by Giacomo Gabellini
The 19th package of sanctions against Russia recently adopted by the EU has paved the way for a draft law prepared by the European Council, which entrusts the European Commission with the task of providing a legal basis for the release of a credit line of 140 billion euros for Kiev secured by Russian public assets frozen since March 2022. We are talking about Assets of $185 billion it is only held at Euroclear, a financial clearing company based in Belgium, whose reliability is closely related to compliance with the principles neutrality and applicable legal regulations regarding the safekeeping of securities.
The trick identified by European experts to overcome this problem is to make repayment of Russian funds pledged to guarantee the loans conditional on availability. Fly to pay war reparations in favor of Ukraine. In fact, however, initiatives promoted by the Council of Europe consider a forced takeover property that is detrimental to the Russian state. Until now, the European Union is still “limited” in implementing a mechanism seizuretransfer to the community budget and reuse in the form of aid to Ukraine of interest and income generated by Russian assets held in Euroclear and other credit institutions. Income and interest do not actually fall into the category of “state property”, unlike the original capital that produces them.
To act unilaterally on the latter is to deliberately violate the pillars of the lawsovereign immunity of a stateIn this case, Belgium faces very large demands compensation due to failure to fulfill contractual obligations and exposing the European Union to permanent losses and cannot be repaired international credibility.
The Swiss Federal Office of Justice has noted this in 2023, underlining that “the expropriation of private assets of legal origin without compensation not allowed according to Swiss law. Confiscation of blocked private assets is not compatible with the Federal Constitution and the current legal system. This also violates Switzerland’s international commitments. Other countries also enjoy similar constitutional rights and guarantees.”
Belgian authorities have reached an important conclusion similarvia Prime Minister Bart De Wever presented three binding conditions for the green light: “Mutualization of risks, real guarantees from all countries regarding contributions towards reimbursement of any costs and the use of all immovable Russian assets, even outside Belgian territory. If these three very reasonable demands are met, then we can move forward. If not, I will do everything in my power at the European level, as well as at the national level, politically and legally, to block this decision”. Also because “we will receive very large requests compensation. We want guarantees that, if the money has to be returned, all Member States will contribute. The consequences are not only a concern for Belgium. In addition, every country that has immovable assets should move with us, because only we, Euroclear are the only financial institutions that offer additional benefits to Ukraine. We know that there are always large amounts of Russian money in other countries silent about that matter. If we move, we all have to do it together. This is European solidarity.”
De Wever’s tenacity – called a “bad boy” by magazines Political because of his “obstructionism” – he immediately made a clear statement unavailability to the sharing of risks by different countries. Widespread doubts and fears regarding the technical-legal framework established by the European Commission have weakened the possibility of a collegial agreement on the use of frozen Russian funds in the interests of Ukraine. As stated in the summit’s final declaration of 23 October, signed by 26 of 27 European leaders (Hungary abstained), “The European Council invites the Commission to present, as soon as possible, proposals for financial support based on an assessment of Ukraine’s needs, and invites the parties involved to continue the work so that the European Council can return to the issue at its next meeting”, scheduled for December. A somewhat vague passage remains in the document which states: “without prejudice to EU law, Russian assets must remain frozen until Moscow establishes it ending the war of aggression against Ukraine and he will not pay for the losses caused by his war.”
Despite the potentially disastrous impact, President Macron and Chancellor Merz have supported the seizure of Russian assets, which EU leaders are seeking to force the most stubborn governments to confiscate. He revealed it Politicalstating that “the European Union is racing against time on two fronts. Firstly, Ukraine is destined to do just that running out of funds at the end of March. Second, the decision-making process may become more difficult as Hungary seeks to join forces with the Czech Republic and Slovakia to form an alliance. skeptical towards Ukraine. Many believe we need to act now or never.”
Due to excessive fiscal indiscipline in several European countries making development a unanimous consensus In light of the prospects for Eurobonds, the expropriation of Russian assets inevitably emerges as the only alternative solution to guarantee support for Ukraine.
