Europe’s Golden Goose Fuels Ukraine Funding Amid Sanctions

The piece argues that sanctions-created cash in European banks—centered on Euroclear in Belgium—are not Russia’s money but bank liabilities that would need to be paid back if sanctions end. The interest earned on these balances has funded Ukraine through EU steps like the ERA loan, with Belgium taxing the earnings and shaping policy to keep the funds flowing. A proposed “reparations loan” to borrow these bank balances to Ireland to support Ukraine was shelved after Belgium demanded guarantees, leaving the EU to rely on market borrowing (about €90B for 2026–27) while reserving the right to use frozen assets for repayment if reparations ever arrive. Lifting sanctions could deprive the EU of billions in potential repayments, and Russia would likely challenge the moves, but for now Belgium’s share — dubbed the “goose that lays the golden eggs” — underpins much of Europe’s Ukraine support as the bloc decides how best to finance it going forward.