BRUSSELS — The European Commission is making a strategic move to address Belgium’s significant concerns regarding a potential scenario where €140 billion of frozen Russian assets in Brussels could be utilized as a loan to Ukraine. In light of these fears, the Commission is urging all 27 EU member states to endorse the lending of these immobilized funds to Kyiv during a European Council summit scheduled for this month.
Belgium remains cautious, primarily due to the apprehension that it could face financial repercussions if the funds are required to be returned to Russia. To counter these worries, five diplomats and EU officials have indicated that a legal framework is currently being developed to mitigate this risk. A comprehensive proposal regarding the loan is anticipated to be unveiled on Wednesday.
Belgium’s concerns over sanctions and potential vetoes
Belgium’s core concern centers on the possibility that the €140 billion could be allocated to Ukraine, only for a member state with pro-Russian sentiments, such as Hungary or Slovakia, to exercise its veto power against the renewal of EU sanctions targeting Moscow. This scenario would necessitate Belgium to return the missing billions back to Russia, a situation the government is keen to avoid.
“The Commission’s fix to keep Belgium happy is to avoid one EU country being able to overturn sanctions.”
To address Belgium’s anxieties, the Commission is proposing a solution that would prevent any single EU country from having the authority to nullify the sanctions. Currently, Hungarian Prime Minister Viktor Orbán holds this power, as EU sanctions require unanimous consent and must be renewed biannually.
The Commission has identified a potential workaround by invoking a provision in Article 122 of the EU treaty. This article permits member states to act “in a spirit of solidarity” regarding measures that are appropriate to address economic situations. The Commission intends to interpret this clause as allowing a qualified majority of nations to approve the rollover of sanctions, thereby eliminating Hungary’s veto power. According to one diplomat, this approach aims “to secure Belgium’s backing.”
Urgency of reaching an agreement for Ukraine
The EU’s legal advisors have indicated that the adaptable language of Article 122 can indeed justify modifying the current requirement for unanimity, especially given that a reversal of sanctions would have severe economic repercussions across Europe. Moreover, there is a possibility that this legal interpretation could extend the renewal period for sanctions from the existing six-month interval to a more stable three years, as shared by the diplomats familiar with the negotiations.
Time is of the essence; without a timely agreement, Ukraine risks operating on a limited budget while continuing to confront Russian military aggression, with its financial resources expected to deplete by April. The alternative, which could see EU taxpayers absorbing the costs of Ukraine’s defense, stands juxtaposed against the backdrop of unutilized sanctioned Russian assets.
The crucial question now revolves around whether the latest legal maneuvers proposed by the Commission will be sufficient to persuade Belgian Prime Minister Bart De Wever to permit the release of the Russian funds stored in Euroclear bank in Brussels. As of now, De Wever’s office has refrained from commenting on the proposed legal adjustments.
The ongoing discourse surrounding the overhaul of the EU’s sanctions policies has persisted for years within Brussels’ power corridors. In October, the EU’s executive branch suggested leveraging previous European Council conclusions as a legal foundation to maintain the freeze on Russian assets until reparations are repaid post-conflict. However, this approach faced opposition from various member states, who expressed concerns that relying on historical political statements for future policy decisions could establish a precarious precedent.