Ahead of the upcoming EU summit in Brussels, seven member states expressed strong support for using frozen Russian assets to finance Ukraine. This group, which includes Ireland, Poland and Lithuania, highlighted that they are considering this in a letter to Commission President Ursula von der Leyen and European Council President António Costa this path as “the most financially viable and politically realistic solution”. According to the content of the letter, the aim is to allocate these funds to meet the immediate needs of the Ukrainian government in both the financial and military spheres.
The signatory leaders have said they would “strongly” support a legislative proposal drawn up by Brussels and recently shared with European capitals. The approach is based on liquidity generated by Russian state assets confiscated as a result of sanctions imposed by the EU and largely held in the Euroclear unit based in Belgium. These funds will be used to provide Kiev with a “reparations loan” worth 90 billion euros, which will be distributed over the next two years.
The document makes it clear that the repayment of this aid to Ukraine will only occur if Moscow provides compensation for the damage caused at the end of the war, which underlines the compensatory nature of the loan. “It is not only the most financially viable and politically realistic solution, but also touches on the fundamental principle of Ukraine’s right to compensation for damage caused by aggression,” the leaders said in the letter, reaffirming their willingness to work together to ensure the proposal is successful.
Brussels has warned that if it does not support the use of frozen Russian assets – an option that requires the support of a qualified majority of member states – the only alternative would be to resort to issuing debt on markets with European budget support. However, this last option would require the unanimity of the twenty-seven, making consensus much more difficult.
The initiative is facing resistance, particularly from Belgium, whose Prime Minister Bart de Wever recently came out strongly against it. According to the Belgian Head of State’s arguments, using these funds would be tantamount to: a “Confiscation” incompatible with international law and would expose his country to significant legal and financial risks. To strengthen his position, German Chancellor Friedrich Merz recently traveled to Brussels with the Commission President to convince De Wever; However, the meeting ended without any significant progress and with an agreement to “further discuss” the matter.
“Belgium’s special situation regarding the use of frozen Russian assets is undeniable and must be addressed in a way that all European states bear the same risk,” von der Leyen said in a short public statement after dinner with Merz and De Wever, emphasizing the need to find a common framework that balances responsibilities and risks.
With the most important meeting of the European Council scheduled for December 18th and 19th, the seven sending countries of the letter stressed the urgency of a solution: ““Time is short”they emphasized. According to these governments, “we have the opportunity to strengthen Ukraine’s defense and negotiate a just and lasting peace when we take a decision on the reparations loan at the European Council in December.” Pressure is mounting as the European Union struggles between financial sustainability, legal soundness and internal divisions in the face of one of the biggest foreign policy challenges in recent years.
*With information from Europa Press
About The Author
