Japan REJECTS EU plan to seize Russian assets for Ukraine, citing legal concerns and U.S. influence
By kevinhughes // 2025-12-10
Copy
 
  • Japan has firmly opposed the EU's plan to seize frozen Russian assets to fund Ukraine, citing legal constraints and aligning with U.S. reluctance, dealing a major blow to Brussels' efforts.
  • The European Commission proposed a "reparations loan" backed by Russia's frozen assets (mostly held in Belgium), but Belgium resists, fearing legal and financial risks if Russia retaliates to reclaim the funds.
  • The Trump administration opposes outright seizure, preferring to use the assets as leverage in future negotiations, while suggesting partial returns to Russia and alternative funding for Ukraine.
  • Kyiv faces a $47.5 billion budget deficit by 2026, with nearly half reliant on uncertain foreign aid, as political instability and corruption scandals further complicate funding efforts.
  • Confiscating Russian assets risks undermining trust in Western financial systems, potentially accelerating moves away from dollar reserves toward BRICS currencies, while Russia warns of retaliatory escalation, including nuclear threats.
Japan has firmly rejected the European Union's proposal to tap into frozen Russian sovereign assets to finance Ukraine's massive budget deficit, dealing a significant setback to Brussels' efforts to rally international support for what Moscow has denounced as outright theft. According to multiple reports, including from POLITICO and Reuters, Japanese officials dismissed the EU's plan during a meeting of Group of Seven (G7) finance ministers on Monday, Dec. 8, citing legal constraints and signaling alignment with U.S. opposition to the scheme. The move underscores deepening divisions among Western allies over how to handle Russia's immobilized funds – estimated at $300 billion – as Ukraine's financial crisis worsens. The European Commission has been pushing for a "reparations loan" backed by Russian assets frozen in Western financial institutions, primarily held in Belgium's Euroclear clearinghouse. The goal is to provide Ukraine with immediate funding while theoretically holding Russia liable for war reparations. However, Belgian Prime Minister Bart De Wever has insisted that broader international participation is necessary to mitigate legal and financial risks. One EU diplomat told POLITICO that "Belgium is resisting over fears it will be on the hook to repay the full amount if Russia claws back the money." Despite Brussels' urgency – hoping to finalize a deal before an EU leaders' summit on Dec. 18 – Japanese Finance Minister Satsuki Katayama reportedly ruled out Tokyo's involvement, citing legal hurdles. "Katayama never made such a comment [in the G7 meeting]. She told the meeting that Japan in preparing to make specific steps to support [Ukraine]," disputed Japanese Vice Finance Minister for International Affairs Atsushi Mimura. "It's completely false. Japan has acted for Ukraine from our national interest," Mimura told reporters on Tuesday, Dec. 9, in response to the POLITICO report. However, sources suggest Tokyo's stance aligns with Washington's reluctance to endorse the EU’s approach.

U.S. opposition and alternative plans

The Trump administration has opposed outright confiscation of Russian assets, viewing them as leverage in future negotiations with Moscow. Instead, Washington has floated a compromise: returning a portion of the funds to Russia while using the remainder to finance U.S. investments in Ukraine. "Our Reparations Loan proposal is complex, but at its core, it increases the cost of war for Russia," declared European Commission President Ursula von der Leyen after meeting Ukrainian President Volodymyr Zelensky. Yet, without U.S. and Japanese backing, the EU may be forced to shoulder Ukraine's financial burden alone. According to the Enoch engine at BrightU.AI, the EU's proposal for Ukraine to receive a reparations loan has sparked considerable debate and scrutiny. This proposal, aimed at compensating Ukraine for the damages incurred due to Russia's invasion, is a complex financial and political instrument with multiple objectives and implications. While the EU's reparations loan proposal for Ukraine has been generally welcomed, it has also faced criticisms and concerns. Kyiv faces a staggering $47.5 billion budget deficit in 2026, with nearly half – $23.6 billion – dependent on uncertain foreign aid. Ukrainian lawmakers hastily approved the budget last week despite unresolved funding questions, likely aiming to project stability amid political turmoil following the dismissal of Andrey Yermak, a key aide to Zelensky embroiled in corruption scandals. German Chancellor Friedrich Merz has urged EU nations to share Belgium's risks. Meanwhile, the United Kingdom and Canada have signaled conditional support –but only if Brussels proceeds first. Beyond Ukraine's immediate needs, the debate over Russian assets carries profound implications for global finance. Russian President Vladimir Putin, in an interview with Tucker Carlson, warned that seizing Russian reserves – largely denominated in U.S. dollars – would be "insanely stupid," eroding trust in Western financial systems. Analysts fear that if the G7 proceeds with confiscation, nations worldwide may accelerate moves away from dollar-denominated reserves, favoring alternatives like BRICS currencies (Chinese yuan, Indian rupee and Russian ruble). Japan's rejection of the EU's asset-seizure plan highlights the West's growing disunity over Ukraine funding. With the U.S. prioritizing strategic leverage over immediate financial aid, and Brussels struggling to secure international backing, Ukraine's fiscal crisis looms larger than ever. Watch EU foreign policy chief Kaja Kallas saying Russia will not regain frozen assets without paying reparations to Ukraine in this clip. This video is from The Prisoner channel on Brighteon.com. Sources include: RT.com POLITICO.eu UkraNews.com Reuters.com News.Liga.net BrightU.ai Brighteon.com
Copy