Before Europe Spends Russia’s Money, It Should Say Who Repays

Belgian Prime Minister Bart De Wever wants EU governments to guarantee the entire proposed €140 billion loan against Russia’s frozen assets^[1] in writing, The Brussels Times^[2] reported on November 28. He is asking the right question: who pays if the money has to go back? Europe faces two bad precedents. Protect sovereign property regardless of what its owner does, and the protection can shelter an aggressor from the bill. Take the property, and other governments have reason to ask how secure their own reserves are. Sovereignty over assets is not absolute when you hold them in someone else’s jurisdiction. I see no clean answer, but a clever loan cannot relieve policymakers of choosing who bears the cost.

On February 28, 2022, the EU prohibited transactions connected with managing Russia’s central bank reserves.^[3] That stopped Russia from using the money; it did not transfer ownership to Ukraine. The European Parliamentary Research Service explains the mechanics:^[4] Euroclear, a securities depository registered in Belgium, manages most of the EU-held assets. Most began as bonds. As they matured, the blocked repayments became cash. At Euroclear, that cash goes into investments with Belgium’s central bank. The Russian claim survives, backed by cash that earns income for the depository. A loan that spends the cash while preserving the claim leaves someone responsible for replacing it.

Belgium hosts an estimated €180 billion, about 62% of the €289.5 billion counted in the parliamentary service’s September 2025 compilation,^[4] assembled from sources of different dates. The United States holds €4.3 billion, about 1.5%. A decision shared among allies would act on accounts concentrated at a custodian subject to Belgian and EU law. Sharing the decision does not automatically share the obligation to return the funds. Belgium’s concern about guarantees deserves an answer in money and enforceable commitments, not a lecture about solidarity.

Immobilized Russian sovereign assets by location, € billions, September 2025

The strongest argument for confiscation starts with the cost of refusing it. Ukraine’s government, the World Bank, the European Commission^[5] and the United Nations estimated reconstruction and recovery needs at $524 billion, or €506 billion, over the next decade, based on damage through December 31, 2024. The immobilized reserves would cover only part of that bill. If the rules protect the aggressor, what is the system for? Protecting the accounts indefinitely is a choice about who pays, not an escape from politics. The parliamentary briefing sets out the proponents’ case for collective countermeasures:^[4] measures that would otherwise be unlawful can, they argue, induce a state that has violated fundamental rules of international law to stop or pay compensation. On that account, using the reserves would defend the legal order rather than discard it.

Opponents invoke sovereign immunity and the requirement that countermeasures be temporary and reversible;^[4] they also dispute the right of states other than the injured state to take them. Money spent on reconstruction cannot simply be put back in the account by reversing a transaction. Someone would have to replace it. When you set a precedent, you cannot control who uses it later. Confiscation justified against Russia could become a tool of coercion in another dispute. I accept the case for making Russia pay, but that does not settle how widely another government could stretch the rule. The tension is trust versus accountability.

Reserve managers can seek backups without abandoning the euro. The European Central Bank’s June 2025 review^[6] put the euro’s share of global official foreign-exchange reserves at about 20% at the end of 2024, broadly unchanged since the full-scale invasion. The same review found that central banks bought more than 1,000 metric tons of gold in 2024, double the previous decade’s annual average; two-fifths of surveyed central banks invested in gold as protection against geopolitical risk. Official holdings of euro-area government debt by countries not geopolitically aligned with the West fell about 5% from pre-invasion levels, a decline the ECB described as contained. Those observations do not isolate the effect of sanctions. If I were a finance minister of a midsize country with complicated relations with the West, I would want alternatives after watching this dispute. Losing access to reserves is one risk. Losing ownership would give me another reason to keep a backup.

The G7 already has a loan program backed by earnings rather than principal. Its agreement on October 25, 2024, arranged roughly $50 billion in loans to Ukraine,^[7] to be serviced and repaid from future extraordinary revenues on immobilized assets. The parliamentary briefing puts that at about €45 billion and explains the EU’s legal distinction:^[4] the depositories’ extraordinary revenues would not be owed to Russia’s central bank even after the freeze ended, so they are not sovereign assets. Euroclear reported interest-related income from all sanctioned Russian assets of about €5.1 billion in the first nine months of 2024,^[8] against €3.9 billion in the same period of 2025,^[9] attributing the decline to rate cuts. That broader income measure is not a transfer to Ukraine. Euroclear separately provisioned €2.6 billion for the EU’s windfall contribution over those nine months of 2025; the EU’s loan mechanism channels eligible extraordinary revenues to Ukraine to repay the G7 loans. Borrowing against future receipts brings spending forward. It does not guarantee the interest rates that produce those receipts.

Euroclear's interest-related income from sanctioned Russian assets, 2023 to 2025

European Commission President Ursula von der Leyen makes the case for sparing European taxpayers. In a speech on September 10, 2025,^[10] she said “it should not only be European taxpayers who bear the brunt of this.” Her proposed reparations loan would use the associated cash balances while leaving the assets themselves untouched; Ukraine would repay only once Russia paid reparations. She also said “the risk will have to be carried collectively.” That risk has a timetable. The immobilization depends on unanimous EU sanctions renewal every six months.^[4] On June 30, 2025, the Council extended the underlying sanctions decision through January 31, 2026.^[11] If a government blocks renewal and Euroclear must return the funds before Russia pays reparations, the member-state guarantees Belgium seeks would have to replace the missing cash. That would put the bill on European budgets while Ukraine itself was not yet obliged to repay. Avoiding an immediate taxpayer payment is different from avoiding a taxpayer liability.

Peace negotiations could change the repayment assumptions, too. On November 21, France 24^[12] published a U.S.-backed draft reviewed by AFP that would put $100 billion of the frozen Russian assets into U.S.-led reconstruction and investment in Ukraine, with the United States receiving 50% of the profits. Europe would add another $100 billion, and the remaining frozen Russian funds would go into a separate U.S.-Russian investment vehicle. On November 24, RBC-Ukraine,^[13] citing Bloomberg, reported that the $100 billion allocation had been removed from a revised draft. These were negotiating positions, not a completed settlement. A loan that waits for Russian reparations must specify what happens if negotiators agree on a different use for the reserves.

Before Europe spends against that promise, I want its leaders to say whose claim survives, under what conditions the money must be returned and which budgets would replace it. A promise of collective responsibility needs an identified payer. If they choose to preserve the principal instead, they should say how they will finance the support they judge necessary for Ukraine. Put the guarantee in writing. Put the possible bill in the budget.