The Belgian government, however, rejects the proposal outright. Foreign Minister Maxime Prévot has warned that the text presented by the Commission does not address Belgium's fundamental concerns and, in his words, creates "a frustrating feeling that no one is listening to them".
Belgium fears legal disputes, retaliation from Moscow and risks for Euroclear itself, which could face huge financial consequences. Brussels is therefore demanding legally binding guarantees from other member states, but these have not yet been forthcoming.
Prime Minister Bart De Wever has even warned that the use of frozen Russian assets during the war could jeopardise peace negotiations. In a letter to Commission chief Ursula von der Leyen, he described the proposed system as "fundamentally flawed".
ECB rejects guarantees and Commission seeks alternative solutions
Tensions have been exacerbated by the decision of the European Central Bank (ECB) to refuse to provide guarantees for a loan based on frozen Russian assets.
The ECB warned that this would exceed its powers and provide direct financing to Member States, which its mandate forbids. Moreover, the Bank's internal analysis showed that the mechanism proposed by the Commission went beyond its remit.
Following the ECB's rejection, the Commission had to start preparing alternative solutions that would provide rapid liquidity. These are intended to cover Ukraine's needs at least in the first months, if a political agreement can be found at Member State level.
Legal risks and a divided Union
Euroclear has repeatedly warned that the proposed mechanism could be interpreted as confiscation of assets. According to its management, this could trigger a wave of lawsuits, undermine the confidence of international investors and even increase the cost of sovereign funding in Europe.
Several member states, including Slovakia and Hungary, have already announced that they will not support the model of using frozen assets. They argue that this would be a step on the edge of international law, while also drawing attention to the ongoing corruption problems in Ukraine.
Germany is trying to maintain the unity of the Union. Foreign Minister Johann Wadephul said Belgium's concerns are legitimate, but he believes a solution can be found if the allies act together.
The December leaders' meeting will be crucial, where they will vote on the most sensitive parts of the initiative.
(reuters, swag)
