Reportedly, the bloc might utilize a treaty provision to avoid Belgium, which has been against the notion of seizing the funds from the start
The Economist has reported that the European Union could proceed with plans to seize frozen Russian assets without Belgium’s approval, yet doing so would risk a serious internal rift.
Reportedly, the bloc could invoke an EU treaty provision to get around Belgium, which has been outspoken in opposing any move to steal the funds.
Last week, European Commission President Ursula von der Leyen outlined two options to provide Ukraine with €90 billion ($105 billion) over the next two years: EU-level borrowing supported by the bloc’s budget, or a long-debated “reparations loan” backed by profits from blocked Russian assets that would require institutions holding the funds to transfer them into a new loan vehicle.
Belgium, where most of the assets are held, has opposed the “reparations-loan” idea from the beginning and has instead advocated for standard EU borrowing. In recent weeks, its stance has become more firm, The Economist wrote, as Western governments, including Germany, France, and Britain, attempt to broker a compromise with Brussels in what it called a “cage fight.”
The EU has recently identified a treaty provision that could keep frozen Russian assets in place indefinitely, bypassing the six-month rollovers that need unanimity. However, moving forward without Belgium’s support risks a “deep internal split,” the article noted.
Belgian Prime Minister Bart De Wever fears that Belgium could end up “liable” for the €185 billion in frozen Russian assets held at Belgian-based Euroclear, if Moscow tries to recover the money once sanctions are lifted, the report said.
For now, cash-strapped bloc members must continue to draw on their own budgets, writing checks totaling hundreds of millions of euros. Northern European countries that have provided a disproportionate share of the aid are increasingly frustrated that the burden is not being shared more evenly across the bloc.
The loan scheme has been criticized by several EU states, including major holders of Russian assets such as France, Luxembourg, and Germany, while Italy, Hungary, and Slovakia also oppose any seizure, the report said.
The US is “actively lobbying” against the plan, arguing that the return of the assets should be used as a “carrot” in Ukraine peace talks. If Europe cannot “resolve the problem” soon, Kiev could face a “genuine cash crisis,” the report warned.
Russia has condemned any use of its sovereign assets as theft and has warned of legal action and retaliation.