(Dec 3): Belgium dismissed the European Union’s (EU) new legal proposal to tap frozen Russian assets to back a loan for Ukraine.
The remarks come just hours before the European Commission, the EU’s executive arm, is expected to release a legislative proposal that would authorise the bloc to use up to €210 billion in immobilised Russian central bank assets to back loans for Ukraine as it fights off Russia’s onslaught.
“The text the commission will table today does not address our concerns in a satisfactory manner,” Belgian Foreign Minister Maxime Prevot said on Wednesday morning before a Nato meeting in Brussels.
The surprise rejection throws yet another wrench into the EU’s attempts to find a new funding plan for Ukraine. And with Kyiv facing a cash crunch in the coming months, officials are running out of time.
Most EU leaders have long considered using the Russian assets as the most feasible way to get Ukraine the billions it needs as Russia’s full-scale invasion approaches its fourth year.
But Belgium has been resisting for weeks, anxious about legal ramifications for the country given most of the funds are housed at the Brussels-based Euroclear.
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The government fears it may be left on the hook to repay the loan if Russia brings legal action.
“It is not acceptable to use the money and leave us alone facing the risk,” Prevot said.
The commission and other countries have tried to allay these fears, but Belgium says it remains unconvinced by the legal options being floated.
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“Our door has always remains open, and still is, however we have the frustrating feeling of not having been heard,” Prevot said. “Our concerns are being downplayed.”
Officials had been hoping that the commission’s legal proposal on Wednesday would smooth the way for a final agreement on the issue when EU leaders gather in Brussels on Dec 18.
That timeline now seems in doubt.
Belgium’s latest remarks may cause officials to take a closer look at other funding options. The commission has also suggested that countries could provide billions in grants to Ukraine, or that the bloc could collectively take on joint debt to back a loan. Neither choice is broadly popular within the bloc.
Prevot on Wednesday encouraged the EU to borrow the money to back a loan.
“It is a well-known, robust and well-established option with predictable parameters,” he said.
Speaking shortly after Prevot, German Foreign Minister Johann Wadephul said he believed the frozen assets option could still prevail.
While saying that Belgium’s concerns were justified, he argued that “issues can be solved”.
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