Belgian minister warns about ‘dangerous’ frozen asset loan for Kyiv
Heating up
EU member states are working to co-ordinate on a potential path for peace in Ukraine, but the debate around using Russia’s frozen assets has become increasingly fractious.
Context: The European Commission has proposed issuing a €140bn “reparations loan” to Kyiv based on immobilised Russian central bank assets. US President Donald Trump’s push for a peace in Ukraine without initially consulting his European counterparts has upped the pressure on agreeing the loan.
At yesterday’s virtual meeting of foreign ministers, EU chief diplomat Kaja Kallas and others forcefully called for the initiative to be expedited, according to officials.
But Belgium, where the majority of the assets are located and which has to date opposed such a loan, reacted defensively.
Belgium’s foreign minister Maxime Prévot warned that the scheme would be “adventurous and dangerous”, according to four people briefed on his remarks. He also said that his government wanted to pursue a different proposal made by the commission to instead issue joint debt to support Kyiv.
In a parallel meeting of EU ambassadors, Belgium’s representative endorsed the commission preparing both a legal proposal for joint debt, and for the reparations loan, according to two people briefed on those discussions.
A spokesperson for Prévot denied that there was inconsistency between the positions. “The position defended by minister Prévot today does not represent a change. As we stated as soon as the options were put on the table, the position being defended is . . . that of a loan by the European Union on the markets,” the spokesperson said.
Euroclear, the Brussels-based central securities depository which holds most of the assets, shares the Belgian government’s concerns that it would be on the hook for any legal or financial risks from the loan.
In a letter to commission president Ursula von der Leyen and EU Council president António Costa, seen by the Financial Times, Euroclear CEO Valérie Urbain writes that the scheme is “without legal precedent in the European Union and international law, and could be seen as de facto confiscation”.
Urbain warned that Russian retaliation could lead to financial exposure of member states — raising similar issues to joint debt, which countries like Germany oppose because of the strain on budgets.
As a December meeting of EU leaders approaches, officials are growing impatient. “We have to fix this financing stuff to keep Ukraine afloat . . . it’s time to stop talking and start doing,” said one senior EU diplomat.