European Commission, Belgium to meet amid Russian asset dispute - Politico
Senior officials from the European Commission and the Belgian government will meet on Friday to try to break the political deadlock over the use of frozen Russian state assets to finance a €140 billion reparations loan to Ukraine.
This was reported by Politico, citing two senior EU officials, according to Censor.NET.
Belgium is reluctant to support the plan proposed by the European Commission as a way to use Russian funds subject to sanctions to support Ukraine without ultimately confiscating them, as these funds are held by the Brussels-based financial company Euroclear.
Prime Minister Bart De Wever fears that his government will be forced to return billions to Moscow if the Kremlin's army of lawyers takes legal action over this initiative. At a meeting of EU leaders in October, De Wever demanded that EU leaders provide more substantial guarantees to protect his country from the financial and legal risks that could arise as a result of this initiative, the publication notes.
The meeting on Friday comes after deputy finance ministers failed to make progress in talks on a reparations loan on Tuesday, and the European Commission warned that time was running out.
"The longer we delay, the more difficult it will be to solve the problem. This could call into question some possible interim solutions," said European Commissioner for Economic Affairs Valdis Dombrovskis.
Politico writes that Ukraine will face a budget deficit next year if the money does not arrive by spring. Without an agreement on the use of Russian assets, the European Commission warns EU governments that they will have to support Kyiv from their own pockets—and there is little desire to do so after the pandemic has devastated national budgets.
The Commission will present Belgium with a memorandum on alternative financing options for Ukraine, including borrowing from the EU. There is hope that De Wever, who also has financial constraints, will give in when he sees that there are no other viable options.
Russian assets to help Ukraine
- Earlier, European Commission President Ursula von der Leyen proposed using frozen Russian assets as collateral for providing Ukraine with "reparation loans". Formally, Russian assets subject to sanctions will not be confiscated, but Ukraine will repay such loans only after Russia pays reparations.
- According to various estimates, the European Union's "reparations loan" to Ukraine, secured by Russian assets, could amount to €130-140 billion. Its final size will be determined after the International Monetary Fund assesses Ukraine's financing needs in 2026 and 2027.
- In total, Euroclear currently holds more than €175 billion in cash from frozen Russian assets, which could be used to secure a new loan. But before the EU agrees to grant a reparations loan, it will want to repay the G7 loan to Ukraine of €45 billion ($50 billion) agreed last year, which was to be repaid from the proceeds of frozen Russian assets.
