At Thursday’s European summit one of the issues discussed was assistance for Ukraine’s war effort. A proposal to use the Russian Central Bank’s frozen assets, much of which are held at Euroclear that is based in Brussels, was omitted from the list final decisions by EU leaders.
Speaking after the summit, the Belgian Prime Minister Bart De Wever (Flemish nationalist) said that the idea remains under consideration. However, Mr De Wever would prefer an alternative solution.
The European Commission is looking into ways to provide Ukraine with around 140 billion euro. One option would be to do this through loans backed by frozen Russian assets. Mr De Wever has voiced both legal and financial concerns, pointing out that Japan, which holds 50 billion euro in Russian Central Bank reserves, has already ruled out tapping into them. The Belgian Prime Minister also echoed the warning given by the European Central Bank President Christine Lagarde that cash liquidity must be guaranteed if Russia demands repayment.
“I asked my colleagues who was willing to sign. The request wasn’t met with a tsunami of enthusiasm”, Mr De Wever said. He added that a broader approach, involving assets from outside the eurozone, might reduce the legal risks.
While Belgium’s amendments to reflect these concerns were ultimately dropped, leaders agreed that the European Commission will continue to explore “options” for providing funding for Ukraine. Mr De Wever believes that a decision needs to be made sooner rather than later “Time is of the essence. We need to find a solution before the end of the year.”