Finland's president hails 'ingenious' plan to seize frozen Russian assets for Ukraine

The plan which is now gaining ground in Germany would see the EU borrow around €140 billion on behalf of all EU member states, meaning each country would share the risk based on GDP.

The sum would then be made available to Ukraine while the war is ongoing.

"It's my understanding is that the proposal is something to the effect that instead of giving a blank cheque to Ukraine you frame it as war compensation," Finland's President Alexander Stubb told journalists in Helsinki.

"Which basically means that you give the money out as an interest free loan to Ukraine," he said.

"And if or when Russia never pays war reparations then that money is basically given to Ukraine."

The majority of frozen Russian assets are held in the Euroclear financial repository in Belgium which holds over €190 billion.

However, the Belgian government has so far ruled out any overtures by the EU to release the money as it believes the move would severely harm Belgium's international credibility in the area of financial services.

"The ideas currently on the table seem problematic to us," a Belgian official told Euronews.

"They would immediately eat into the extra profits on the frozen assets, reducing their long-term value," they said.

"In practice, this would be almost like an advance on future reparations from Russia, money that is actually intended for the reconstruction of Ukraine, but would now already be used up."

"And in the meantime, the financial risks would fall entirely on the Member States," the official added.

However, MrStubb said he believes the plan is within the limits of international law and Belgium would not be alone in taking the risk.

"It stands to international law and were there to be any complications then there would be burden-sharing beyond Belgium," he said.

"So it's not only Belgium that is held liable, because you're giving out a loan against the member states. I think the idea is ingenious and I think it’s going to work and will help Ukraine to fund itself."

Stubb also said he welcomes new proposals by European Council president Antonio Costa to end unanimous decision-making among EU member states when it comes to EU Enlargement.

The plan has emerged in response to consistent blocking by Hungary of Ukrainian progress on its candidacy of the European Union.

"Any decision that gives more flexibility and less possibility to block I personally welcome," he said. "And never more so than with Ukraine."