A important look by Veerle Colaert and Paul Dermine on the wrangling over the Russian belongings held at Euroclear
Whereas Trump’s unique peace plan seems to be off the desk, his proposal to create an funding fund with Russian belongings at Euroclear continues to reverberate. Many European leaders are actually calling much more forcefully for these belongings to be transferred to Ukraine immediately, earlier than the Trump administration mobilises them with its personal agenda – and for its personal profit.
The urge to behave rapidly is comprehensible, however it’s at the least as vital to maintain a cool head. The USA clearly can’t seize the Russian belongings held at Euroclear with out the EU’s consent. And the explanations for the EU to depart these belongings untouched stay as compelling as ever.
Let’s recap. Since america is more and more withdrawing its assist for Ukraine’s conflict effort, Kyiv is primarily seeking to the European Union for monetary assist of its conflict efforts. However the budgets of the EU and most EU Member States are deeply strained. As an alternative of financing Ukraine instantly, the European Fee is due to this fact eying the €185 billion of frozen Russian Central Financial institution money balances.
The Fee would require Euroclear to lend €140 billion to the EU – curiosity free. The EU would in flip prolong a mortgage for a similar quantity to Ukraine, which Kyiv would solely must repay as soon as Russia ends its conflict of aggression and pays reparations. Europe’s “reparation mortgage” would thus represent an advance on the monetary reparations Ukraine is entitled to below worldwide legislation.
A treasure trove of €140 billion, seemingly free for the taking, seems onerous to withstand. However nothing comes totally free. Oblique prices will inevitably floor elsewhere.
Strong ensures for the dangers borne by Euroclear and Belgium are, in any occasion, indispensable. A mortgage of such magnitude entails an infinite focus danger for Euroclear. This could elevate eyebrows below European banking regulation. A statutory exemption might resolve the difficulty formally, however does nothing to get rid of the danger. Euroclear is a systemically vital establishment: the settlement of the majority of the buying and selling on EU capital markets is dependent upon its infrastructure. Its failure would convey Europe’s capital markets to a standstill.
The reparation mortgage additionally warrants scrutiny below worldwide legislation. Third state countermeasures towards Russia’s aggression which violate Russia’s state immunity are solely justifiable if they’re proportionate, momentary and reversible. Outright confiscation of frozen Russian belongings can be problematic. A mortgage construction can, nevertheless, be thought-about momentary and reversible – insofar as Euroclear can repay Russia on first demand as quickly as sanctions are lifted. And that’s the place issues get difficult.
It’s not unlikely that Euroclear would want to repay Russia earlier than Ukraine has paid again the reparation mortgage. Warfare reparations, even when a global legislation obligation, are not often paid in apply. The percentages of Ukraine ever reimbursing the mortgage are due to this fact slim. Additionally within the occasion that the EU sanctions towards Russia expire – they have to be renewed unanimously each six months – Euroclear should, upon first demand, pay again the Russian Central Financial institution, even when Ukraine has not repaid the mortgage.
Nicely-drafted monetary ensures from the Member States might arguably mitigate the danger for Euroclear and Belgium. The reparation mortgage plan, nevertheless, raises different issues – and extra prices – which are much less straightforward to resolve.
The plan would trigger severe collateral injury to Europe’s already ailing capital markets. Securities listed on a European trade can solely be held by means of a European central securities depository, and Euroclear is the biggest such establishment in Europe. If overseas powers acquire the impression that their reserves held at Euroclear might be redirected at will for European coverage aims, their willingness to spend money on European securities might properly erode. The results for Europe’s capital markets – and for the European firms and governments that rely on them to satisfy their long-term financing wants – can be incalculable. The reparation mortgage dangers to utterly undermine the European Fee’s personal current efforts to strengthen Europe’s capital markets.
A remaining, elusive danger is geopolitical in nature: Russia views the reparation mortgage as extremely provocative. Retaliatory measures towards the EU, and Belgium particularly, are an actual concern.
And what’s to be gained by taking these dangers? The almost definitely end result is that Ukraine is not going to repay the reparation mortgage and that EU taxpayers will finally foot the invoice. Why then assume the extra monetary, reputational, and geopolitical dangers of deploying Russia’s frozen belongings in any respect?
Counting on joint borrowings from the outset can be extra simple and safer. It could present Ukraine with predictable financing with out jeopardising Europe’s capital markets, its credibility, and its geopolitical stability. The Russian belongings held at Euroclear might subsequently – and hopefully quickly – be used as leverage in peace negotiations for functions that the proposed European reparation mortgage doesn’t serve: the rebuilding of Ukraine.
Veerle Colaert and Paul Dermine
English translation of an op-ed printed within the Belgian newspapers De Tijd (Dutch) and L’Echo (French) on 26 November 2025.
