Belgian Prime Minister Bart De Wever on Friday firmly rejected a proposal by German Chancellor Friedrich Merz to use frozen Russian central-bank assets to finance a large loan for Ukraine. “Taking Putin’s money and leaving the risks with us. That’s not going to happen, let me be very clear about that,” De Wever said in New York, reports 24brussels.
In an opinion piece published in the Financial Times, Merz suggested that these frozen assets could be leveraged to extend an interest-free loan of around 140 billion euros to Ukraine, which would be repaid only after Russia compensates Ukraine for war damage.
Approximately 170 billion euros in frozen assets are currently managed at Euroclear in Brussels. Presently, only the interest accrued from these blocked assets is being allocated to support Ukraine. However, Belgium has declined to utilize the principal, citing concerns over potential arbitration claims and the possibility of being compelled to return those funds in the future.
Using the frozen Russian funds for a loan to Ukraine would place a significant burden on Belgium’s public finances. The Belgian government is relying on a 25 percent corporate tax derived from Russia’s assets to help fulfill its commitment to increase defense spending to 2 percent of GDP. Should the EU back Merz’s initiative, De Wever would be forced to seek alternative revenue sources.
Dangerous Precedent
During discussions at the UN General Assembly, De Wever declared that such a move “will never happen.” He warned that seizing the central-bank assets of a foreign nation would create a hazardous precedent, not only for Belgium but also for the entire EU.
“If countries see that central bank money can disappear if European politicians see fit, they might decide to withdraw their reserves from the eurozone,” he asserted.
De Wever expressed his discontent with Merz’s public pronouncement, noting, “I told everyone: I am happy to speak. But let’s talk and come up with something, rather than sharing an opinion every day. I find that quite frustrating.”