The European Commission is accelerating negotiations with the Belgian government to provide Kyiv with a crucial €140 billion reparations loan as spring approaches and Ukraine runs out of money. Politico.
Belgian Prime Minister Bart De Wever is known to be focused on the country's budget crisis, and the European Parliament will likely have a vote on the reparations loan, which will slow down its approval.
"The final round of negotiations on the proposed loan, which will be secured by frozen Russian state assets held in Belgium, will culminate on Friday morning, when senior officials from the Commission's economic and budgetary departments will try to reassure the Belgian leadership that all financial and legal risks associated with the loan will be eliminated," — they add in the material.
At the same time, De Wever is slowing down the provision of a planned EU mega-loan to Ukraine. Ukraine is currently facing a budget deficit of about $60 billion for the coming years, not including spending on supporting the army.
If the allocation of these funds is not agreed upon, the bloc's leaders will be forced to turn to their own coffers to support Ukraine's defense against the Russian occupiers.
“The Commission’s task is to allay De Wever’s fears that Belgium will be forced to pay Moscow its debts if the war ends, or that Kremlin lawyers will successfully sue his government for using frozen assets held by the Brussels-based financial depository Euroclear,” — Politico emphasized.
One official, speaking anonymously, told the publication that talks at all levels on this issue will take place in the coming days.
"However, the talks come at a time when De Wever is facing a political dilemma in his country. The parties that make up his government are engaged in tense negotiations, trying to agree on the country's budget and fulfill the coalition's promise to cut spending by 10 billion euros," — clarified in the material.
What happens if Belgium agrees?
Once Belgium gives the green light to transfer such funds to Ukraine, the Commission will formally propose legislation on the reparations loan in the coming weeks, two officials told Politico.
Two other EU officials familiar with the plans told reporters that parliament would likely also be involved in drafting the legislation, which could drag out the process and jeopardize the Commission's hopes of securing 140 billion euros by April, when Kyiv could run out of money.
"The longer we delay, the more difficult it will be to resolve this issue. This may raise questions about possible interim solutions, etc. So the sooner the better," — Economic Affairs Commissioner Valdis Dombrovskis told reporters in Sofia (the capital of Bulgaria) on the sidelines of a conference.
At the same time, a more difficult task is to eliminate the threat of a veto on EU sanctions by countries that are sympathetic to Russia, namely Hungary and Slovakia.
“The Commission is considering a legal loophole that would allow it to freeze Russian state assets until Russia ends the war and pays reparations to Ukraine. Otherwise, the EU must unanimously re-apply its sanctions against Russia every six months. Unfreezing Russian assets would force Euroclear to transfer all sanction funds back to the Kremlin,” — summarized in the publication.
