Belgium Sets "Red Lines" for Using Russian Assets for Ukraine

Belgium has clarified its conditions for using frozen Russian assets to provide Ukraine with a €140 billion "reparation loan." According to Politico, Brussels' main demand is that all European Union member states agree to share all current and future risks associated with the program, the total amount of which could exceed €170 billion.

The Belgian government is concerned that in the event of possible legal and financial claims from Russia, the entire responsibility could fall on it, as a significant portion of the Russian assets is under the management of the Belgian financial institution Euroclear. For this reason, Brussels insists that the credit risk must be distributed among all EU members.

"Those guarantees cannot be limited to the €170 billion in cash that the European Commission is proposing to mobilize. The potential risk could be much higher than the nominal amount," Belgian Prime Minister Bart De Wever told EU leaders at an informal summit in Copenhagen last week.

A document presented to European leaders on October 1 details the "red lines" set by Belgium:

Not to support any measure that could be interpreted as a confiscation of assets.

Legally binding and strictly enforceable guarantees that European countries will share all current and future risks for both Euroclear and Belgium.

Agreement to provide immediate cash if Euroclear is required to return the assets to Russia, for example, after a peace agreement is signed.

The European Commission has proposed using €175 billion in cash, generated from investing frozen Russian state assets in Western government bonds, to finance a €140 billion loan to Ukraine. These funds are currently held at the European Central Bank (ECB) under Euroclear's management.