Veerle Colaert, professor of financial law at KU Leuven University, told the BBC she believed Belgium was justified in its concerns.
“Euroclear has a contractual obligation to pay back the money to the Russian central bank on first demand. The only reason it’s not doing it is the sanctions,” she said.
“If sanctions are lifted and at that moment Euroclear hasn’t got the money because it’s being lent to the EU, Belgium would have to step in, but the amount involved is simply too large. That’s why Belgium wants legally binding, on-demand guarantees from the other member states to share the risk.”
The prospect of foreign reserves held in Europe being tapped for other uses could seriously dent confidence in Europe’s financial system, Ms Colaert added.
She argued the better option would be to raise a loan for Kyiv on the markets.
Of the two possible paths she said,
“In both cases Europe has to reimburse the money. The advantage of taking the money from Euroclear’s frozen funds is that it’s interest free but it is not risk free.”