Top officials from the EU Commission and the Belgian government will meet on Friday to try to break the deadlock over using frozen Russian assets to finance a €140 billion ($162 billion) reparation loan for Ukraine, two EU officials told Politico.
On Oct. 24, EU leaders failed to approve the loan after Belgium refused to support the plan, citing fears of legal and financial retaliation by Moscow, because most of the funds in question are held by the Brussels-based clearing house Euroclear.
Belgian Prime Minister Bart De Wever worries that his government could be forced to repay Moscow if Russian lawyers challenge the move. He asked EU leaders in October for stronger protections against legal and financial risks, Politico wrote.
The plan was intended to provide Ukraine with predictable funding as the war continues, especially after the US halted direct financial support to Kyiv’s budget.
“The longer we now run delays, the more challenging it will become. It may open questions on some possible bridging solutions,” Economy EU Commissioner Valdis Dombrovskis told reporters in the Bulgarian capital of Sofia on Tuesday, the media outlet wrote.
Every six months, the EU must unanimously renew its sanctions on Russia. This means that any Kremlin-friendly country, like Hungary or Slovakia, could potentially unfreeze Russian assets and compel Euroclear to return all sanctioned funds to Moscow.
Belgium wants guarantees before supporting the plan. De Wever seeks protection against any Hungarian or other veto that could unfreeze Russian assets. He also wants other EU countries to share the risk and ensure immediate payouts if Russia claims its money back, Politico wrote.
Belgium is considering using the EU’s current seven-year budget to guarantee the loan rather than relying on national governments. The EU Commission says it could lend to countries that struggle to provide funds quickly, but that would add to national debt.
The Commission will present Belgium with alternative funding options that involve EU borrowing. According to Politico, officials hope De Wever will agree once he sees there are no viable alternatives.
The International Monetary Fund (IMF) on Friday urged caution on the EU’s planned “reparations loan” for Ukraine, warning of “any implications for the international monetary system.”
EU officials warned that Belgium’s refusal to support a multibillion-euro EU loan to Ukraine could prompt the IMF to block financial aid for Kyiv, triggering a cascading loss of confidence in the war-torn country’s economic stability, Politico previously wrote.
Ukraineʼs Prime Minister Yulia Svyrydenko denied the claim and told reporters that the IMF’s potential new program would proceed independently of the EU’s planned reparations loan, Interfax Ukraine reported on Monday.
“There is no reason to panic,” Svyrydenko said. “We are coordinating all financing mechanisms, and our partners have confirmed their support for Ukraine.”
Previously, Finance Minister Serhiy Marchenko told Ukraine’s lawmakers that for 2026, the identified need for external financing currently amounts to $18.1 billion, based on an estimated average US dollar annual exchange rate of Hr. 45.7.
The estimate differs from the central bank’s figure of an “unidentified” gap of $12.7 billion for Ukraine’s needs in 2026. Ukraine’s central bank does not publish its forecast on the exchange rate.
Ukraine spends around 60% of its budget on the war effort against Russia and depends heavily on Western allies to cover pensions, public sector wages, and humanitarian programs.