Are the EU27 prepared to use the €200 billion Russian assets frozen since 2022 with the Belgian company Euroclear to help Ukraine cover its military spending and budgetary needs?
Invited to discuss this issue on Wednesday 1 October in Copenhagen at an informal Summit convened by the Danish Prime Minister, Mette Frederiksen, and the President of the European Council, António Costa, European leaders gave a rather positive response.
A few days after the German Chancellor, Friedrich Merz, himself opened the door to the use of these assets (see EUROPE 13718/17), the discussions of the EU27 showed a greater consensus around this idea.
Mette Frederiksen hailed it as a “very good idea” and recalled at the end of the meeting that Ukraine was now “Europe’s security guarantee”. Therefore there is the need to guarantee long-term support and a system that will ensure a fair return, i.e. that Russia “pays for all the destruction”.
The President of the Commission, Ursula von der Leyen, also welcomed a very “good first discussion”. While “of course, we’ll need to flesh out a proposal”, “we can see the interest of the leaders”.
The discussion devoted to Ukraine, marked by the online intervention of President Volodymyr Zelensky, was shorter than expected and only a few leaders spoke, a source reported.
And while the Commission has received the green light from the leaders to continue the work, the Belgian leader, Bart De Wever, whose country hosts Euroclear, has expressed his reservations, particularly from a legal point of view and because of the financial risk for his country.
For Ursula von der Leyen, it is “absolutely clear that Belgium cannot be the only country to bear the risk”.
Ukraine’s needs over the next two years are estimated at at least €60 billion, but the resources of the Member States and the European budget are reaching their limits.
The Commission outlined its ideas on 25 September in a non-paper (see EUROPE 13720/4). Of the approximately €200 billion in frozen assets, Euroclear would transfer €185 billion and use €140 billion to issue a loan to Ukraine, to be released in tranches and subject to conditions. Ukraine would only be required to repay the “repair loan” if Russia agreed to compensate it for the damage caused. The operation would not affect Russia’s assets, the President reiterated on Wednesday.
In any case, when they arrived, a number of leaders came out clearly in favour of this system.
The Irish Prime Minister, Micheál Martin, expressed his support, while acknowledging the challenges involved.
“It’s an excellent idea”, said Finnish Prime Minister Petteri Orpo. “We have long argued in favour of a more offensive use of frozen assets, because it is simply unacceptable to freeze them and consider them as Russian capital without any possibility of use”, added Ulf Kristersson from Sweden.
The Netherlands also supports the system, but it must be legally sound to reassure Belgium. “It is quite understandable that a country like Belgium cannot be held responsible for some €200 billion”, explained a source on 30 September. “These guarantees must be given by all Member States”.
French President Emmanuel Macron has also been more open. He stressed the need for the EU “to remain an attractive and reliable place to do business”. “When assets are frozen, international law is respected”. But it is also necessary “to give Ukraine visibility in terms of financing. (...) And in this respect, what the Commission has been working on, which makes it possible to raise debt on the markets together and to do so with a guarantee from the European budget and the Member States, is a very good thing”.
In addition to pooling risks, the EU27 should also, in this context, find it easier to renew economic sanctions against Moscow every six months. The Commission will therefore also have to work on a mechanism for renewal by qualified majority rather than unanimity.
Enlargement, no change in unanimity in sight. The leaders also welcomed Ukraine’s reforms on the road to the EU. The Summit was an opportunity for them to reiterate their “support” for the accession process, said the Danish Prime Minister.
But the discussion was not very fruitful on the possibility of modifying the procedure to bypass the Hungarian veto and open up each of the clusters to qualified majority voting. This project, which would also require a unanimous decision, has received a “positive” initial response, according to one source, “with the exception of Hungary”.
But Budapest is not alone. The Netherlands and France are not in favour either. (Original version in French by Solenn Paulic)