Brussels: A major legal and diplomatic dispute has erupted inside the European Union as Belgium publicly rejects an EU-backed plan to convert frozen Russian state assets into financial support for Ukraine. The disagreement highlights deep divisions over how far the bloc can act within international and EU law.

At the center of the debate are nearly €140 billion in Russian state assets—many of which are immobilized in Belgium’s financial infrastructure. The plan, advocated by German Chancellor Friedrich Merz, would repurpose these funds into a long-term “reparations loan” intended to support Kyiv’s reconstruction and defense costs.

“We keep on pleading for an alternative, namely the EU borrowing the amounts needed on the markets,” said Belgian Foreign Minister Maxime Prévot, underscoring Belgium’s insistence on market-based financing rather than asset seizure.

Legal Risks Highlighted by Belgium

Belgium’s objections are primarily legal in nature. Belgian officials warn that:

  • Seizing sovereign Russian assets may breach international protections on state property and bilateral investment treaties;
  • The EU could face protracted litigation in international courts and arbitration tribunals—legal experts warn of potential multi-decade claims;
  • The move could undermine diplomatic efforts and future peace negotiations by creating additional legal and political barriers;
  • Moscow could pursue retaliatory measures against European companies and financial institutions, escalating economic and legal fallout.

Russian officials have already voiced strong opposition. A senior Russian banker warned the EU could face “50 years of litigation” should the plan proceed—language that has added urgency to Brussels’ efforts to find a legally sustainable solution.

EU Institutions Seek a Compromise

The European Commission is drafting a text intended to break the impasse, but Belgian ministers say the latest proposals “do not address our concerns in a satisfactory manner.” Several EU member states, frustrated by what they view as Belgian obstruction, argue that rapid action is necessary to support Ukraine.

Legal analysts note the EU has several possible pathways: an ad hoc European instrument funded by debt issuance, conditional transfers tied to legal safeguards, or a novel liability framework that seeks to limit future claims. Each option carries trade-offs between speed, legal defensibility, and political acceptability.

What Comes Next?

The dispute is likely to continue at upcoming EU council sessions and within the Commission’s legal services. Observers say the outcome will shape not only how Europe finances support for Ukraine but also the bloc’s approach to using frozen sovereign assets as a geopolitical tool.

Bottom line: Belgium’s challenge frames the debate as one of legal prudence versus political expediency—raising the question whether unilateral asset repurposing is a sustainable long-term policy for the EU.