EU officials have said that Belgium’s refusal to endorse a multibillion-euro loan for Ukraine could jeopardize the International Monetary Fund’s (IMF) financial support for Kiev, potentially triggering a broader loss of confidence in the war-battered nation’s economic outlook.

At the center of the dispute is a proposed €140 billion “reparations loan” backed by Russian state assets frozen across the EU. European supporters argue that IMF backing remains vital for Ukraine’s financial survival, but fear that the window for securing fresh funding is rapidly closing.

Ukraine is reportedly grappling with a severe budget deficit and urgently needs IMF assistance to sustain its war effort against Russia. The IMF is currently considering an $8 billion loan to Kiev over the next three years, but its approval hinges on whether the EU can finalize its own €140 billion plan leveraging Russian assets, most of which are held in Belgium.

According to one European Commission official and diplomats from three member states cited by Politico, securing the EU loan agreement would reassure the IMF that Ukraine remains financially viable, a key condition for further lending by the Washington-based institution.

Reduced hope of reaching a deal

However, Belgium blocked the proposal at last month’s EU leaders’ summit, citing financial and legal concerns. The move significantly reduced hopes of reaching a deal ahead of a crucial IMF meeting expected to take place in December.

“We are facing a timeline issue,” said an EU official, who, like others interviewed, spoke on condition of anonymity to Politico.

The official noted that the next EU leaders’ summit is scheduled for December 18–19, warning that the bloc must find “more urgent solutions.”

With Washington scaling back its aid, the IMF expects the EU to shoulder most of Ukraine’s financial burden in the coming years.

While modest in size, the IMF’s program carries outsized significance: its approval signals to global investors that Ukraine remains solvent and committed to reform.

“It’s a benchmark for other countries and institutions to evaluate whether Ukraine is doing proper governance,” a Ukrainian official explained.

IMF experts are expected to visit Kiev in November to negotiate the next three-year plan.

“[The IMF’s support] is something that we should not play with,” the EU official cautioned.

Why the €140 billion loan matters

At their most recent summit, EU leaders removed a reference to the €140 billion Ukraine loan from the official Council conclusions, a concession to Belgium.

The diluted text “invites the Commission to present, as soon as possible, options for financial support based on an assessment of Ukraine’s financing needs,” but stops short of specifying concrete measures.

Such vague language is unlikely to satisfy IMF concerns over Ukraine’s financial stability, Politico reported, citing one EU official and two diplomats. They suggested that stronger actions may be needed, including tabling a formal legal proposal for the loan, issuing firmer conclusions at the next finance ministers’ meeting, or even convening an extraordinary leaders’ summit.

To bolster Ukraine’s economic credibility, EU officials are also assuring the IMF that Kiev will not be required to repay the €140 billion loan in the foreseeable future.

Brussels maintains that repayment to Moscow would only occur if the Kremlin ends its war and pays reparations to Ukraine, a scenario few consider realistic.

“There is no universe in which Ukraine needs to come up with the money itself,” said another EU official. “It either gets the money from Russia or doesn’t give it back. As far as Ukraine is concerned, it’s as good as a grant.”

Read more: Ukraine war threatens dollar stability: The Independent