Belgium Raises Concerns Over Merz's Plan to Utilize Russian Assets for Ukraine Support

Belgian Prime Minister Bart De Wever has expressed significant concerns regarding a proposal from German Chancellor Friedrich Merz that aims to use frozen Russian assets to bolster military support for Ukraine. This initiative, which was discussed at a recent European summit in Copenhagen, has been met with skepticism from multiple stakeholders, including De Wever, who highlighted various risks associated with the plan.

During his address to over 40 heads of state and government, Merz advocated for the allocation of approximately EUR140 billion in loans for Ukraine's military enhancement. However, he acknowledged the challenges that lie ahead in realizing this strategy. De Wever criticized the supporters of the initiative for allegedly overlooking critical dangers and failing to provide satisfactory answers to unresolved issues, stating that the proposal ventures into uncharted territory.

One of the primary concerns raised by De Wever is the potential risk of expropriating assets belonging to European companies operating in Russia. He also warned of possible retaliatory actions against the Belgian financial institution Euroclear, which currently manages a significant portion of the frozen Russian funds in the EU.

De Wever conveyed that comments from Moscow indicate severe repercussions if the assets are tampered with, suggesting a threat that would have long-lasting consequences. The director of Euroclear is reportedly under heightened security measures as a precautionary response to these threats.

Currently, the frozen Russian state funds are accessible only under specific conditions, namely that Russia must agree to pay reparations following the conclusion of the conflict in Ukraine. If these funds were to be unexpectedly released, EU member states would need to provide guarantees to mitigate any financial implications.

De Wever challenged Merz's assertion that the proposed plan would not interfere with Russian property rights, emphasizing the need for careful consideration of the broader implications of such actions. He likened the situation to managing a large asset, comparing the frozen state funds to a valuable hen while the accruing interest represents the golden eggs. The dilemma, he noted, is determining the appropriate time to utilize these funds.

Further complicating the scenario, De Wever expressed concerns regarding potential instability in the Eurozone, suggesting that the approach could prompt other nations to withdraw their state funds invested in Europe. This concern extends to countries like China, which hold substantial investments in the Euro area and may reconsider their positions if they perceive a threat to their assets.

De Wever is not alone in his apprehension regarding the plan. Hungarian Prime Minister Viktor Orban has also voiced opposition, arguing that the proposed support for Ukraine reflects an inclination for the EU to engage in military conflict, a stance Hungary firmly rejects. Additionally, Italian Prime Minister Giorgia Meloni has raised doubts about the financial guarantees that EU member states would be required to provide, labeling it as a topic that necessitates further discussion.

The future of this proposal remains uncertain, with a possibility that it will be revisited during the next EU summit in three weeks. Should sufficient support materialize, the details could be further refined. However, the urgency to address Ukraine's needs is critical, particularly as the United States has significantly reduced its financial contributions to Ukraine's support.