BRUSSELS — The Netherlands is seeking to restart talks on using up to €210 billion in frozen Russian assets to help Ukraine keep defending itself next year.
The Dutch finance minister, Eelco Heinen, canvassed support among EU peers on Tuesday during a debate behind closed doors in Brussels, six diplomats and EU officials who were at the meeting of EU finance ministers, known as the Economic and Financial Affairs Council (Ecofin), told POLITICO.
Reviving the discussion over Russian assets risks reopening a fraught legal, commercial and political debate late last year that saw Belgian Prime Minister Bart De Wever stare down the European Commission over concerns that his country would be on the hook to repay the billions of Russian funds housed in Brussels if Moscow attempted to claw back the money.
The likes of Bulgaria, France, Italy and Malta also harbored concerns over the European Commission’s proposal to use the frozen state assets to fund Ukraine, while the European Central Bank consistently warned that tapping the immobilized funds could deter other governments from doing business in the eurozone.
Heinen’s push comes even though Brussels has yet to send a single euro from a €90 billion loan, backed by the EU budget, that 24 EU leaders agreed on in December to provide Kyiv over the next two years. The loan will only cover two-thirds of Ukraine’s forecasted budget shortfall until 2027.
The European Commission is lobbying Canada, the U.K., the U.S. and Japan to stump up the rest, though it’s unclear whether Washington will commit further funds under the administration of President Donald Trump.
The EU leaders settled for the €90 billion lifeline after meeting fierce resistance from Belgium over plans to use the cash value of Russian assets to buttress Ukraine’s costly defense. Some €185 billion of the Russian assets are under the stewardship of the Brussels-based financial depository Euroclear, making the Belgian government fearful of Russian retaliation at home and abroad.
De Wever previously demanded that EU capitals provide unlimited financial support as an insurance policy against any reprisal from the Kremlin — a request deemed impossible. His Cabinet did not respond to requests for comment.
The last-minute loan agreement in December ensured Kyiv’s immediate cash needs would be taken care of. But diplomats and officials within the Commission are under no illusion that Kyiv will need more money if Moscow continues to wage its war.
The EU must keep financing Ukraine’s fight unless it’s prepared for Russian President Vladimir Putin to emerge victorious from the four-year war. But back-to-back crises have had a bruising effect on the public purse, further exasperated by economic fallout from the conflict in Iran.
The EU could keep issuing joint-debt to support Ukraine, or leaders could return to the Russian assets debate, which has raged since Putin invaded Ukraine in Feb. 2022. The Dutch and Northern European countries would prefer the latter, especially as the Commission never withdrew its original proposal to leverage the Russian assets.
“We don’t comment on things that were said in a private setting,” a spokesperson for the Dutch government said. “The European Council agreed last December that the Union has committed to immobilize the assets until reparations are received by Ukraine and reserves its right to make sure of the assets to repay the loan, in full accordance with EU and international law. Our position remains in line with this agreement.”
Hopeful estimates
Kyiv’s budget shortfall was forecast to be around €71 billion this year and €64 billion in 2027. That estimate, however, assumes that the war will end this year, a prospect that few believe will materialize.
Diplomats are waiting to see whether the International Monetary Fund will provide fresh estimates on Ukraine’s financial health once its staffers return from their latest mission to Kyiv in June, as part of the Fund’s own loan agreement with Kyiv.
Until then, Commission officials are focusing their efforts on agreeing on a “memorandum of understanding” with Kyiv on how to spend the €90 billion loan this year and next. The first tranche from this year’s €45 billion lump sum is due in June after Hungary withdrew its veto over the loan, following Péter Magyar’s victory over Viktor Orbán in the country’s national elections last month.
The Hague contacted certain EU capitals ahead of Tuesday’s Ecofin to gauge how much support the minister would get during the debate. Estonia, Latvia, Lithuania and Finland backed Heinen’s calls. Others remained silent, conscious of how politically contentious the discussion became last year in a race to prevent Ukraine’s war chest from running bare.
“We support [Heinen’s calls] too, but didn’t speak up,” one of the diplomats said on the condition of anonymity to speak freely. “This will come back by year-end.”
The Commission and the IMF did not immediately reply to a request to comment.
Dutch reignite push to tap frozen Russian assets for Ukraine war effort
Source: Viral Showbiz Pinay
0 Comments