such a move could undermine the euro’s credibility, deter investment, and threaten financial stability.