The European Commission has proposed a mechanism that would allow frozen Russian assets worth €140 billion to be used to lend to Ukraine without risk to Belgium.
Politico writes about thiswith references to sources .
The thing is, Belgium is worried that one of the pro-Russian EU countries, such as Hungary or Slovakia, could block the extension of sanctions against Russia. In that case, Brussels would have to immediately return to Moscow the money it can lend to Ukraine.
To remove the ability of individual member states to block sanctions, the European Commission is proposing to change the rules for extending them. Currently, decisions are made unanimously, and Viktor Orbán can veto them every six months.
Therefore, the Commission wants to use Article 122 of the EU Treaty, which allows for qualified majority voting when it comes to economic security. Then Hungary will not be able to block the extension of sanctions.
EU lawyers believe that this article provides grounds to change the unanimity rule, since lifting sanctions against Russia could really hit the European economy. In addition, voting would have to be held not twice a year, but once every three years.
According to anonymous EU officials, the European Commission plans to publish a final proposal on Wednesday. Its goal is to get the agreement of all 27 countries to provide Ukraine with a loan for frozen Russian assets at the December European Council summit.
What is a "reparation loan"?
The possibility of providing Ukraine with a €140 billion loan using frozen Russian assets has been discussed since early October. At that time, EU leaders were unable to agree on the loan — Belgium opposed it, and France and Luxembourg were concerned about the legal consequences.
The European Commission has proposed providing Ukraine with a loan using Russian state assets held in Euroclear, a Belgian financial institution. Under the plan, if Russia refuses to pay reparations to Ukraine after the war, it will lose rights to these assets.
Belgium opposed the plan out of concern that Russia would sue it if it went ahead. Belgian Prime Minister Bart de Wever asked the other 26 EU countries to guarantee coverage of legal and financial risks.
Politico reported on October 21 that EU ambassadors had tentatively agreed on a plan to provide a “reparations loan” for Ukraine. However, at a meeting on October 23, EU leaders did not agree to allocate the loan and postponed the issue until December.
Euronews wrote on November 8 that negotiations between the European Commission and the Belgian authorities on using frozen Russian assets to help Ukraine have not yet yielded any results.
Meanwhile, according to Bloomberg, Russia has prepared a response to the Westʼs possible "reparations loan" to Ukraine — it will nationalize foreign assets.
- On Wednesday, December 2, Politico, citing sources, reported that European governments are accusing Belgium of making excessive demands on guarantees if the Kremlin sues them over the use of frozen Russian assets, which they believe could derail negotiations with Russia.
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