Belgium says using frozen Russian assets could derail Ukraine peace deal

Country's support is crucial as assets are held by a Belgian financial institution

Belgium's Prime Minister Bart De Wever has said that historically during a war immobilised assets have never been used. AFP

Belgian Prime Minister Bart De Wever has warned the EU's plan to use frozen Russian state assets to fund Ukraine could endanger the chances for a potential peace deal to end the nearly four-year war.

“Hastily moving forward on the proposed reparations loan scheme would have, as a collateral damage, that we as EU are effectively preventing reaching an eventual peace deal,” Mr De Wever said in a letter to European Commission President Ursula von der Leyen.

Under a plan put forward by Ms von der Leyen, the frozen Russian central bank assets in Europe would be lent to Ukraine for Kyiv to use for defence and regular budget needs.

Belgium's support for the plan is crucial as the assets the EU hopes to use are held by Belgian financial institution Euroclear.

“The proposed reparations loan scheme is in my view fundamentally wrong,” Mr De Wever said, adding that historically, during a war, immobilised assets had never been put to use.

“Such assets have been the object of decisions during after-war settlements, usually in the context of war reparations by the losing party.”

EU leaders tried at a summit last month to agree on a plan to use €140 billion ($162 billion) in frozen Russian sovereign assets in Europe as a loan for Kyiv, but failed to secure Belgium's backing.

France's President Emmanuel Macron and Foreign Minister Jean-Noel Barrot said the Coalition of the Willing would work on finding a solution to using Russian frozen assets. AFP

The European Commission, the EU's executive body, hopes to address Belgium's concerns in a draft legal proposal which it will present this week on using the frozen sovereign assets to support Kyiv in 2026 and 2027, EU officials have said.

In the letter, Mr De Wever said Belgium had not seen “any proposed legal language by the commission”.

Apart from the €185 billion immobilised in Belgium, an estimated €25 billion of Russian assets is frozen in EU banks elsewhere, mainly in France and Luxembourg.

Belgium has previously said other countries that have Russian assets, including Canada, Japan, Britain and the US − members of the Group of Seven wealthy nations − should also be included in the scheme.

Earlier this week, French President Emmanuel Macron said after co-presiding a meeting of the so-called Coalition of the Willing group of countries supporting Ukraine that finding a way to use the frozen assets was priority.

Belgian securities depository Euroclear warned this week that the EU plan to use the frozen Russian assets for Ukraine could be viewed as “confiscation” and increase borrowing costs for member states

Euroclear said the proposal risks damaging Europe's investment climate and raising sovereign bond spreads.

On Thursday, Russian President Vladimir Putin said US President Donald Trump’s proposals for ending the war in Ukraine could be the basis for future agreements, but no final version exists yet.

“In general, we agree that this can form the basis for future agreements,” Mr Putin said during a news conference in Kyrgyzstan following the Collective Security Treaty Organisation summit. “But it would be impolite of me to talk about any final versions now. There are none.”

Mr Putin said that, according to his knowledge, the 28-point plan was rearranged into four parts by Ukraine and the US during talks in Geneva, and that can be the ground for talks. The US and Ukraine have said that the plan was re-drafted to contain 19 points.

“In general, we see that the American side takes into account our position, which was discussed before Anchorage and after Alaska,” Mr Putin said.

“We absolutely need to sit down somewhere and seriously discuss some specific things. We need to put everything into diplomatic language.”