Unanimity is no longer necessary
EU reaches important agreement on Russian assets
Germany and several EU states want to ensure that frozen Russian state assets can flow to Ukraine in the future. An important building block is now a done deal.
How can frozen Russian state assets be made available to Ukraine? An important prerequisite for this is that a legal basis can be created by majority decision – and not by unanimity, as is otherwise usual at EU level.
This is exactly what Germany and other EU states have agreed on, as the Danish EU Council Presidency announced. Specifically, the primary aim is to prevent Russia-friendly EU states such as Hungary from using a veto to block the release of the frozen funds.
Russian central bank funds are currently frozen via EU sanctions decisions, which must be extended unanimously every six months. This regulation prevents the funds from being used for long-term loans to Ukraine, which only have to be repaid to Russia if Russia is prepared to pay reparations after the end of the war.
Majority decision because of “serious economic difficulties”
In order to hold the Russian money indefinitely, Germany and the other EU states are now relying on Article 122 of the Treaty on the Functioning of the European Union. It stipulates that in the event of serious economic difficulties, appropriate measures can be decided with a so-called qualified majority.
The legal text states, among other things, that Russia’s war against Ukraine continues to pose serious economic challenges. The transfer of funds to Russia must be prevented with the utmost urgency in order to limit damage to the Union’s economy. The regulation is now to be adopted before an EU summit next week.
Belgium still has legal concerns
At the meeting at the latest, Chancellor Friedrich Merz and other supporters of the plan also hope to be able to persuade Belgian Prime Minister Bart De Wever to agree to the plan for the loans. Without Belgium, implementation is considered extremely difficult because by far the largest part of the Russian funds that are to be used for Ukraine are managed by the Belgian company Euroclear. This involves around 185 of the total 210 billion euros in the EU.
The Belgian government has so far blocked the plan, citing legal and financial risks. Among other things, she sees the danger that Russia will retaliate against European private individuals and companies and, for example, carry out expropriations in Russia.
De Wever sets three conditions
De Wever recently named three conditions as prerequisites for Belgium to take part, regardless of the dangers: It must be guaranteed that all possible risks are shared. In addition, from the first moment of implementation of the plan, sufficient financial guarantees would have to be in place to meet potential financial obligations.
And de Wever is calling for comprehensive liquidity and risk protection for all citizens or companies affected by the plan and for all other EU countries in which assets of the Russian central bank have also been frozen to participate. According to the EU Commission, these include Germany, France, Sweden and Cyprus.
