Belgium collected €1.7 billion ($1.77 billion) in taxes from frozen Russian assets in 2024 while blocking a €140 billion ($145.6 billion) loan mechanism that would redirect those earnings straight to Ukraine. The standoff comes as falling interest rates slash potential aid annually by nearly €2 billion ($2.08 billion).

Belgium’s objection traps Ukraine’s $8 billion IMF loan over three years. The fund requires proof of financial viability that depends on the EU mechanism, which Belgium refuses to approve. According to the National Bank of Ukraine, Ukraine’s 2025 budget deficit stands at 25% of GDP, requiring $51.5 billion in external financing this year alone.

Belgium’s profitable objection

Belgium opposes the €140 billion ($145.6 billion) “reparations loan”—which would use frozen Russian state assets as collateral—citing concerns about financial liability if an international court rules the use of Moscow’s reserves illegal. Most frozen assets sit in Brussels-based Euroclear.

Under the current system, Belgium collects these taxes and decides how, when, and whether to spend that money on Ukraine, maintaining revenue and leverage. Under the proposed EU loan mechanism, earnings flow directly to Ukraine through EU frameworks, cutting Belgium out entirely.

Belgian Prime Minister Bart De Wever has pledged €1 billion ($1.04 billion) annually in defense aid to Ukraine. Belgium claims tax revenue from frozen assets funds, though no independent verification exists of whether the full €1.7 billion ($1.77 billion) reaches Ukraine or funds other Belgian priorities.

The disappearing pot

The delay carries a concrete cost: falling European interest rates mean frozen Russian assets will likely generate €5 billion ($5.2 billion) in 2025, down from €6.9 billion ($7.18 billion) last year, Euroclear reported.

When interest rates climbed in 2022, those frozen assets earned just €821 million ($854 million). By 2023, they earned €4.4 billion ($4.58 billion); in 2024, €6.9 billion ($7.18 billion). That peak has passed. Euroclear warns the decline will continue as central banks cut rates further, meaning every month the EU spends arguing means less money reaches Ukraine’s defense.

The timeline trap

The International Monetary Fund is considering an $8 billion loan to Ukraine over three years. Still, IMF approval hinges on whether the EU can finalize its own €140 billion ($145.6 billion) loan using frozen Russian assets, Politico reported. One European Commission official and diplomats from three member countries told Politico that securing the EU agreement would convince the IMF of Ukraine’s financial viability—a requirement for the Washington-based institution to lend to any country.

EU leaders stripped the €140 billion ($145.6 billion) reference from official conclusions, instead asking the European Commission to present “options for financial support”—language considerably weaker than the concrete proposal Germany and Poland had pushed.

The next EU leaders summit is scheduled for December 18-19, while the crucial IMF meeting determining Ukraine’s loan will likely occur in December, creating a structural impossibility even if Belgium reverses course. Polish Prime Minister Donald Tusk insisted December’s summit must be the “final deadline for a decision: yes or no.”

The ownership question

Belgium’s objection centers on potential Russian legal challenges if Moscow demands asset return after a peace deal or sanctions lift. The Belgian government fears bearing sole financial responsibility if an international court rules against asset use.

When Russia launched its full-scale invasion in February 2022, Europe restricted two of three. Freezing €193 billion ($200.7 billion) in Russian central bank assets denied Moscow exclusivity and enforceability. Russia can’t access the money or sue to recover it. Only transferability remains technically intact—though meaningless without the other rights.

Europe had compelling grounds for these restrictions: a state waging a war of conquest against its neighbor faces consequences under international law. The question now is whether Europe will exercise its authority over the final element of ownership by redirecting those assets to Ukraine’s defense.

Belgian Prime Minister De Wever cites Japan as a precedent, noting that Tokyo holds €50 billion ($52 billion) in frozen Russian reserves and is cautious about direct lending. However, Japan is providing $3.3 billion to Ukraine through the G7’s ERA loan mechanism backed by asset earnings, which is not the type of reparations loan the EU proposes.

