Currently, the funds of the Central Bank of Russia are frozen as a result of EU sanctions, which require unanimous extension every six months. This complicates plans to provide Ukraine with long-term loans based on revenues from frozen Russian assets and allows for their return only on the condition of reparations being paid at the end of the war.
To implement the permanent freezing of assets, Germany and other EU countries are referring to Article 122 of the Treaty on the Functioning of the European Union, which allows decisions to be made by qualified majority in situations of serious economic difficulties. The draft legal act of the EU states that the conflict in Ukraine creates significant economic problems, and the transfer of funds from Russia must be urgently prevented to limit damage to the EU economy. The document is expected to be adopted before the upcoming European Union summit next week.
By that time, German Chancellor Friedrich Merz and other supporters of this initiative hope to convince Belgian Prime Minister Bart De Wever to support the plan to use Russian assets to finance Ukraine. Without Belgium's support, the implementation of this plan could become extremely difficult, as about 185 billion of the 210 billion euros of frozen Russian funds in the EU are managed by the Belgian company Euroclear.
However, the Belgian government is currently blocking the initiative, citing legal and financial risks, including potential retaliatory measures from Russia and possible expropriation of property belonging to European citizens and companies. Prime Minister De Wever previously set out a number of conditions for his support, including the distribution of risk responsibilities among all EU countries, the presence of financial guarantees from day one of implementation, liquidity protection, and the participation of all EU states where the frozen assets of the Central Bank of Russia are located. According to data from the European Commission, such assets are also located in France, Sweden, and Cyprus, in addition to Germany.
