### EU Moves to Permanently Freeze Russian Assets for Ukraine Loan Amid Legal and Financial Concerns
European Union governments have agreed to indefinitely freeze approximately €210 billion in Russian central bank assets held within the EU, primarily at the Belgian clearinghouse Euroclear. This decision, made using an emergency treaty clause, marks a shift from the previous requirement for unanimous six-month renewals and aims to provide a stable foundation for a proposed €90 billion loan to Ukraine. The loan is intended to cover two-thirds of Ukraine’s estimated €135.7 billion funding needs over the next two years, addressing critical military and economic shortfalls as international aid, particularly from the U.S., has dwindled. Ukrainian President Volodymyr Zelensky and European leaders argue that using these immobilized assets for Ukraine’s reconstruction is a fair form of reparations for Russia’s destruction, while Moscow has condemned the move as theft and initiated a lawsuit against Euroclear in a Russian court.
The EU’s plan involves leveraging the frozen assets—now largely matured into cash—to secure a loan for Ukraine, with the EU budget providing a guarantee. However, Belgium, where most of the assets are held, has expressed significant reservations, fearing legal repercussions and financial instability. Belgian Prime Minister Bart De Wever has demanded robust guarantees to protect Euroclear and the Belgian economy, which could face severe risks if forced to cover potential losses. Experts warn that concentrating such a large exposure in one institution violates EU banking regulations and could destabilize the financial system, especially if Russia retaliates by seizing Euroclear’s own assets in Russia, estimated at €16–17 billion.
Despite these concerns, the European Commission asserts that it has addressed Belgium’s worries by offering protections, including offsetting potential losses with Russian clearinghouse assets held in the EU and refusing to recognize rulings from Russian courts. The agreement among EU ambassadors reflects mounting pressure to support Ukraine amid stalled U.S. funding and Hungary and Slovakia’s opposition to alternative financing methods. As EU leaders prepare for a crucial summit to finalize the plan, the outcome hinges on balancing urgent Ukrainian needs with the legal and economic safeguards demanded by key stakeholders like Belgium.
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