Brussels signals it could back a new, risk‑shared regime for managing about €190bn immobilised at Euroclear, as the Commission touts a ‘Reparations Loan’ and the G7’s $50bn plan gathers pace

Belgium has signalled a guarded willingness to change how the European Union handles Russian sovereign assets immobilised on its soil—but only if every member state shares the legal and financial exposure. The shift, articulated by Foreign Minister Maxime Prévot in recent remarks, dovetails with fresh proposals from Brussels to leverage the flow of profits generated by those assets for Ukraine, while keeping the principal untouched. It marks the first time in months that Belgium, home to the Euroclear clearing house where most of the cash is parked, has publicly entertained a risk‑sharing mechanism instead of insisting that the status quo is the only legally safe path.

At the centre of Europe’s debate is roughly €190 billion in Russian central bank holdings immobilised at Euroclear in Brussels. Since blocked coupons and maturities are reinvested in ultra‑safe instruments, the pool has thrown off substantial interest income over the past two years. Those ‘windfall’ profits—channelled under EU rules and buttressed by Belgian taxes—now underpin a broader financing architecture for Kyiv, including a Group of Seven plan to raise $50 billion, serviced by the future cash flows from the frozen assets. The question before EU capitals is how far to go beyond today’s system of capturing profits without touching the principal.

In a speech to the European Parliament on Wednesday, European Commission President Ursula von der Leyen floated a ‘Reparations Loan’ that would front‑load support for Ukraine while preserving the legal immunity of the Russian central bank’s reserves. Under the idea, member states would collectively bear the risk: the EU would use cash balances linked to the assets to service the loan now, and Kyiv would repay only once Russia delivers court‑ordered reparations in the future. For Belgium, which has long warned against outright confiscation, that burden‑sharing is the essential ingredient for any next step.

The justification is not merely legal theory. Belgian leaders have argued that a unilateral dash to seize sovereign assets could trigger retaliation, litigation and capital flight, undermining the euro’s appeal as a reserve currency and Europe’s credibility as a rule‑of‑law jurisdiction. Prime Minister Bart De Wever has repeatedly compared the immobilised stockpile to a goose that lays golden eggs: lucrative so long as it is left intact. Prévot’s latest signal suggests Brussels may accept some measured change—provided the costs and court risks do not land squarely on Belgium because Euroclear happens to be within its borders.

If there is a policy pivot, it rests on arithmetic as much as politics. In 2023, Euroclear disclosed about €4.4 billion in interest income linked to the sanctioned balances, rising to roughly €6.9 billion in 2024, as higher rates lifted returns on the reinvested cash. Belgium skimmed a portion via corporate tax and a specific EU ‘windfall contribution’, and Brussels committed much of those proceeds to Ukraine. This year, as rates eased, Euroclear said interest linked to the Russian balances was around €2.7 billion in the first half—still meaningful, but trending down—strengthening the case in some capitals for a more efficient, shared‑risk structure that can be scaled or refinanced as financial conditions change.

Even cautious officials concede that Europe has moved beyond the early‑war paralysis. What began as an emergency freeze has morphed into a quasi‑permanent ‘escrow’ whose earnings are pledged to Ukraine and whose principal is likely to remain blocked until a peace deal. Policymakers now frame the debate less as ‘whether’ to use the asset‑derived cash and more as ‘how’ to deploy it without breaking international law or destabilising markets. Belgium’s openness to EU‑wide indemnities—insurance, legal defence pooling, or budgetary backstops—suggests a pathway to do just that.

There are headwinds. Moscow‑based courts have begun awarding damages against Euroclear in cases brought by Russian investors whose securities have been trapped by sanctions. While such rulings have little enforceability in the EU without further steps, they illustrate the legal crossfire that any bolder Europe‑wide scheme must anticipate. Euroclear’s own risk disclosures note higher compliance costs, shifting cash balances, and reputational exposure, even as rating agencies say its core credit profile remains robust excluding the extraordinary revenue from sanctioned assets.

Inside the EU, the dividing line is less about sympathy for Ukraine and more about the jurisprudence: whether sovereign immunity can be pierced in wartime absent a Security Council mandate; whether profits derived from immobilised assets are distinct in law from the assets themselves; and how to shield private counterparties. The consensus to date has favoured a narrow route—collecting profits while preserving principal—paired with buffers to absorb possible losses from legal challenges. Belgium’s preference has been to turn tax receipts from Euroclear’s extraordinary income into grants for Ukraine, thereby keeping the complex liability chain at one remove from the Belgian state.

Von der Leyen’s ‘Reparations Loan’ is meant to broaden that narrow path without stepping into outright confiscation. By mutualising risk, the EU would effectively socialise any adverse court outcomes and protect any one host country from being the sole deep pocket. More ambitious variants are on think‑tank drawing boards—such as creating a stand‑alone, government‑owned ‘bad bank’ to warehouse and manage the sanctioned positions under ECB supervision. In each case, the legal fiction is the same: the principal is not seized, but the right to future streams of income is harnessed to finance Ukraine now.

Markets, for their part, care less about legal abstractions than about execution details: how the EU would book the cash flows; whether joint‑and‑several guarantees would bind; and how prudential regulators would treat exposures on clearing‑house balance sheets. Any new scheme will have to spell out who pays if yields sag or litigation freezes distributions. The half‑life of the plan matters as well: windfall profits will shrink if rates fall further, making today’s debt‑service assumptions more fragile over time. That argues for conservative leverage and a thick legal buffer—features Belgium says it wants to see before signing on.

Geopolitics also intrudes. Russia has mirrored Western measures by immobilising Western investors’ assets at home, a reminder that retaliation cuts both ways. Central banks in the Global South are watching closely: the more Europe blurs the line between sanctions and expropriation, the more incentive those institutions have to diversify reserves away from euros. That prospect—unknown in magnitude but real in direction—explains the cautious tone from Brussels, Paris and Berlin.

For Kyiv, the stakes are immediate. The G7’s $50 billion facility, anchored to the income stream from frozen sovereign assets, is designed to provide predictable financing through 2025–2026 for budget needs and reconstruction outlays. The EU’s own contribution—either through the Reparations Loan or another risk‑pooled instrument—could determine whether Ukraine enters next year with a credible fiscal bridge to a longer‑term settlement. Belgium’s message this week is that it is ready to help build that bridge, so long as the load is shared.

That may be the crux: Europe can move faster if the burden ceases to be Belgium’s alone. As legal briefs pile up and the profits curve flattens, a rule‑of‑law, risk‑pooled framework is emerging as the only politically durable option. If EU leaders can agree on the details—from indemnities and buffers to repayment waterfalls and governance—Brussels could turn a contested trove into a steady, transparent financing engine for Ukraine without sacrificing the legal principles it touts. It would also demonstrate that Europe can blend prudence with purpose at a moment when both are scarce.