The plan to utilize Frozen Russian Assets is causing European unity to crack once again. The European Commission’s hopes of formally approving the scheme to loan Ukraine funds backed by these assets next week are now under serious threat. Belgium, which had long been defending its position alone regarding the risks posed to Euroclear, has unexpectedly received powerful support. Italy, Bulgaria, and Malta have joined Belgium’s demands to revise the terms of the deal.
The Ultimatum of the ‘Coalition of the Cautious’
In a joint statement, the coalition has effectively tripped up the European Commission just ahead of a crucial summit. The core conflict is straightforward: the EU plans to issue a loan to Ukraine (as part of G7 agreements) that would be serviced by the profits generated from frozen Russian assets—the very €210 billion held mostly within the Belgian central securities depository, Euroclear.
However, Belgium and its new allies are saying: “Stop. This is too risky.” They are demanding that the European Commission develop alternative options that carry “significantly fewer legal and financial risks.” Translating this from diplomatic language: the ‘Coalition of the Cautious’ fears the current scheme is legally vulnerable. If Russia starts winning court cases, these countries’ national budgets, rather than the collective EU fund, would be forced to foot the bill.
The Coalition’s Stance on Frozen Russian Assets
The countries insist that any decision of this magnitude must be taken at the level of EU leaders, rather than “automatically flowing” from technical regulations.
Freeze: Yes; Loan: No
An interesting political paradox arises here. The ‘Coalition of the Cautious’ strongly supports the idea of an indefinite block on Russian assets. Previously, sanctions were renewed every six months, which gave Hungarian Prime Minister Viktor Orbán leverage for blackmail—a threatened veto could dismantle the entire structure. Belgium, Italy, Bulgaria, and Malta agree that the block must be permanent (or indefinite) to remove this leverage from Budapest. However, they are fundamentally opposed to a lending mechanism backed by these assets that would expose their own banks to risk.
Why is this démarche happening now, just a week before the summit?
☛ Belgium: The country does not want to be held solely responsible if Euroclear collapses. The Prime Minister has been warning about this for months. Belgium has now successfully internationalized its fear: this is no longer a problem for the “cowardly Belgians,” but the joint stance of a group of nations.
☛ Italy: Rome is traditionally cautious in financial wars. Italian banks (UniCredit, in particular) still maintain interests in Russia, though they are in the process of winding down operations (expected by mid-2026). Italy fears a harsh response from Moscow.
☛ Malta: The Maltese Herald notes that “there may be undisclosed hidden interests in Malta’s opposition to the reparations loan.” While Valletta supports Ukraine politically, it has always abstained from providing military aid.
☛ Bulgaria: The country’s Ministry of Foreign Affairs adopted the position of a strict legalist, stating that “any decision must be fully compliant with EU law and international law.”
A Gift for Trump
This news is music to Washington’s ears. It confirms Donald Trump’s narrative that the EU is an unwieldy structure incapable of agreeing even among its own members. While Europe debates legal subtleties, time is running out. Should the December 18 summit fail, the question of financing Ukraine will once again hang in the balance. This gives Trump even more room to maneuver his own “grand deal,” where terms are dictated exclusively by the White House.
The December 12 Decision
It is worth recalling that on December 12, 2025, EU ambassadors had already reached a preliminary agreement to freeze Russian assets indefinitely. This concerns blocking €210 billion until two conditions are met: the cessation of the war and the payment of reparations by Russia. The EU used Article 122 of the Treaty on the Functioning of the EU (concerning emergency situations) as the legal basis, which allows decisions to be adopted by a qualified majority, bypassing potential vetoes.
“We are sending a clear signal to Russia that as long as this brutal war of aggression continues, Russia’s costs will continue to rise. This is a powerful signal to Ukraine: we want to ensure that our brave neighbor becomes even stronger on the battlefield and at the negotiating table,” stated European Commission President Ursula von der Leyen.
Moscow’s Reaction and Protection ‘Loopholes’
However, the optimism of the EU leadership is shattered by the legal realities that are frightening the ‘Coalition of the Cautious.’ The Central Bank of Russia has already filed a lawsuit against Euroclear in the Moscow Arbitration Court. The CBR intends to seek the seizure of Euroclear assets not only in Russia but also in third countries (jurisdictions friendly to Moscow).
The European Union attempted to prepare for this scenario. The 14th sanctions package (June 2024) introduced the groundbreaking Article 11a, which allows European companies to file counter-suits in EU courts to offset damages resulting from Russian court rulings. This renders the Russian rulings legally void within the European Union.
But the main problem remains unresolved: Article 11a does not protect Euroclear assets in non-EU countries (such as the UAE, China, or Hong Kong). It is precisely this risk of losing global assets that is compelling Italy and Belgium to block Brussels’ “elegant solution.”
