Why would this scheme, as [German Chancellor] Merz say, ‘require budgetary guarantees from member states’? Doesn’t that mean that the tax-payers of those member state will eventually have to pay it? Who’s money is at risk when Russia wins its litigation? Who pays if something goes wrong?

This week, EU leaders will discuss a “reparation loan” to Ukraine, tied to Russia’s obligation to pay for the devastation President Vladimir Putin has wrought.
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Around €140bn would be lent to Kyiv and only repaid out of any reparations from Moscow. Without them, the EU as the lender would not get its money back. The EU would itself fund the loan by requiring Euroclear, the Belgian securities depository where most of Russia’s hard-currency reserves are blocked, to lend it cash built up as sanctioned Russian investments have matured. In return, Brussels would post what amounts to an IOU, backed by member states and later the next EU budget.

The plan suffers from contradictions. The proposal does not actually touch Russia’s assets, in spite of efforts to depict it as making Moscow pay. In fact, it explicitly rules out changing Russia’s legal claims. It is only an EU private financial institution (Euroclear) that will be strong-armed here — although other G7 countries are looking for ways to join in, and Brussels is hinting that more European banks with some Russian assets could be added.

But any new burden will fall only on European taxpayers. If Russia never pays reparations, the EU forgives Ukraine’s loan but still has to shoulder its own obligation incurred to fund it.

First, Belgium wants a full sharing of legal risk across EU member states. Mr De Wever warned that Belgium could face “giant lawsuits” given Euroclear’s role, and said any decision must ensure the burden is not borne by a single jurisdiction. “If you want to do this, we must do it together,” he said.

Second, Belgium is seeking explicit guarantees that, if funds were ever required to be returned—for example following litigation or a settlement—every member state would contribute to any repayments. The Prime Minister said consequences “must not end up entirely on Belgium” because the assets are booked through a Belgian-based financial market infrastructure.

Third, he called for parallel action by other jurisdictions where Russian state assets are immobilised. Belgium, he said, is aware of “large sums” located in other countries and wants coordinated steps so that implementation is not concentrated on one venue. “If we move on this, let us move together,” he added.

EU leaders have failed to back a €140bn loan to Kyiv using frozen Russian state assets following opposition from Belgium, dashing Ukraine’s hopes of accessing funds at the beginning of next year to stave off Russia’s aggression.

Belgium demanded cast-iron guarantees it would not suffer financially, fearing legal and financial repercussions should Russia retaliate against the plan. The assets are held at the Brussels-based Euroclear central securities depository.

Leaders of 26 EU countries — Hungary abstained — asked the European Commission to “present, as soon as possible, options for financial support based on an assessment of Ukraine’s financing needs” but did not formally back a loan based on Russia’s immobilised assets.

They agreed to return to the discussion at their next meeting in December.
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The failure to back the scheme could delay the commission’s goal of having financial support for Ukraine approved by the end of the year, and could complicate funding plans for Kyiv’s weapons purchases.

[Slovak Prime Minister] Robert Fico requests that “the European Commission propose other options for financing Ukraine in the next two years,” claiming that his proposal was accepted. “Whatever decision is made, I want us to be completely clear about this in Slovakia. The government I lead will never, I emphasize, never, sign any loan guarantee for Ukraine for military expenditures. We will also not allocate a single cent from our state budget for this purpose,” Fico clarified. According to him, Slovakia is ready to help Ukraine, but only humanitarianly.

The Prime Minister considers it a mistake that the initiative to use frozen Russian assets for a loan to Ukraine was made public before the European Commission provided answers to all possible stated risks. The plan “may encounter reality and end in failure at the next European Council in December, when a decision is to be made,” he added.