German opposition leader Friedrich Merz and European Commission President Ursula von der Leyen are increasing their pressure on Belgium to grant access to the foreign assets of the Russian Central Bank held in the country.

At least 90 billion euros are intended to help financially stabilize Ukraine by 2027. Following talks between Merz, von der Leyen, and Belgian Prime Minister Bart De Wever in Brussels on Friday evening, the EU is now targeting Euroclear, a financial services provider that holds 185 billion euros worth of Russian assets.

The Commission states it can address the company’s concerns. However, Euroclear CEO Valérie Urbain reiterates that accessing Russian state funds violates state immunity and, therefore, international law.

Euroclear has already begun receiving inquiries from other central banks about whether their investments are still secure. The company is considered “systemically important,” and it is argued that if too many investors withdraw their assets, a financial crisis could emerge.

US economist Jeffrey Sachs also warns that the step advocated by Merz and von der Leyen could trigger a deep crisis in Europe, with consequences that could divide the EU.

The Merz-von der Leyen plan: Russian assets to go to Brussels, not Kyiv

Ursula von der Leyen’s proposal primarily involves gaining access to a significant portion of the Russian Central Bank’s foreign assets held by the Belgian financial services provider Euroclear, which have been frozen due to EU sanctions.

This includes 90 billion euros, about half of Russia’s total assets of 185 billion euros. This amount would be transferred to the EU in two installments of 45 billion euros each in 2026/27 and then forwarded by the EU to Kyiv as a loan.

Euroclear would be legally obligated to hand over these funds. It is said that Russia could only reclaim these funds if it agrees to pay reparations. If Russia pays reparations, Ukraine must use this money to repay its debt to the EU or, through the EU, to Euroclear.

This contradicts the primary purpose of reparations, which is reconstruction, yet the EU insists on this course of action.

The EU claims that after the 90 billion euros cycle from Brussels to Kyiv and back to Brussels, Russia’s foreign assets will return to where they belong and be available for use by the Russian Central Bank again.

The “international law” enigma

This questionable plan, which German opposition leader Friedrich Merz agrees with in principle and claims is “fully compliant with international law,” has many contradictions and weak points.

According to German Foreign Policy, the first weak link is the assertion that Russia would only be obliged to pay reparations if it is defeated in the war. However, in the current state of the conflict, a Russian defeat seems unlikely.

If no reparations are paid, no funds will flow back from Kyiv to Euroclear, and the Russian Central Bank will be permanently deprived of its assets.

However, this situation seems likely to be the case from the day the billions are transferred to Kyiv.

As Euroclear CEO Valérie Urbain recalled on Monday, the assets of the Russian Central Bank “belong to the Russian state” and are “legally protected as they are subject to the principle of state immunity in international law.”

Urbain acknowledges that the money can be “immobilized,” but she points out that “anything beyond that” would call international law into question.

Belgian Prime Minister Bart De Wever notes that even during World War II, frozen state assets were not used “for another purpose” during an ongoing war.

Belgium’s resistance could be broken

So far, attempts to implement the von der Leyen plan, inspired by Merz, have failed due to the clear and persistent resistance of Prime Minister De Wever.

De Wever states that any Russian lawsuits in national or international courts regarding the theft of central bank assets would be directed at Euroclear or Belgium.

In the event of a conviction, Belgium would be forced to repay the assets.

Merz and von der Leyen have repeatedly claimed that EU member states would support Belgium and, if necessary, participate in the repayment.

However, inside sources indicate that De Wever will be given no guarantees on this matter. For example, Merz cannot legally commit to paying Germany’s share of the total amount—which runs into tens of billions of euros—without the approval of the Bundestag.

The situation is similar in almost all EU countries. The necessary parliamentary approval cannot be obtained in such a short time.

But De Wever, who “knows the EU’s tricks and intrigues very well,” wants a guarantee that he will not be left in a difficult position in the event of repayment. It is unclear how this contradiction will be resolved.

Financial stability at risk

Beyond the internal contradictions within the EU, Euroclear CEO Urbain also points to vulnerabilities outside the bloc.

Urbain notes that Russia could defend itself against the theft of its assets by “seizing” Euroclear’s assets in Russia. The amount in question is approximately 18 billion euros.

Russia also has the option to seize the assets of other financial institutions and companies in Belgium and the EU to compensate for its losses, provided it has practical access to them.

Urbain also states that the Merz-von der Leyen plan poses “significant risks to financial stability.” Investors might get the impression that their money is no longer safe in Europe and could withdraw it.

Euroclear also announced that it has already received concrete questions from several central banks “about the security of their deposits.” Urbain emphasized that Euroclear holds securities worth 42 trillion euros and is not a “small institution,” highlighting that the company is “systemically important.”

Sachs: EU could split if Russian assets are seized

Late last week, renowned US economist Jeffrey Sachs pointed to potentially serious political consequences.

In an interview with the newspaper Berliner Zeitung, Sachs said the Merz-von der Leyen plan not only violates international law but would also entail “very high costs” for the EU, “deeply divide Europe, and poison relations within the EU.”

Sachs indicated that if the resistance of a few countries like Belgium is simply ignored by Germany, the EU could be “plunged into turmoil,” arguing that Russia’s retaliatory measures could lead to a deep crisis in Europe.

Sachs said the political backlash against Merz, Macron, and von der Leyen in Europe would be severe, especially if the EU’s actions are seen as “a show of force by Germany led by Merz and Leyen.”

Sachs reported that outside of Europe, European heads of state and government are being “met with astonishment and concern,” arguing that Europe’s leadership is “perceived as very weak and foolish.”

Above all, Sachs suggested that Merz’s popularity will continue to decline, stating, “It will destabilize German politics.”