Politico: Belgium Rejects EU Proposal to Use Frozen Russian Assets

“Belgium on Monday rejected the European Commission’s (EC) proposal to provide a 210 billion euro loan to Ukraine, which would be financed by using frozen Russian assets, thus destroying the European Union’s (EU) hopes of reaching an agreement before a summit on Thursday, Politico reports. After days of negotiations on frozen Russian assets, the European Commission proposed legal changes on Monday, hoping to secure the approval of Belgian politicians. According to the latest draft seen by Politico, the EC provided legal guarantees that Belgium would be able to use the full 210 billion euros in any case if Russia took legal measures to recover the money or retaliated. The EC also said that the money would be transferred to Ukraine only if EU countries provided financial guarantees covering at least 50 percent of the payment amount. The EC also said that all EU countries must finalize bilateral investment treaties with Russia to ensure that Belgium is not left alone if Moscow retaliates for using the frozen assets.

 

However, during a meeting of EU ambassadors on Monday evening, Belgium said that such guarantees were not enough, Politico reported, citing four EU diplomats. According to one EU diplomat, who spoke on condition of anonymity, an agreement will not be reached before the European Council meeting. The Belgian government is opposed to using the frozen Russian assets, fearing that the latter might try to recover the money and demand that Belgium repay the full amount.

 

However, the situation is further complicated by the fact that four countries (Italy, Malta, Bulgaria and the Czech Republic) have agreed to Belgium’s demand to consider other financing options for Ukraine, including joint debt.

 

Meanwhile, France says it continues to publicly support the plan to use Russia’s frozen assets, with French Europe Minister Benjamin Haddad expressing Paris’s support for the plan in Brussels on Tuesday.

 

But a person close to President Emmanuel Macron says Paris is neutral on whether Europe should use Moscow’s frozen billions or Eurobonds to keep Ukraine from going bankrupt.

 

Germany insists there are no other alternatives to using Russia’s frozen assets. Berlin says a common debt is impossible because it would require unanimous approval, and Hungarian Prime Minister Viktor Orban, who is skeptical of support for Ukraine, would block such an initiative. But that is unconvincing for some EU countries. Critics of the proposal say Germany is only seeking to use Russia’s frozen assets because it is ideologically opposed to a common EU debt. On Tuesday, envoys from the 27 EU member states will continue negotiations on the use of frozen Russian assets to finance Ukraine. ELTA reminds that most of the frozen Russian assets are held by the Belgium-based international depository organization Euroclear, so Belgium fears that if these assets are used, Russia could take legal measures to demand their full return.”