Could release of frozen Russian assets come at Belgium's expense?

The European Union agreed on Friday to indefinitely freeze 210 billion euros ($246 billion) worth of Russian central bank assets held in Europe, removing a big obstacle in using the cash to help Ukraine fight against Russia and the need to vote every six months on extending the asset freeze.

The EU wants to keep Ukraine financed and fighting as it sees Russia's military campaign as a threat to its own security. To do so, EU states aim to put to work some of the Russian sovereign assets they immobilised after the beginning of Moscow's 2022 conflict with Ukraine.

Belgium is worried it will be saddled with an enormous bill if it all goes wrong and Euroclear chief executive Valérie Urbain says using it could "destabilise the international financial system".

Euroclear also has an estimated €16-17bn ($18-20 bn) immobilised in Russia.

Belgian Prime Minister Bart De Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will accept the reparations plan, and he has refused to rule out legal action if it "poses significant risks" for his country.

The indefinite asset freeze is meant to help convince Belgium to support the EU's plan to use the frozen Russian cash to extend a loan of up to 165 billion euros ($194 billion) to Ukraine to cover its military and civilian budget needs in 2026 and 2027.

The loan would be paid back by Ukraine only when Russia pays Kyiv damages, making the loan effectively a grant that advances future Russian reparations payments.

EU leaders - the European Council - are to meet on December 18 to finalise details of the reparations loan and resolve remaining problems, which include guarantees from all EU governments for Belgium that it would not be left alone to foot the bill should a potential Moscow lawsuit prove successful.

Hungarian Prime Minister Viktor Orban said on Facebook he believed the EU move to freeze Russian assets indefinitely via a qualified majority vote - requiring the support of 15 of the 27 member states representing 65 percent of the EU population - would cause irreparable damage to the bloc.

Hungary would do all it could to "restore a lawful state of affairs," he said.

Russia's central bank said the EU plans to use its assets were illegal and reserved the right to use all available means to protect its interests, remarks shrugged off by Dombrovskis.

The bank also said it was suing the Brussels-based central securities depository Euroclear - which holds 185 billion euros ($217 billion) of the total assets frozen in Europe - in a Moscow court over what it said were damaging actions, affecting its ability to dispose of its funds and securities.

Euroclear has been subject to Russian lawsuits in Moscow courts since the EU froze the assets in 2022.