Belgium shoots down EU offer to unblock Russian assets stalemate

BRUSSELS — Belgium on Monday pushed back against the European Commission’s proposed concessions to unblock a €210 billion loan to Ukraine funded by frozen Russian assets — dashing EU hopes of securing a deal in time for Thursday’s leaders’ summit.

With two days to go, the Commission is making a last push to convince EU member countries to back the loan so that billions of euros in Russian reserves held at the Euroclear bank in Brussels can be freed up to support Kyiv’s war-battered economy.

The EU’s 27 envoys will continue discussions on the scheme later Tuesday, as talks to end Russia’s almost four-year all-out war in Ukraine achieved some progress during a meeting of Western leaders and U.S. envoys in Berlin on Monday.

After days of negotiations on the assets, the Commission on Monday suggested legal changes to its proposal to secure political buy-in from Belgium.

It gave legal assurances that, under any scenario, Belgium could tap into as much as €210 billion if it faces legal claims or retaliation by Russia, according to the latest text seen by POLITICO. It also stated that no money should be given to Ukraine before EU countries provide financial guarantees covering at least 50 percent of the payout.

In a further concession, the Commission instructed all EU countries to end their bilateral investment treaties with Russia to ensure Belgium isn’t left alone to deal with retaliation from Moscow.

But Belgium said that the reassurances were not enough during a meeting of EU ambassadors on Monday evening, four EU diplomats told POLITICO.

“There will be no deal until EUCO [European Council],” said an EU diplomat who, like others quoted in this article, was granted anonymity to speak freely.

The Belgian government is holding out against using the Russian assets over fears that it will be on the hook to repay the full amount if Russia attempts to claw back the money. But in a further complication, four other countries — Italy, Malta, Bulgaria and Czechia — backed Belgium’s demand to explore alternative financing for Ukraine, such as joint debt.

While France continues to publicly back the frozen assets plan — the country’s Europe Minister Benjamin Haddad said in Brussels on Tuesday that Paris supports it — a person close to French President Emmanuel Macron said Paris was “neutral” on whether Europe should tap Moscow’s billions, or turn to Eurobonds to keep Ukraine from going bankrupt.

Supporters of the scheme — such as Germany — insist there is no real alternative to using the Russian assets. They say that joint debt isn’t feasible because it requires unanimity — meaning that Hungary’s Prime Minister Viktor Orbán, who has long been skeptical of support for Ukraine, could block the initiative.

“Let us not deceive ourselves. If we do not succeed in this, the European Union’s ability to act will be severely damaged for years, if not for a longer period,” German Chancellor Friedrich Merz said Monday.

But that isn’t convincing for all EU countries. Critics claim that Germany insists on using Russian assets because it is ideologically opposed to EU common debt.

“The narrative is that Hungary is against common debt [for Ukraine]. The reality is that the frugals are against common debt,” said an EU diplomat.

Clea Caulcutt contributed to this report from Paris.