Why Belgium is making a stand on Kremlin’s frozen $370bn
EU tensions are threatening to explode as the Belgian PM stands alone in resisting German-led demands to raid frozen state assets to fight Putin’s forces.
Host to the European Union and NATO, Belgium was seen as the best behaved of small nations with an elite historically committed to a federal Europe.
This has all changed with Bart De Wever, the colourful prime minister who is variously described as a warrior against woke and a Eurosceptic in the Thatcherite tradition. It may well be that De Wever holds the fate of Ukraine in his hands too.
The 54-year-old is standing alone against European demands led by Germany to raid €210bn ($370bn) in frozen Russian state assets, mostly held in a Belgian financial clearing house. His intransigence could hand President Putin a victory and reinforce President Trump’s claims that Europe is not doing enough to fund the war.
A Flemish nationalist and one of Europe’s earliest populists, De Wever eschews the conventional business attire of other European leaders for natty round-collared shirts, well-cut waistcoats and eye-catching fabrics.
He came to power quietly in February, then became the EU’s most consequential leader after standing alone against a German-led raid on Russian assets in October. He has continued to say no.
International and European sanctions against Russia after Putin’s invasion of Ukraine in 2022 led to the “immobilisation” of more than €285bn in sovereign, central bank assets held in financial institutions in G7 countries, almost three quarters of which are locked in vaults across the EU.
The lion’s share, €185bn, is in Euroclear, a securities depository at the heart of Europe’s financial institutions that, like the EU, is based in Brussels. It is a huge sum, for which the Belgians as the host of Euroclear are legally responsible to safeguard. Windfall profits on frozen assets have been siphoned off to help Ukraine and now European governments are eyeing the “cash balances” to provide Kyiv with a “reparations loan” for 2026 and 2027.
The alternative is for European taxpayers to find €90bn, needed to meet a Ukrainian budget shortfall of €137bn, over the next two years. It seems an obvious answer for cash-strapped governments that Russia’s cash could be a lifesaver for Kyiv.
It is an epic struggle. Trump is eyeing the cash for American companies in Ukraine and Russia, with a plan to share two thirds of it with Putin in a joint investment vehicle. If the Europeans do not take it, he will. President Zelensky sees the future of the assets as one of the “most sensitive and the most difficult questions” of the peace talks. As for the Russians, it could be tantamount to an “act of war”.
Dmitry Medvedev, the deputy chairman of Russia’s security council, said: “If the crazy EU does, after all, try to steal Russian assets frozen in Belgium under the guise of a so-called reparations loan, Russia may well view this move as tantamount to a casus belli with all the relevant implications for Brussels and individual EU countries.”
The German chancellor Friedrich Merz will travel to Brussels on Friday (local time) in an effort to overcome Belgian opposition, and has scheduled a private dinner with De Weaver and Ursula von der Leyen, the head of the European Commission.
Yet Europe is unsure how to solve the De Wever problem. The dapper fitness enthusiast is a witty and formidable historian who first came to prominence as a frequent winner on the TV quiz The Smartest Man in the World.
His point is that the frozen assets legally belong to Russia. If the international sanctions freezing the cash end with a peace deal and Russia undefeated, his country would be on the hook for most of the money. Last week, he accused European leaders of “a complete lack of understanding” of an asset raid that could spook financial markets.
On Wednesday, the commission tabled unprecedented proposals to use emergency EU treaty powers to override Belgium, setting the scene for an epic political struggle.
The Times
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