NextFin News - The Netherlands is leading a renewed push to persuade Belgium to back using Russia's frozen sovereign assets to fund Ukraine, offering to spread the legal and financial risk across the European Union after Brussels rejected the plan last December. Foreign ministers from the Netherlands, Poland, Spain and Sweden sent a joint letter on 27 August 2026 asking the European Commission to reopen the debate, arguing the €90 billion loan agreed for 2026-27 "will not be enough" as the war drags on.
The push puts Belgium back in the grinder. Roughly €185 billion of the approximately €210 billion in immobilised Russian central bank assets sits at Euroclear in Brussels — other counts put the Euroclear figure at €193 billion — leaving Belgium exposed to any Russian legal retaliation or counter-seizures. Belgian Prime Minister Bart De Wever, a Flemish nationalist, stood his ground in December, killing the Commission's plan for a "reparations loan" of up to €165 billion and forcing the bloc to borrow the €90 billion itself on the capital markets.
The Dutch proposal is deliberately modest. It does not ask Belgium to concede. Instead, it asks the Commission's technical experts to "explore, in close consultation with Member States, new options on how to use the immobilised assets for the benefit of Ukraine, which ensure that the risk rests with all EU Member States and where no Member State holds a disproportionate burden." The Hague is offering to buy Belgium's veto with an EU-wide guarantee.
The question this piece pursues is whether that is enough — and whether Europe is being forced toward the principal it has spent three years refusing to touch, not because the legal case has improved, but because the income from those assets is shrinking just as Ukraine's bills are growing.
The Mechanics: What Is Actually at Stake
Since Russia's invasion in February 2022, EU countries have immobilised roughly €210 billion of Russian central bank reserves. The bulk is held at Euroclear, the Brussels-based central securities depository — about €185 billion by one count, €193 billion by another. The assets are frozen, not confiscated: Russia still legally owns them, and the EU has repeatedly said they will remain immobilised until Moscow pays war reparations.
What Europe has been willing to spend is not the principal but the windfall. When the frozen securities generate interest, that income is taxed as a "windfall contribution" and channelled to the European Fund for Ukraine. To date, Euroclear has paid out approximately €6.6 billion through the windfall mechanism, with the most recent €1.4 billion tranche covering revenues from the second half of 2025.
Here is the catch: the windfall is shrinking. Euroclear earned €2.7 billion in interest from the frozen assets in the first half of 2025, down 21% from the same period in 2024. Full-year income had already fallen from €6.9 billion in 2024 to €4.4 billion in 2023, after €821 million in 2022. Euroclear's own 2025 results showed reported net profit of €1.1 billion, with the company explicitly retaining Russia-sanctions-related profits as a buffer against "current and future risks." The income stream that Europe has been treating as a substitute for touching the principal is decaying — and it is decaying precisely when Ukraine's financing gap is widening.
The four-country letter frames the issue in those terms. The ministers wrote that the Ukraine Support Loan "is making a substantial difference, but we are all aware it will not be enough," adding that "as each day passes, the cost of the war is rising as Russia's relentless attacks continue unabated." Poland's Radosław Sikorski put the trade-off bluntly:
Russia will not get this money back until it pays reparations to Ukraine, so it is better to use it to stop the aggression — that is, to defend Ukraine — rather than wait until the end of Russia's aggression to spend it on reconstruction.
Why Belgium Said No — and What the Dutch Are Offering
Belgium's objection was never moral. It was actuarial. In December, European leaders spent hours on the technical details of the reparations loan before abandoning it. The main difficulty, according to accounts of the summit, was providing Belgium with sufficient guarantees against financial and legal risks from potential Russian retaliation.
Those risks are concrete. A Moscow court has ordered Euroclear to pay damages of more than €200 billion in a case brought by Russia's central bank, and upheld that ruling on appeal in July 2026. Euroclear does not recognise the jurisdiction of the Russian court and has taken the matter to the Commercial Court in Brussels — but the mere existence of the claim illustrates the exposure. If the EU seizes the principal, Belgium fears it could be left alone to compensate Russia if courts later ruled the seizure unlawful, and that the precedent could damage its financial sector and the euro's credibility as a safe haven for sovereign reserves.
The Dutch letter is designed to neutralise exactly that fear. By asking the Commission to design options "where no Member State holds a disproportionate burden," The Hague is offering to convert Belgium's national exposure into a collective EU liability. A proposal floated in August by three former senior officials — Annegret Kramp-Karrenbauer, the former German defence minister; Nathalie Loiseau, the former French European affairs minister; and Daleep Singh, a former US deputy national security adviser — goes further: use a European decision to remove the money from Euroclear and transfer it to the EU, removing all liability from Belgium.
The Dutch have been signalling this approach for months. In December 2025, Dutch Foreign Minister David van Weel said:
We understand the Belgian concerns, and we are willing to at least make sure that they are not alone in this.
Germany's foreign minister, Johann Wadephul, made the same point: Belgium's fears were "justified" but resolvable "if we are prepared to take responsibility together."
So the negotiation has narrowed to a single question: will the other 26 member states sign a blank cheque for Belgium's legal exposure? That is a harder sell than it sounds. France and Italy backed Belgium in December, partly because French banks also hold Russian assets. Germany, which flipped to supporting asset use last year under Chancellor Friedrich Merz, is now "conspicuously silent," according to reporting on the current debate. And any final decision still requires unanimity — meaning Hungary's Viktor Orban, who claimed a diplomatic victory when the reparations loan was dropped, retains a veto.
