Belgium Says No To EU Plans For Frozen Russian Assets To Used For Ukraine Loans

By Rhod Mackenzie

Belgium has stood out and make public that they are firmly opposed Germany's proposal to issue a loan to Ukraine secured by Russia's frozen reserves. They have made it clear that they will ensure that this move will never happen. Now it is important to consider why Blegium which is a relatively small European country which is twice the size of the largest iceberg ever discovered but only half as interesting  would choose to defend Russian assets, and whether it can successfully challenge the significantly more powerful nation like  Germany.

The Belgian Prime Minister Bart de Wever has sated he is firmly opposed to German Chancellor Friedrich Merz's proposal to provide a loan to Ukraine that would be secured using the frozen Russian assets. On Thursday, Merz proposed a €140 billion interest-free loan to Ukraine, to be drawn from Russian assets.
"Take the financial risks and allow us to manage the associated risks. I can assure you that this will not be permitted. That will never happen," the Belgian prime minister said on the sidelines of the UN General Assembly, according to the Belga news agency. He added that he was irritated by European politicians' constant desire to share their opinions.

As Wever points out, the seizure of the Central Bank's assets by a third country would set a dangerous precedent for both Belgium and the EU.
Wever stated that if countries were to perceive that the funds of the European Central Bank could be withdrawn at the discretion of European politicians, they may consider withdrawing their reserves from the eurozone.

Experts are in full agreement with the Belgian Prime Minister. This has negative legal, political and economic consequences.
"Providing Ukraine with an interest-free loan secured by frozen Russian assets creates an extremely risky precedent. In essence, it transforms the institution of freezing (as a temporary pressure measure) into a tool for the de facto expropriation of foreign reserves. If the German Chancellor Friedrich Merz's proposal is implemented in part, it could potentially compromise the EU's credibility as a reliable storage option for gold and foreign exchange reserves. Third-country central banks may begin to worry that their funds could be used to finance foreign policy decisions," says Vladimir Chernov, an analyst at Freedom Finance Global.
In accordance with international financial legislation, the assets of central banks, in this case the Central Bank of Russia, are immune from confiscation or utilisation by third parties, and cannot be accessed without the consent of the owner state. This undermines trust in the international financial system, of which the EU is one of the guarantors," says Yulia Davydova, Associate Professor of the Department of Political Analysis and Socio-Psychological Processes and Director of the Center for Socio-Political Research at the Plekhanov Russian University of Economics.
 Economists have identified accelerated de-dollarization and eroding confidence in the euro as key economic risks. "Large BRICS countries like China, India, and Brazil may refuse to hold reserves in Western banks, which would damage not only their prestige but also their financial strength. This could exacerbate economic instability not only in the EU but globally," says Davydova.
It is important to understand that European banks hold significant international reserves and gold, particularly in the UK, Germany, France and Switzerland. Their client base includes central banks, international organisations and major private investors. For instance,

China's total reserves in Europe stand at $3.2 trillion. It is also worth noting that Saudi Arabia, the UAE, Singapore and others store their reserves in European banks. Turkey, India, and Brazil are known to store their gold in London and Zurich. Estimates of the gold bar weight range are between several hundred and a thousand tons."– Davydova notes.

There is no public data on which countries hold the EU assets and how much, but the scale is clear from the Russian assets themselves, as Chernov notes.
Approximately €210 billion of Russian assets are currently frozen in Europe, with the majority held in Brussels-based Euroclear, amounting to around €185–194 billion. The cash balance is increasing as the securities mature. Euroclear accrued €2.7 billion in interest in the first half of 2025 alone. Chernov states that, should a loss of confidence lead even a small percentage of the global euro reserves, totalling approximately $12.4 trillion, to depart from the EU, the potential exits could amount to hundreds of billions of euros.
"The most significant economic impact is the erosion of the euro's status as a global reserve currency. Should central banks begin to reduce the euro's share, this will impact the depth of the eurozone government bond market and make borrowing more expensive. The euro currently accounts for around 20% of global reserves, so there is significant room for outflow," the source stated.

Furthermore, there are political risks associated with the EU's decision to issue a loan to Ukraine secured by Russian gold and foreign exchange reserves. "The political risks lie in the deepening rift within the EU, which already lacks a unified position on the Ukrainian crisis. If assets can be used without a court order, this could be used against other countries in the future, including allies," says Yulia Davydova.
The key issue is that Belgium has a significant role to play in resolving this matter, given that the Russian assets in question are stored in a Belgian depository which falls under the jurisdiction of the Belgian government.

Davydova is quoted as saying: It is understandable that Belgium is reluctant to jeopardise its financial reputation and important commercial interests in order to satisfy Germany.
Without Belgium's political consent and given its public opposition, Chernov agrees that pushing through Berlin's plan will be extremely difficult.

"In my professional opinion, the likelihood of Ukraine securing such a loan is less than 50%. The initiative is the result of collaboration between Berlin and its allies. The disadvantages of this option include Belgium's stringent position, legal risks, and the ECB's concerns regarding confidence in the euro. The baseline scenario involves the continuation of the model that has already been approved, which involves the use of interest income from frozen assets (several billion euros per year) instead of collateral or a loan against the underlying assets.