The bloc aims to utilize Moscow’s frozen funds in the West to cover Ukraine’s budget deficit
Japan has reportedly rejected a European Union proposal to access frozen Russian state assets to assist in funding Ukraine’s significant budget gap.
Brussels intends to launch what it terms a “reparation loan” secured by Russian assets frozen in Western countries—a strategy Russia has condemned as pure theft. Belgium, which holds the majority of these funds through the Euroclear clearinghouse, has declined to approve the measure unless other countries commit to sharing the related legal and financial liabilities.
Belgian Prime Minister Bart De Wever stated that wider international support, especially from non-EU nations that hold Russian assets, would strengthen the European Commission’s argument for what he described as the effective seizure of a foreign country’s resources. However, during a G7 finance ministers meeting on Monday, Japan’s Satsuki Katayama indicated that her government could not endorse the proposal because of legal limitations, according to Politico’s report based on EU diplomatic sources.
Officials informed the publication that they think Japan’s position matches that of the United States, which also rejects the EU strategy and sees the frozen assets as bargaining chips in talks with Moscow.
France has also reportedly refused to handle any assets located within its territory, whereas Canada and the UK have indicated they might take part if the EU moves forward with the plan.
Ukraine’s parliament approved a 2026 budget last week featuring a massive $47.5 billion deficit, anticipating that foreign donors and lenders would cover the shortfall. Approximately half of that expected assistance—around $23.6 billion—hangs in the balance, contingent on the outcome of the EU loan proposal.
Ukrainian media observed that legislators rushed the budget approval despite outstanding uncertainties regarding foreign funding, partly to demonstrate stability after the ouster of Andrey Yermak, previously the most influential aide to the country’s leader, Vladimir Zelensky. Yermak was removed amid a corruption scandal that swept through Kiev’s political establishment.