What’s at stake

Ukraine’s National Bank projects the country needs $51.5 billion in external financing in 2025, declining to $45 billion in 2026 and $39 billion in 2027. The existing G7 loan program, using only windfall profits from frozen assets, provides a total of $50 billion—far short of the requirements.

While the IMF’s $8 billion program is relatively small, its approval signals to investors that Ukraine is financially viable and on track with reforms, which one Ukrainian official called “a benchmark for other countries and institutions to evaluate whether Ukraine is doing proper governance.”

Without the frozen assets mechanism, European defense support would continue through annual national budgets subject to parliamentary approval and six-month sanctions renewal cycles that Hungary or other member states can threaten to veto.

Ukraine's Cabinet of Ministers rejected a nominee to lead the economic crimes agency, drawing swift criticism from lawmakers and businesses over alleged interference in the selection process.

The agency, the Bureau of Economic Security, was created in 2021 to investigate economic crimes. It has since faced accusations of being used to pressure — and in some cases extort — businesses, prompting multiple calls and efforts to overhaul it.

Selecting a new director of the agency by the end of July is one of Ukraine's obligations to the EU and International Monetary Fund as part of international financing packages extended to the war-torn country by the institutions.

As part of a recent attempt to relaunch the bureau, Oleksandr Tsyvinsky on June 30 was officially nominated by the bureau's selection commission that consists of six members — three from the government and three international experts. Tsyvinsky is known for exposing schemes involving illegal land seizures in Kyiv..

But Ukraine's government on July 8 said it had rejected Tsyvinsky following alleged concerns raised by the country's intelligence service of potential Russian connections.

The government unanimously decided to ask the commission to submit two new candidates who meet all security requirements, the government press service wrote on its official Telegram channel, a move it claims aligns with the law.

Following Tsyvinsky's nomination, it was revealed that his father holds a Russian passport. He has said he hasn't spoken to his father, who lives in Russia, in years.

Tsyvinsky holds clearance for state secrets and has passed special vetting, backed by over 20 years in law enforcement, including nearly a decade at the National Anti-Corruption Bureau of Ukraine (NABU).

Opposition lawmaker Yaroslav Zhelizniak, said the government had no grounds to reject a properly nominated candidate, claiming President Volodymyr Zelensky's office is behind the blocking of the nomination.

"The (bureau's) legislation provides no legal grounds for the cabinet to demand a new shortlist or impose additional, undefined requirements such as 'security criteria.' The term itself is absent from any statute and therefore has no legal force," Zhelizniak said.

"The SBU letter in this case is nothing more than an indicator of the winner's disloyalty to the President's Office and a desire to block the appointment," said Olena Shcherban, deputy executive director of the AntAC in a statement following the news.

Major business associations have called on Zelensky, Parliament Speaker Ruslan Stefanchuk, and Prime Minister Denys Shmyhal to reverse the government's decision.

The business groups warned that failing to reform the agency will harm investment decisions, particularly as Ukraine's wartime economy needs to attract capital.

"War is a time for radical changes in the rule of law and business climate, otherwise the economy cannot ensure the country's survival," the businesses wrote in an open letter.

‘Neither side wasted time’ — Ukraine’s economy minister on minerals deal negotiations with Trump’s ‘business-oriented’ administration

Ukraine’s Economy Minister Yuliia Svyrydenko says her task is simple — to get the investment fund behind the closely watched minerals deal with the U.S. off the ground, and prove its detractors wrong. “There are so many criticisms from different parties that this fund is just a piece of paper we can put on the shelves — that it won’t be operational,” Svyrydenko, who is also Ukraine’s first deputy prime minister, tells the Kyiv Independent at Ukraine’s Cabinet of Ministers on July 4, the morning

The Kyiv IndependentLiliane Bivings