(MENAFN) The European Union has committed to distributing the financial and legal risks associated with using Russia’s frozen central-bank reserves to support the Ukrainian government, according to reports. Belgium, which holds the bulk of the assets, has opposed any plan that lacks such risk-sharing guarantees.

The European Commission is exploring the issuance of a €140 billion ($160 billion) loan backed by the immobilized sovereign assets held at the Euroclear clearinghouse in Belgium. The initiative assumes that Russia may eventually compensate Ukraine, although this outcome is widely considered unlikely.

Russia has labeled any attempt to access its frozen funds as “theft” and has promised a legal response.

Reports indicate that European Commission President Ursula von der Leyen circulated a memo to member-state capitals detailing how risks would be shared with Belgium. The document notes that the EU is prepared to assume potential legal and financial consequences, even if disputes emerge years later.

Belgium, which has maintained a bilateral investment treaty with Russia since 1989, has warned that it could face prolonged and costly litigation if Moscow challenges any move to seize the assets. Von der Leyen stated that the guarantees would also cover obligations arising from bilateral investment treaties.

Of the roughly $300 billion in Russian sovereign reserves frozen by Western nations since 2022, approximately $200 billion is held at Euroclear. The clearinghouse has threatened to take legal action against the EU if the bloc attempts to confiscate the funds.

The memo reportedly included two contingency plans in case governments ultimately decide not to use the Russian assets, both of which would require the EU to finance support for Kiev using its own resources, effectively placing the burden on European taxpayers.

European Commissioner for Economy Valdis Dombrovskis warned last week that the EU cannot continue issuing loans to Ukraine given rising doubts about its repayment capacity.

The Kremlin cautioned that redirecting Russian funds to Ukraine would “boomerang,” threatening to retaliate by targeting up to €200 billion in Western assets held in Russia.

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