Belgium’s refusal to back the European Union’s proposed multibillion-euro loan to Ukraine may risk the continuation of International Monetary Fund (IMF) assistance, EU officials warn, raising concerns about Kyiv’s economic stability. The EU plan, known as the 140 billion euros “reparations loan,” would use frozen Russian state assets held within member states, with a substantial portion in Belgium, as collateral.

Supporters of the initiative emphasize that uninterrupted IMF backing is crucial for Ukraine, which faces a substantial budget deficit while continuing its defense against Russia’s full-scale invasion. The IMF is considering an 8 billion-dollar loan to Ukraine over three years, but approval hinges on the EU finalizing its own financing package. Without Belgium’s agreement, the deal is unlikely to be concluded before the IMF’s decisive meeting, expected in December.

EU officials highlight that timely decisions are critical, noting that the next EU leaders’ summit is not scheduled until 18-19 December. Amid a decline in U.S. aid, the IMF anticipates that the EU will assume the primary financial responsibility for Ukraine in the near term. Approval of the IMF programme, even if modest in size, signals to investors that Ukraine is financially viable and committed to governance and reform, a crucial benchmark for further international support.

Background: On 24 September, the EU proposed providing Ukraine with up to 140 billion euros from frozen Russian assets, contingent on IMF assessments of Ukraine’s funding needs for 2026-2027. German Chancellor Friedrich Merz has endorsed using these assets to finance the loan. Despite discussions at an EU leaders’ meeting in Copenhagen, consensus was blocked by Belgium’s concerns over financial and legal risks.