Use of Russian assets in war in Ukraine - a mistake

As Belgian Prime Minister Bart De Wever has stated, it is essential to support Ukraine in its fight against Russian aggression, both to defend Ukraine and to prevent the war from spreading to the rest of Europe. However, at times it seems that Germany has learned little from its own history, as its political arrogance once again risks creating problems for other countries—now including Belgium.

As I understand it, the German Chancellor, Friedrich Merz, publicly announced—without prior consultation with Belgium—that Russia’s frozen assets should be used directly to finance Ukraine’s war effort, rather than limiting support to the interest generated by those assets, as is currently the case. The problem is that these Russian assets are held at Euroclear in Belgium. If Russia were to reclaim its funds in the future, Belgium—not Germany—could be forced to pay and bear the political and financial consequences, including Russia’s anger. Therefore, President Putin should note that it is Germany that is pressuring Belgium to use Russian funds.

Germany’s history should serve as a warning. Germany initiated the First World War, which led to its bankruptcy. The resulting economic collapse paved the way for Hitler’s rise and ultimately the Second World War—the deadliest conflict in human history. After WWII, Germany was one of the main beneficiaries of the Marshall Plan, enabling it to rebuild and modernise rapidly. This support was intended to stabilise Germany and prevent future conflict, yet it also meant that Germany became Europe’s strongest economy, despite having caused immense destruction and genocide.

Other countries paid a heavy price. The British Empire collapsed (a positive outcome for its former colonies, which regained independence), while Greece was pushed into dictatorship to keep communists out of power, even though left-wing groups had played a key role in the fight against nazi Germany. As a result, Greece remained economically weak and was nearly destroyed during and after the 2008 financial crisis when it was forced to pay banks it saved from bankruptcy. Meanwhile, Germany has often been reluctant to use its own financial resources, prioritising balanced budgets over investment. As a result, its infrastructure—such as railways—has deteriorated. Eastern Germany, neglected after reunification and left economically behind, has increasingly turned to extreme-right politics. One must ask why Germany pursued reunification if East Germany would later be treated as a burden.

Now Germany is once again creating risks for another country: Belgium. While Germany has promised to support Ukraine, it appears unwilling to pay the cost itself. Instead, it proposes using Russian assets held in Belgium—an approach that may violate international law, since no international court has ordered Russia to pay reparations. Even if this option were viable, Germany should have consulted Belgium first and sought agreement within international institutions such as the EU and the UN before going public. Now certain countries consider Belgium is to blame for the division in the EU. 

Belgium has warned that Russia could demand the return of at least €140 billion. President Putin has issued warnings, and a Russian banker has cautioned that this could trigger “50 years of litigation” after the war. Belgium is not alone in its concerns: the European Central Bank fears retaliation, and Euroclear has warned that such actions could be considered outright confiscation. Germany itself does not want to bear the risk—yet it is willing to impose that risk on another country.

This raises an uncomfortable question: were Brexit supporters right when they claimed that Germany uses the EU to exert power over other member states? Leadership requires consultation and shared responsibility. Instead, Germany previously enforced harsh austerity on Greece and now seeks to demonstrate solidarity with Ukraine by using Russian money held in Belgium. If this strategy fails, Belgium could face severe financial consequences when Russia demands its assets back.

Germany has brought devastation to Europe before. Is Europe now at risk again because Germany refuses to use its own funds while presenting itself as a leader? There is a reason why both the United States and the United Kingdom remain critical of Germany. President Trump, for example, was furious that the US accumulated massive debts to defend Europe during the Cold War while Germany avoided responsibility for defence spending. Russia, too, remains resentful that Germany emerged economically stronger after WWII while others suffered immense losses.

If Germany is confident that using Russian assets poses no risk, then it should take full responsibility if things go wrong. Yet it refuses to do so, and other countries also decline to accept that liability. Only if Germany were willing to guarantee the consequences could Belgians feel secure that their country would not be bankrupted. Instead, through EU mechanisms supported by Commission President Ursula von der Leyen, Germany has found a way to push its proposal forward while limiting Belgium’s ability to veto it. Belgium remains opposed, and Russia has warned of further escalation.

Moreover, the proposed support for Ukraine would not be a gift, but a loan. Ukraine would eventually be required to repay it, enriching Europe in the process. The expectation appears to be that Ukraine would use the funds to buy European weapons, returning the money to European economies. If Europe truly wants to support Ukraine, it could simply use its own funds to buy weapons for Ukraine—especially given the billions the US has already spent to defend Europe over the past decades.

Under the German plan, Ukraine would begin repaying the loan after the war, even though the money originally came from Russian assets rather than EU budgets. This is not only risky for Belgium; it is also a poor deal for Ukraine. A better approach would be to wait for a war crimes tribunal or international court to determine how much Russia must pay for the destruction and loss of life it caused.

Punishing aggressors by forcing them to pay for the consequences of their actions is a reasonable principle. However, it must be grounded in solid international law to avoid dangerous backlash. Otherwise, countries may decide it is unsafe to hold assets in Europe at all, fearing arbitrary seizure if political leadership changes. History shows that impoverishing nations through punishment can fuel extremism, as Germany itself experienced after WWI.

A negotiated settlement may ultimately be more stable than policies that leave countries economically devastated. Even today, economic hardship has shaped political outcomes, including the election of Donald Trump, driven in part by frustration over US debt incurred while defending Europe from USSR aggression. Smaller, carefully managed funds may be a safer path, allowing mistakes to be corrected before they escalate.

History has already taught Europe these lessons. The question is whether Germany—and Europe as a whole—is willing to learn from them.

Note, the original text has been written by me while ChatGPT improved the layout and readability.