Luxembourg Urges Caution Over EU Plan to Use Frozen Russian Assets

Luxembourg has joined Belgium in expressing caution over the European Commission’s proposal to use frozen Russian assets to back a €140 billion loan for Ukraine. The Grand Duchy is calling for legal and financial clarity before any decision is made.

“It remains essential to clarify the budgetary and legal modalities of the envisaged mechanism, as well as to analyse the implications for Member States. The government stressed that Luxembourg supports “a legally sound and well-thought-out approach” that avoids potential financial or political repercussions. The Ministry also noted that an assessment by the European Central Bank would be “appropriate” to evaluate possible effects on financial stability.

The cautious stance echoes that of Belgium, which has said it does not intend to shoulder the financial burden alone. Belgian Prime Minister Bart De Wever urged other EU countries to show full solidarity, warning that missteps could undermine trust from global investors — including countries like China — that hold significant assets in Europe.

The issue also has a local dimension. Luxembourg has frozen several billion euros in Russian assets since the invasion of Ukraine. In 2024, Russian oligarch Mikhail Fridman filed a compensation claim of €14.6 billion against the Luxembourg government, arguing that the freezing of his assets was unlawful.

Prime Minister Luc Frieden has raised questions about Ukraine’s ability to repay the proposed loan and what would happen if Russia were not required to pay reparations after a peace deal. For now, Luxembourg insists that any move to use frozen assets must rest on a solid legal foundation — and not risk the country’s reputation as a stable and trustworthy financial hub.
Read More : Luxembourg asks for clarification on the use of Russian assets - The bottom line

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