LONDON
The Belgian prime minister warned that an EU plan to loan profits from frozen Russian assets to Ukraine would violate international law, according to media reports on Friday.
The European Commission's plan to use frozen Russian assets to support Ukraine is "fundamentally flawed," Bart De Wever said in a letter to Commission President Ursula von der Leyen.
According to the letter, seen by the Belga news agency, De Wever expressed Belgium's concerns to von der Leyen that they have not been properly addressed.
It came amid discussions around the EU's intention to mobilize frozen Russian state assets, most of which are held at Euroclear, to raise around €140 billion (over $161 billion) for a loan to Ukraine.
In the letter, De Wever also reiterated Belgium’s warnings that using the assets would violate "a fundamental principle of international law" and create instability in global financial markets.
He noted that countries with significant reserves in Europe might choose to withdraw them.
De Wever also touched on a "real risk" that the EU would ultimately be forced to repay the funds, which would require guarantees from member states.
In the letter, the Belgian prime minister warned of possible Russian retaliation, particularly targeting Euroclear and Belgium and stressed that frozen assets may play a role in future peace negotiations and that using them now could complicate those talks.
Separately, Brussels-based securities house Euroclear and the National Bank of Belgium also sent separate letters to the EU, cautioning its leaders about the legal and financial risks of the plan.
Euroclear CEO Valerie Urbain warned that using the frozen assets held in Brussels would set a precedent that markets outside the EU could interpret as "confiscation."
In a similar warning, Belgian National Bank governor Pierre Wunsch expressed his concern about "any funding option that could directly or indirectly affect Euroclear Bank's risk profile."