Belgian PM criticizes EU: Use of Russian assets for Ukraine may endanger peace

Belgian Prime Minister Bart De Wever said the European Union's plan to use frozen Russian state assets to finance Ukraine could jeopardise the chances of an eventual peace deal.

"Hasty progress on the proposed reparation loan scheme would have as collateral damage the fact that we, as the EU, are essentially hindering the achievement of an eventual peace agreement," he assessed in a letter to European Commission President Ursula von der Leyen, according to the Financial Times.

Union leaders tried to agree at a summit last month on a plan to use €140 billion of frozen Russian state assets in Europe as a loan to Kiev for 2026 and 2027, but failed to secure the backing of Belgium, which is the depositary.

According to Union officials, the Commission hopes to address Belgium's concerns in a draft regulation it will present next week.

According to TASS, the Financial Times pointed out that the Belgian prime minister is demanding that other member states offer legally binding guarantees worth 185 billion euros to compensate Euroclear, the securities depository, for possible losses.

Euroclear has also warned that the plan to back the loan to Ukraine with Russian assets could be seen as "confiscatory" and raise the cost of borrowing for member states. According to Euroclear, the proposal risks damaging the investment climate in Europe and increasing interest rate premiums on sovereign bonds.

In a resolution in November, the Russian parliament called for legal action against Belgium and Euroclear, the financial company that manages frozen Russian state assets worth some €210 billion. This is in the event of Russia's frozen assets being used.

At the same time, MEPs proposed that Russia should use the assets of non-residents from so-called hostile countries to compensate for its own losses in retaliation.

The debate over the use of frozen assets to fund Ukraine has been going on for months.

The key question still remains how the funds will be used. Some Union countries insist that it should be directed mainly towards the purchase of European weapons, while others are in favor of a freer use, including American supplies. Ukraine is pushing for as much autonomy as possible.

Slovakia and Hungary have announced that they will never support the financing of Ukraine from frozen Russian assets. They refer in particular to corruption cases involving people around President Volodymyr Zelensky.

(reuters, max)