The Second-Order Problem: The Windfall Trap
The deeper force driving this debate is not diplomacy; it is arithmetic. Europe has spent three years building a financing model for Ukraine that depends on not touching the principal. The €90 billion loan is backed by the EU budget. The windfall profits — €6.6 billion so far — are a bonus. The political comfort of that model is obvious: it avoids the legal Rubicon of confiscating sovereign reserves, a step with no modern precedent for an amount this large. Analysts at the time noted the move would be unprecedented — German state assets were not seized even after the Second World War.
But the model has a hidden dependency: it assumes the windfall keeps flowing. It is not. Revenue from the frozen assets has fallen by more than half in two years, from €6.9 billion in 2024 to €2.7 billion in the first half of 2025 alone. The decline reflects the mechanics of the freeze itself: maturing bonds are not reinvested, coupon payments accumulate as cash, and cash earns less than the securities did. The longer the assets stay frozen, the less income they produce. The income Europe is spending today is the residue of a portfolio that is slowly liquidating itself.
This is the second-order consequence that the December compromise ignored. Europe did not just defer the decision on the principal; it built a funding plan that grows weaker with every passing quarter. The €90 billion loan was supposed to suffice for 2026 and 2027. But with windfall revenues falling and non-EU donors such as Canada and Japan contributing less than promised, the four countries are effectively saying the math no longer holds.
The timing is not accidental. The letter asks for the issue to be discussed at the EU foreign ministers' meeting on 1-2 September in Ireland, and it lands ahead of the October European summit, where Ukraine support and the EU's next multiannual budget for 2028-2034 will both be on the agenda. If the long-term budget negotiations cannot produce enough money for Ukraine, the frozen assets return to the centre of the table by default. The Dutch are not just making a moral argument; they are positioning the assets as the fallback when every other source runs short.
The Counter-Thesis: Why the Legal Risk Is Real, Not Excuse-Making
The strongest case against the Dutch push is not that it is immoral, but that it is legally reckless — and that Belgium's caution is the responsible position. Seizing sovereign central bank reserves would cross a line that even the Second World War did not cross: German state assets were not confiscated by the Allies. The precedent would signal to China, Saudi Arabia, Brazil and other large reserve holders that euro-area assets are no longer immune from political seizure. The likely result is not just lawsuits; it is a slow fragmentation of the euro's role as a reserve currency, as sovereign wealth funds and central banks diversify away from Brussels-held assets.
Belgium is not inventing this risk. The more-than-€200 billion Russian court judgment against Euroclear is a live demonstration that retaliation is not theoretical. Euroclear has already had to hire and then switch private security for its CEO, Valérie Urbain, after Russian threats. A country whose entire financial-services model depends on being seen as a neutral, rules-based clearing hub has more to lose from a precedent of asset seizure than a coalition of donor states has to gain from a one-time windfall.
There is also a fairness problem. The four countries pushing hardest — the Netherlands, Poland, Sweden and now Spain, which had kept a low profile on the issue until now — are all above-average contributors to Ukraine from their own budgets. Their frustration is understandable. But a risk-sharing structure that socialises Belgium's exposure across 27 capitals is, in effect, a transfer from reluctant member states to enthusiastic ones. Hungary, Slovakia and the Czech Republic already extracted an exemption from the €90 billion loan in December; they are unlikely to volunteer for a new liability.
This counter-thesis is strong, but it rests on one assumption: that the alternative — continued deferral — is costless. It is not. If windfall revenues keep falling and the war continues, Europe will face the same choice in 2027 with a smaller income stream and a larger Ukrainian deficit. The legal risk of acting is real; so is the strategic risk of waiting until the assets have funded themselves into irrelevance.
What to Watch
Three signals will determine whether the Dutch gambit works:
- The October European Council. If the summit's multiannual budget talks fail to produce new Ukraine money, pressure to reopen the assets debate rises sharply. If the budget delivers, the issue can be deferred again.
- Germany's position. Berlin's silence is the swing factor. If Chancellor Merz returns to his pro-asset-use stance and offers Germany as a co-guarantor of Belgian exposure, the balance shifts toward deployment. Continued silence favours Belgium.
- Windfall revenue data. Euroclear's next tranche figures are the hard clock on this debate. If windfall profits fall below the pace needed to service Ukraine's needs, the argument that "the loan will not be enough" becomes empirically undeniable.
The falsifying signal for the view that Europe is being forced toward the principal: if windfall revenues stabilise or rise, and if the €90 billion loan plus the 2028-2034 budget fully covers Ukraine's 2026-27 gap, then the Dutch push is political posturing rather than financial necessity, and Belgium's veto holds without cost.
Conclusion: The Bill Comes Due
The Dutch proposal is a recognition that Europe's frozen-asset strategy has reached its income limit. For three years, the bloc has had it both ways: supporting Ukraine with Russian money while insisting it would never touch Russian money. That contradiction was sustainable only while the windfall lasted. It is no longer.
Short term, expect deadlock. Belgium has not changed its position, Germany is silent, and unanimity is required. The October summit is more likely to produce another technical working group than a decision. Medium term, the pressure builds: every quarter of falling windfall revenue narrows the gap between what Europe wants to do and what it can afford not to do. Long term, this is structural, not cyclical — the precedent of using sovereign reserves as collateral for a war of aggression will either be set, or Europe will have to find another way to pay for a conflict it has tied to its own credibility.
Scenarios: the base case is continued deferral, with a risk-sharing structure kept on the shelf as a fallback for 2027. The upside case for the Dutch is that Germany breaks its silence and the October budget shortfall forces a compromise that transfers the assets to the EU with collective liability. The downside case is escalation: a unilateral move that triggers the more-than-€200 billion Russian judgment and a wider flight of non-European reserves from euro-area custodians.
The Dutch are not trying to win an argument anymore; they are trying to price Belgium's fear. The question is whether the EU is willing to pay it before the assets have paid for themselves into silence.
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