Italy has joined the Belgium-led coalition opposing the European Commission’s plan to use immobilized Russian assets as collateral for a €210 billion reparations loan to support Ukraine in its war against Russia. Italy, Belgium, together with Bulgaria and Malta, issued a document urging the Commission to explore alternative options to using the Russian assets to keep Ukraine afloat over the coming years, citing the risky legal ground of what many describe as the outright robbery of Russian assets.
The Commission’s plan would finance Ukraine’s budgetary spending and its spending on self-defence altogether from Russian assets stored in European banks, frozen since the start of the war. Ukraine would only have to repay the loan if Russia ends the conflict and pays war reparations—an unlikely scenario. Approximately €140 billion is held in the Euroclear bank in Belgium, which is the reason why the Belgian government is leading the opposition coalition.
Prime Minister Bart De Wever labelled the proposal a ‘complete madness’ back in October, stating that the risk of Russian retaliation is too high. Essentially, if Moscow wins a lawsuit against any member state participating in such a move, they—the member states, not the European Union—would have to compensate Russia. Not to mention that, in case of such a move, foreign investor confidence and trust in the EU would drop significantly, likely resulting in many investors withdrawing their money from European financial institutions.
Italy, Belgium, Bulgaria and Malta also expressed criticism over last week’s decision by the European Commission to seize emergency powers to pave the way for the reparations loan. As reported by Hungarian Conservative, Brussels invoked an emergency clause in the Treaty on the Functioning of the European Union, resulting in the decision on the reparations loan requiring a qualified majority instead of unanimity—evading vetoes from Hungary and Slovakia, which had already signalled immovable opposition to the plan. EU member states voted at ministerial level to approve the Commission’s invocation of Article 122 for an indefinite immobilization of Russian assets at the end of last week, with only Hungary and Slovakia voting against.
Hungarian Prime Minister Viktor Orbán described the move as ‘clearly unlawful’ and stated that the Commission is ‘systematically raping’ EU law. Hungary itself issued an official statement urging the Commission ‘to stand for the respect of the Treaties.’
Despite voting in favour of this move to ‘preserve EU unity’, the four countries said they were wary of subsequently progressing to use the Russian assets themselves. ‘This vote does not pre-empt in any circumstances the decision on the possible use of Russian immobilized assets that needs to be taken at Leaders’ level,’ the four countries wrote. They added that the legal clause ‘implies very far-reaching legal, financial, procedural, and institutional consequences that might go well beyond this specific case.’ Member states’ leaders will gather on 18–19 December in Brussels for the European Council summit to decide on the issue.
Under qualified majority, at least 55 per cent of member states must vote in favour, which under the current EU membership means 15 out of 27. Those supporting member states must represent at least 65 per cent of the total EU population. To gather a blocking minority, at least four member states are needed, with their population representing at least 35 per cent of the total EU population. Even if joined by Hungary, Slovakia, and, after Andrej Babiš took office in government, Czechia, the seven countries will not reach the 35 per cent threshold.
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