Belgium Urges Rethink of EU Strategy on Frozen Russian Funds
Belgium has effectively cast doubt on progress in talks on using frozen Russian sovereign assets to finance aid to Ukraine on the eve of the European Council summit.
The Gaze reports on it, referring to Politico.
Belgium’s EU ambassador, Peter Moors, said discussions were “going backwards,” highlighting growing tensions within the bloc less than 24 hours before key decisions are due.
Belgium’s pivotal role stems from the fact that more than half of the frozen Russian assets are held at the Brussels-based financial depository Euroclear. As a result, the Belgian government fears that any move to use these funds could expose the country to legal and financial risks.
Belgian Prime Minister Bart De Wever has refused to back the proposed €210 billion “reparations loan” unless other EU member states provide clear and unlimited financial and legal guarantees.
Another key Belgian demand is that all EU countries terminate their bilateral investment treaties with Russia, so that Belgium is not left alone facing potential Russian retaliation. However, several member states are reluctant to do so.
Against this backdrop, Belgium is actively promoting an alternative option: financing Ukraine through the issuance of joint EU debt. This position is also supported by Italy, Malta, and Bulgaria.
European Commission President Ursula von der Leyen has confirmed that two paths are currently on the table: one based on Russian assets and another based on EU borrowing.
However, joint borrowing requires unanimous approval, making the option vulnerable to a veto by Hungary. As a potential workaround, invoking the EU’s emergency Article 122 was proposed, which would allow decisions to be taken by a qualified majority.
Yet legal services of both the European Commission and the EU Council have warned that using Article 122 to authorize joint debt would be legally problematic. Meanwhile, one EU official noted that it’s technically possible if it is not backed by the EU budget headroom.
Meanwhile, EU High Representative Kaja Kallas said the European Union is currently focused exclusively on preparing a so-called “reparations loan” for Ukraine based on frozen Russian assets, stressing that no alternative financing scenarios are being considered at this stage.
“Because as soon as you start talking about ‘plan B’, it is actually ‘plan B’ that gets implemented. That is why all work is currently focused on ‘plan A’, and we are not even considering other options,” said Kallas.
She also downplayed Russia’s ability to successfully challenge the freezing of its assets in courts or arbitration, suggesting such threats are largely intended to intimidate Belgium, where a significant share of the assets is held.
As The Gaze reported earlier, seven European Union member states have called on the bloc’s top leadership to unlock frozen Russian assets in order to finance a new “reparations loan” for Ukraine.
Read more on The Gaze: Reparations from Russia: The EU Council has All the Tools to Provide Money to Ukraine