Maria Petrova never thought her small savings account in a Brussels bank would connect her to one of Europe’s biggest political fights. The Ukrainian refugee, who fled Kyiv two years ago, watches the news each night hoping to hear that frozen Russian assets will finally help rebuild her homeland.
She’s not alone. Millions of Europeans are discovering that a heated argument between Germany and Belgium over frozen Russian assets could determine whether Ukraine gets the financial lifeline it desperately needs.
What started as a technical banking dispute has exploded into one of the most contentious debates in the European Union this year, with Germany pressuring Belgium to unlock billions in frozen Russian funds.
Germany Cranks Up the Pressure on Belgium
German Chancellor Friedrich Merz isn’t mincing words anymore. During a recent press conference with Slovenia’s Prime Minister, he made it crystal clear that Germany expects Belgium to get on board with using frozen Russian assets to support Ukraine’s war effort.
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“Using frozen Russian assets is an appropriate instrument to help end the war by increasing pressure on the Kremlin,” Merz declared, signaling that Berlin sees this as a crucial test of European unity.
Germany has thrown its full weight behind the European Commission’s ambitious plan to tap into Russian central bank reserves. The proposal could generate around 140 billion euros – that’s roughly $150 billion – to plug massive holes in Ukraine’s wartime budget.
But here’s the catch: this plan needs unanimous approval from EU member states. And Belgium, despite its small size, suddenly holds enormous leverage over the entire scheme.
Why Belgium Has Cold Feet About the Plan
Belgium isn’t opposing help for Ukraine – that’s not the issue here. The problem runs much deeper and touches the heart of global finance.
Most of those frozen Russian assets – about 235 billion euros worth – are sitting in Brussels at Euroclear, one of the world’s most important financial clearing houses. Belgian officials worry that seizing these assets could turn their country into a target for Russian retaliation.
“We’re essentially being asked to paint a bullseye on Belgium’s back,” explains a senior Belgian finance ministry official who requested anonymity. “Euroclear handles trillions in transactions. Any disruption could ripple through global markets.”
The Belgian government faces several specific concerns:
- Legal challenges that could tie up the assets in courts for years
- Potential Russian cyber attacks on Belgian financial infrastructure
- Risk of damaging Belgium’s reputation as a neutral financial hub
- Possible flight of international business from Brussels
Here’s what the numbers look like:
| Country | Frozen Russian Assets | Position on Usage |
|---|---|---|
| Belgium (via Euroclear) | €235 billion | Cautious |
| Germany | €4.2 billion | Strongly supportive |
| France | €24 billion | Supportive |
| United Kingdom | €18.5 billion | Supportive |
The Real-World Stakes Keep Getting Higher
While politicians debate, the human cost continues mounting. Ukraine burns through approximately 5 billion euros monthly just to keep basic government services running during wartime.
Ukrainian Finance Minister Sergii Marchenko recently warned that without this funding, “we’ll face impossible choices between paying teachers and buying ammunition.”
The frozen Russian assets represent more than numbers on a spreadsheet. For ordinary Ukrainians, this money could mean:
- Rebuilt hospitals and schools destroyed by Russian attacks
- Restored power grids keeping cities warm through winter
- Continued salary payments for government workers and soldiers
- Infrastructure repairs enabling refugees to return home
European voters are also watching closely. Recent polling shows 72% of Germans support using frozen Russian assets for Ukraine, while Belgian public opinion remains more divided at 58% support.
Behind-the-Scenes Negotiations Heat Up
Diplomatic sources reveal that Germany has been working the phones intensively, with Merz personally calling Belgian Prime Minister Alexander De Croo multiple times in recent weeks.
The European Commission is sweetening the deal for Belgium by proposing additional legal protections and insurance mechanisms. European Council President Charles Michel has suggested creating an EU-wide fund to cover any legal costs Belgium might face.
“Germany sees this as a defining moment for European leadership,” notes Dr. Sarah Wellington, a European affairs analyst at the Brussels Institute for Strategic Studies. “They’re not just pushing Belgium – they’re testing whether the EU can make tough decisions when it matters most.”
Belgium’s resistance stems partly from practical concerns about implementation. Unlike other countries that can simply redirect already-seized assets, Belgium would need to fundamentally alter how Euroclear operates.
What Happens Next Could Change Everything
The timeline is getting tighter. EU leaders face pressure to announce concrete progress at their next summit in March, especially as Ukraine’s financial situation becomes increasingly desperate.
If Belgium continues resisting, Germany has hinted at exploring alternative approaches, including bilateral agreements with other EU members to proceed without unanimous consent.
Financial markets are already pricing in uncertainty. The euro has fluctuated as traders weigh the implications of potential legal battles over frozen Russian assets.
“This isn’t just about Ukraine anymore,” explains Marcus Heinrich, a former German central banker. “It’s about whether Europe can act decisively in a crisis or get bogged down in bureaucratic paralysis.”
For refugees like Maria Petrova, the stakes couldn’t be more personal. She checks the news every morning, hoping to see that European leaders have found a way forward.
The pressure on Belgium will only intensify as winter approaches and Ukraine’s needs grow more urgent. Whether this small country will bend under German pressure or stand firm in its concerns may determine not just Ukraine’s financial future, but the EU’s ability to respond to global crises.
FAQs
What are frozen Russian assets and how much money is involved?
These are Russian government funds and central bank reserves that EU countries blocked after Russia invaded Ukraine. The total amount is approximately 280 billion euros across all EU nations.
Why is Belgium so important in this dispute?
Belgium hosts Euroclear, a financial clearing house that holds about 235 billion euros in frozen Russian assets – the vast majority of the total amount seized by Europe.
Is it legal for countries to use frozen assets this way?
The legal status remains unclear and contested. While some experts argue it’s justified under international law, others warn it could set dangerous precedents for property seizure.
How would the money actually reach Ukraine?
The European Commission proposes using proceeds from the frozen assets as collateral for large loans to Ukraine, rather than directly transferring the seized funds.
What does Russia think about this plan?
Russia has threatened retaliation against any countries that seize its assets, including potential cyber attacks and seizure of Western assets held in Russia.
When might this dispute be resolved?
EU leaders hope to reach agreement by their March summit, but Belgium’s continued resistance could delay any resolution for months.