Brussels has discovered a clause in EU treaties that allows decisions to be made without the unanimous consent of all member states, which would allow the freezing of Russian assets indefinitely, instead of the freeze being extended every six months, the Financial Times reports.
The clause in question, according to the article, allows for measures to be taken without unanimity in the event of serious economic shocks, such as the military conflict in Ukraine and “hybrid aggression“ of Russia.
„Brussels proposes to use this to freeze Russia's reserves indefinitely until a similar active decision is taken to lift the freeze“, the newspaper writes.
The newspaper notes that when decisions are made to extend the freeze on Russian assets, there is a risk that an EU country, such as Hungary, will oppose this, in which case the measure could be lifted without a unanimous decision. The article emphasizes that the possibility of bypassing Hungary's veto is “a very aggressive power grab“ and that the legal basis for this is likely to be challenged in court.
The media outlet, citing documents, clarifies that the initiative for a “reparation loan“ does not involve the confiscation of Russian assets: funds from European banks will be lent to the EU at zero interest. If the EU changes its legislation to permanently freeze Russian assets, banks would not have to comply with Russia’s demands, and the EU would not have to pay the debt, the article states.
On December 3, the European Commission approved two options for financing Ukraine, including a “reparation loan” using Russian assets. The decision must be approved by a “qualified majority” and does not require the consent of all EU member states. According to Politico, it is proposed to provide 165 billion euros to Kiev using Russian assets: 25 billion euros from accounts held by private banks in the European bloc and 140 billion euros in the Belgian depository Euroclear, where most Russian assets are stored.
As an alternative, the European Commission has proposed providing Ukraine with a loan financed by the EU budget. As Politico reported, Hungary has blocked the plan.
Belgium opposes the “reparation loan,” saying it is not prepared to shoulder the risks of such a scheme alone. European Commission President Ursula von der Leyen and German Chancellor Friedrich Merz have tried unsuccessfully to persuade Belgian Prime Minister Bart de Wever to change his position.
Euroclear and the European Central Bank have also spoken out against the plan, with the latter’s head, Christine Lagarde, saying the legal and financial rationale for the seizure appears “extremely justified.”
Moscow considers any action against its assets to be theft and has warned of retaliation. The Kremlin has warned that both countries and individuals will be held accountable for the seizure of Russia’s foreign assets.