European struggle for frozen Russian assets: Belgium against the rest of EU

Photo: AFP

At the end of 2024 and beginning of 2025, European politicians began actively discussing the use of frozen  Russian  assets to support Ukraine. Belgium blocking the decision to grant Ukraine a ‘reparation loan’ is at the centre of this diplomatic standoff. At the same time, the European Commission, headed by Ursula von der Leyen intensively promotes this decision.

Belgium: fear or self-interest?

The fact is that Belgium, specifically the international depository Euroclear, holds the lion's share of frozen Russian assets. This amounts to approximately 180 billion euros out of a total of 300 billion dollars worldwide. 

Officially, Belgium explains its reluctance to support asset confiscation by citing concerns about its reputation as an international financial centre.  Belgian Foreign Minister Maxime Prévot has repeatedly stated that such a move would ‘undermine confidence in the euro’ and jeopardise the interests of other countries that also hold their sovereign assets in Brussels.

However, Belgian Prime Minister Bart De Wever went further, using arguments more typical of Hungarian leader Viktor Orbán. In a letter to Ursula von der Leyen, De Wever argued that ‘the hasty adoption of the proposed reparations credit scheme will, as a side effect, lead to the EU effectively preventing the achievement of a peaceful agreement.’

This line of argument contains several logical inconsistencies. First, any so-called ‘peace negotiations’ at this stage are a farce, since the Kremlin is not prepared to make any real concessions and keeps demanding Ukraine’s capitulation. Second, after almost four years, the existence of frozen assets has in no way motivated Russia to end the war. Moreover, using these funds could, on the contrary, strengthen the Kremlin’s understanding of the actual toll of the war.

It is important to note that Belgian legislation imposes a 25% corporate tax on income generated from assets held within the country. This means that the same tax applies to frozen Russian assets. For 2024, the resulting tax revenue is estimated at approximately €1.7 billion.

According to Politico, Belgium is violating its obligations to publish information on how this money is being used. In comments to Politico, the Belgian government stated that all taxes received from Russian assets in Euroclear had been ‘reserved’ for Ukraine. However, it did not give a direct answer whether the entire amount had been transferred.

According to Politico, this raises suspicions among European politicians. Some of them believe that Belgium resists the plan to transfer Russian assets to Ukraine because it wants to use them to replenish its own budget.

The European Commission is Taking the Offensive

Despite Belgium’s opposition, the European Commission is taking the offensive. Ursula von der Leyen announced that the Commission is ready to release a legal text regarding the use of frozen assets.

Publishing a legal text before final agreement is generally an unusual step for the Commission, which typically releases documents only after informal consensus has been reached. In this case, releasing the text aims to intensify the debate around the decision, potentially increasing informational and political pressure on Belgium.

In other words, this move exposes contradictions within the European bureaucracy, which are usually carefully hidden behind informal communication until a decision has been tentatively agreed upon—a process we know only through occasional media leaks.

The European Commission does not want to fall behind schedule and, as planned, aims to agree on a “reparations credit” in December in order to fulfill its political commitments made earlier.

At the same time, the Commission is developing contingency financing options in case Belgium keeps blocking the reparations credit. Among the alternatives are joint borrowings by EU member states of up to €90 billion, although this option would create an additional fiscal burden for the participating countries.

What’s next?

There is an established international practice of ensuring aggressors are legally accountable. After Iraq’s invasion of Kuwait, a UN commission ensured the payment of $52.4 billion in reparations, which Iraq paid over more than 30 years. This proves that international compensation mechanisms are effective.

The situation around frozen Russian assets remains tense. On the one hand, there is clear political will among the majority of EU countries to use these funds to support Ukraine. On the other hand, legal concerns and commercial interests continue to slow the process.

At the same time, it is worth noting that Belgium’s move from constructive objections to blatant manipulations indicates that real arguments are running out. This is a positive signal, as manipulations are easier to counter than well-founded legal objections.

Ukraine needs to focus its efforts on direct cooperation with specific EU countries, especially those supporting the transfer of assets. The Baltic states, Poland, the Nordic countries, and Germany are in favor of a reparations credit. Coordination with them on a common position and a strategy to pressure Belgium is essential.

It is also important to work directly with Belgian politicians and the public. The key message must be simple: these funds do not belong to Belgium—they belong to the aggressor state, which must be held accountable. In reality, Belgium does not lose anything of its own; it is merely temporarily holding assets that must be directed toward Ukraine’s recovery.

There is also a need to use intensively European and global media to explain the rationale behind Ukraine’s demands.

Moreover, despite the change in administration in Washington, it is important to maintain dialogue with the United States regarding the frozen assets. The Americans also insist on using these funds, though they have their own interests. A joint US-EU stance could create irresistible pressure on Belgium.

Finally, Ukraine must demonstrate full transparency in the use of any funds from frozen assets. This would alleviate some concerns among European partners and strengthen trust. A transparent mechanism for fund allocation should be established, with regular reporting on their use.