Belgium Seeks EU Risk-Sharing in Proposed €140 Billion Ukraine Loan

Belgium has requested that European Union member states share the financial and legal risks associated with a proposed €140 billion loan to Ukraine, funded by frozen Russian assets.

Belgian Prime Minister Bart De Wever emphasized the need for "full mutualisation" of financial risks and airtight guarantees from all member states. He also suggested that Russian sovereign assets held in other European jurisdictions be included in the plan.

De Wever expressed concerns about potential Russian retaliation if Moscow demands the return of its assets and sanctions are lifted. He questioned who would provide the necessary guarantees, noting that the European Commission cannot compel member states to sign a guarantee.

During a recent EU summit, leaders failed to address De Wever's concerns, leading to a delay in the loan's approval. The summit concluded with a directive for the European Commission to present options to meet Ukraine's financial and military needs for 2026 and 2027.

European Commission President Ursula von der Leyen acknowledged the complexity of the issue, stating that while there is agreement on the concept of the reparations loan, further work is needed to determine the best way forward.

The proposed plan involves using cash balances generated by Russian assets held at Euroclear, a Brussels-based clearing house, to fund the loan. Ukraine would be required to repay the loan only after Russia agrees to compensate for war damages.

The European Central Bank President Christine Lagarde indicated that the plan is feasible, though she had previously criticized any approach resembling the confiscation of sovereign assets.

The EU aims to finalize a decision on the loan by the next summit in December, as Ukraine faces a budget shortfall amid mounting war-related costs and diminishing funding sources.