BRUSSELS — Japan has rebuffed the EU’s offer to join its plan to use frozen Russian state assets to fund Ukraine — dashing the bloc’s hopes of securing global support for the initiative.

During a meeting of G7 finance ministers on Monday, Tokyo poured cold water on a request by Brussels to copy its plans to send Ukraine the cash value of Russian sovereign assets held in Belgian bank Euroclear.

Japan signaled it is unable to use around $30 billion worth of Russian frozen assets held on its soil to issue a loan to Ukraine, two EU diplomats briefed on the discussions told POLITICO.

The European Commission wants EU capitals to strike a deal on using up to €210 billion in sanctioned cash before a leaders’ summit on Dec. 18. Belgium, however, is resisting over fears it will be on the hook to repay the full amount if Russia claws back the money.

One of its demands is that other G7 countries beyond the EU issue a loan to Ukraine using the Russian frozen assets that they hold domestically.

Belgian Prime Minister Bart De Wever has insisted that greater participation by G7 allies will reduce the risk of Russia retaliating solely against Belgium.  

However, the U.S. and Japan have refused to join Brussels’ scheme — leaving the EU to bear the brunt of Ukraine’s future financing needs alone.

During the meeting, the U.S. said it will cut support to Ukraine after disbursing the last installments of a G7-wide loan that was negotiated by the Biden administration in 2024, an EU diplomat said.

The war-battered country faces a budget shortfall of €71.7 billion next year and will have to start cutting public spending from April unless fresh money arrives. 

“We will continue to work together to develop a wide range of financing options to support Ukraine, including potentially using the full value of the Russian Sovereign Assets, immobilized in our jurisdictions until reparations are paid for by Russia,” finance ministers from G7 countries wrote in their joint statement after the meeting.

But in a note of caution they added that “our action will remain consistent with our respective legal frameworks.”

Japanese Finance Minister Satsuki Katayama has ruled out using the Russian assets due to legal concerns, said an EU diplomat who was briefed on the meeting.

However, several officials said Japan’s stance was linked to U.S. opposition to using the Russian assets for Ukraine, arguing Tokyo doesn’t want to flout its crucial ally. Like the EU diplomats, they were allowed to remain anonymous to discuss sensitive matters.

U.S. President Donald Trump has signaled he intends to use the Russian assets to bring President Vladimir Putin to the negotiating table.

Instead of sending the money to Kyiv, Washington has suggested handing part of the assets back to Russia and using the remainder to finance U.S. investments in Ukraine.

But European Commission President Ursula von der Leyen continued to support the idea of using the Russian assets to help Ukraine during a meeting on Monday with the country’s president, Volodymyr Zelenskyy.

“Our Reparations Loan proposal is complex but at its core, it increases the cost of war for Russia,” von der Leyen wrote in a statement after the meeting, in which she was joined by British Prime Minister Keir Starmer, French President Emmanuel Macron and German Chancellor Friedrich Merz.

“So the longer Putin wages his war, spills blood, takes lives, and destroys Ukrainian infrastructure — the higher the costs for Russia will be.”

In a boost for von der Leyen, the U.K. and Canada have signaled openness to handing over the Russian state assets held on their soil to Ukraine — provided the EU’s plan comes to fruition.

This issue is expected to take center stage during a meeting on Friday between Starmer and De Wever.