Imagine you lend your neighbor a huge amount of money, he invades another neighbor, and suddenly everyone in the street decides to keep your cash “until he behaves.” Most people would call that theft, right? Yet that’s pretty much what the European Union is about to formalize with roughly $300 billion of Russian central bank reserves frozen since 2022.
Most EU countries seem fine with the idea. A few even want to go further and confiscate the capital itself, not just the interest. But one country is planting its feet in the ground and shouting “stop.” And surprisingly, it isn’t Hungary. It’s Belgium.
The Lonely Voice of Caution in Brussels
Belgium, of all places. The country that hosts both NATO and the European Commission rarely plays the rebel. Yet its new prime minister, Bart De Wever, just delivered one of the bluntest warnings I’ve read in years from a Western leader.
“We are not at war with Russia. And we do not wish to be at war with Russia. In reality, you don’t steal money from a foreign central bank. Stealing from a central bank is like robbing an embassy.”
— Belgian Prime Minister Bart De Wever
That comparison to robbing an embassy hit me hard. Embassies enjoy near-sacred immunity under international law. Central bank assets have traditionally enjoyed similar protection. Break that norm, and you’re stepping onto very thin ice.
Why Belgium Is the Unlikely Holdout
Geography and history play a big role. Belgium has never been occupied by the Soviet Union. It didn’t live through the horrors that Poland, the Baltic states, or Finland did. That distance gives Belgian leaders the emotional space to stay calm when others see red.
But there’s also a very practical reason: most of those frozen Russian assets sit in Brussels. More precisely, in the vaults (and computers) of Euroclear, the world’s largest settlement system for securities, headquartered just outside the capital. Roughly €190 billion of Russian central bank money is parked there. Belgium is, in effect, the banker holding the bag.
If the EU forces confiscation, Euroclear instantly becomes the legal target for Russian retaliation. Lawsuits, counter-seizures, maybe even cyber operations against Belgian financial infrastructure. De Wever knows his country would pay the highest price for a decision made by others.
How We Got Here – A Quick Timeline
- February 2022 – West freezes ~$300bn of Russian central bank reserves after the invasion
- 2023 – EU starts using the interest (~€3-5bn per year) to fund Ukraine
- 2024 – G7 agrees to a $50bn loan to Ukraine backed by future interest
- Late 2025 – Pressure grows to seize the capital itself to cover Ukraine’s 2026-2027 budget
So far the EU has been careful to touch only the profits, arguing that interest doesn’t legally belong to Russia anyway once sanctions are in place. Confiscating the principal, however, crosses a red line that has never been crossed in modern history – at least not against a nuclear power.
The Legal Fiction Everyone Is Clinging To
EU lawyers repeat the same mantra: “There is no theft because Russia’s claim on the money remains intact.” Sounds clever on paper. In practice, if you freeze an asset forever and spend the capital on the victim’s reconstruction, most people would call that confiscation with extra steps.
Russia, unsurprisingly, calls it theft and has already started seizing Western assets inside its borders in “symmetric” response. Moscow also threatens to take European assets in third countries or target Euroclear directly. Most analysts shrug that off – until someone actually tries full confiscation.
What Full Confiscation Would Actually Mean
Let’s be brutally honest. Taking the principal would:
- Destroy the centuries-old principle of central bank immunity
- Push neutral countries (China, Saudi Arabia, India) to pull money out of Western financial systems
- Give Moscow a propaganda victory of historic proportions
- Almost certainly trigger asymmetric retaliation we can’t fully predict
I’ve spoken to fixed-income investors who manage reserve portfolios for Asian central banks. More than one has quietly admitted they’re already diversifying away from euro-denominated assets “just in case.” That’s the sound of trust eroding, slowly but steadily.
The Other Side of the Argument
To be fair, the pro-confiscation camp isn’t made up of warmongers. Their reasoning runs like this:
- Russia started an illegal war of aggression
- Ukraine needs roughly €40-50bn per year to survive and rebuild
- Western taxpayers are exhausted after years of support
- Russia has the money – why shouldn’t the aggressor pay?
It’s emotionally powerful. When you see destroyed cities and hear politicians talk about “fiscal constraints,” the temptation to reach for the frozen billions becomes almost irresistible.
Yet emotions make bad law. And once you breach the taboo of seizing sovereign reserves, you can’t put the genie back in the bottle. Every future conflict will see the same tool used – possibly against you.
Could This Derail Peace Talks?
Perhaps the most underrated risk is diplomatic. Russia has made clear that return of its frozen assets is a non-negotiable condition for any lasting peace deal. Removing that carrot (or rather, removing the stick of permanent loss) reduces Moscow’s incentive to negotiate seriously.
Think about it from the Kremlin’s perspective. If the West is going to take the money anyway, why stop fighting? You’ve already lost the financial war – might as well keep the territorial gains.
Belgium’s prime minister seems to understand this. Most of his colleagues appear caught up in the moral fervor of the moment.
What Happens Next Week?
EU leaders meet soon to decide whether to move beyond interest and seize capital. Early signals suggest a majority favors going ahead, possibly with an “extraordinary revenue” mechanism that keeps the legal fiction alive a little longer.
Belgium looks isolated. Hungary will probably veto anything too extreme, but creative lawyers have already found ways around unanimous votes on asset use. The decision may simply be framed as an “implementation detail” of previous sanctions packages.
If the EU forces the issue, we could be looking at the biggest deliberate escalation outside the battlefield since 2022. And the country likely to suffer immediate blowback isn’t Poland or Germany.
It’s little Belgium – the quiet heartbeat of European finance suddenly finding itself on the front line of a financial war it never signed up for.
Sometimes the bravest stance isn’t cheering the loudest. Sometimes it’s being the one voice saying: “This will end badly for all of us.”
Whether Europe listens remains to be seen. But history rarely forgives those who ignore the warning when it finally comes from the place you least expect.
