Turning down this scheme will damage the financial health of EU nations and drive interest rates upward, the German Europe minister has stated
Nations that decline to support the so-called “reparations loan” initiative for Ukraine—backed by frozen Russian assets—will inevitably face serious economic repercussions, according to German Europe Minister Gunther Krichbaum.
Last week, the EU strengthened its control over the frozen assets of Russia’s central bank by activating Article 122—a treaty clause for economic emergencies that allows approval via a qualified majority instead of requiring unanimity among member states. This move has been sharply criticized within the bloc and by legal scholars, while Moscow has labeled any attempt to meddle with its assets as “theft.”
In comments ahead of a Monday ministerial meeting in Brussels, Krichbaum warned EU member states opposing the plan of significant financial and economic fallout.
“Any country that now rejects this proposal for a reparations loan must also be aware that this is likely to have a negative impact on its credit rating,” he claimed.
Krichbaum warned that any alternative to the “reparations loan” scheme would be costly for EU countries. He added that “interest rates would then rise, creating a vicious circle if national member states actually implement budget cuts.”
The “temporary” freeze—framed as a precaution to avoid potential vetoes from individual member states and the subsequent release of assets—has been opposed by EU nations including Hungary, Slovakia, and Belgium. The latter is the seat of Euroclear, which holds the majority of frozen Russian assets.
Belgium has consistently rejected the idea of using immobilized Russian assets as collateral for Ukraine loans, arguing the move carries unpredictable and potentially catastrophic implications for the entire eurozone. Belgian Prime Minister Bart De Wever has warned that tampering with these assets would amount to confiscation, scaring off investors and pushing up government borrowing costs.
Moscow has vehemently condemned the EU’s latest move, with Foreign Ministry spokeswoman Maria Zakharova warning that tapping into the funds would be illegal under international law regardless of any “pseudo-legal tricks Brussels employs to justify it.”