How Belgium’s De Wever derailed the EU’s ‘insane’ €140B Ukraine loan plan

BRUSSELS ― The European Union’s €140 billion loan for Ukraine remains in doubt ― and looks set to be for at least another two months ― after the prime minister of Belgium dug his heels in over using confiscated Russian assets to pay for it.

Belgium ― one of the EU’s founding six members and renowned for its love of the art of the classic European compromise ― succeeded in massively watering down language published at a summit in Brussels. The result does little besides postponing the decision over whether to go ahead with the plan until the next time leaders meet. And it renews concerns over the bloc’s commitment to Ukraine.

The prime minister in question, Bart De Wever, is a right-wing Flemish nationalist who is under pressure over the plan at home because he says the operation carries huge financial and legal risks for Belgium, where most of the Russian assets are kept. EU chiefs say they understand his concerns ― but they couldn’t find a way to reassure him.

“It’s a bit sour for me that we are finger-pointed, now, as the unwilling country,” De Wever told reporters. He described the idea of Belgian taxpayers ending up on the hook as “completely insane.”

Donald Trump’s ambiguous attitude to how to deal with Moscow’s invasion of Ukraine, despite this week sanctioning Russia’s two biggest oil companies, has put the onus on Europe to bolster its support. While Europe’s governments and the European Central Bank long considered unthinkable using Russian assets to arm and rebuild Ukraine over fears it would break international law, it emerged as a real prospect in the past few months as the war has dragged on.

The EU on Thursday was hoping to give the European Commission a firm mandate to make a legal proposal outlining the loan as early as next week. De Wever ensured that didn’t happen.

‘Sufficiently balanced’

A full day of frantic negotiations saw talks break up without agreement at one point ― only for leaders to return later in the evening after their advisers worked on compromise language. De Wever allowed the final summit statement to say that he wouldn’t stand in the way of the Commission further exploring the assets confiscation idea. That was hardly the stuff Kyiv dreamed of.

It is “a sufficiently balanced text to allow interpretations that respond to all needs and sensibilities so everyone will then give a certain interpretation that’s good for themselves,” said an EU diplomat briefed on the discussions, who spoke on condition of anonymity because the talks were in private.

Few were able to conceal the fact that the outcome raises renewed questions about the EU’s fragile support for Ukraine with the conflict nearing its four-year anniversary. 

The assets plan “hasn’t been buried,” French President Emmanuel Macron told reporters. “We were able to discuss technical details.” No other funding options were on the table for Ukraine aid, he said. ECB President Christine Lagarde, told leaders that the risks associated to the loan are “manageable.”

With Belgium signaling that it felt uncomfortable with the plan, national and EU diplomats spent many days in the runup to the summit trying to find legal language to reassure De Wever and still give the Commission the instructions it would need to plow ahead with the idea.

ECB President Christine Lagarde, told leaders that the risks associated to the loan are “manageable.” | Will Oliver/EPA

But while those previous drafts of the summit statement, even as late as the morning of the summit, explicitly called on officials to put forward a legal proposal ― effectively a signal that the plan was likely to become a reality ― the wording leaders ended up with merely “invites the Commission to present, as soon as possible, options for financial support,” and punting the issue to the next summit. That’s scheduled for December, but officials didn’t rule out an earlier meeting. 

‘Negotiating for weeks’

The stakes seemed too high for De Wever given that the bulk of Russia’s immobilized assets in Europe are held by the financial firm Euroclear, which is registered in Belgium, the diplomats said. 

He repeatedly told his counterparts that the operation carried huge financial and legal risks for Belgium, they said.

A clue to De Wever’s stubbornness is that he is embroiled in inconclusive talks to agree on a budget to bring Belgium’s finances back in balance. 

De Wever rejected an 11th-hour compromise that would have envisaged stronger language in favor of the loan, according to four EU officials. 

“We agreed on the what, now we have to work on the how,” Commission President Ursula von der Leyen told reporters.

Faced with the Commission’s reassurances that the financial operation carried little risk, Belgian diplomats replied in internal EU meetings that a plane had little chance of crashing — but if that happens, tens of people still lose their lives, said two diplomats with knowledge of the talks. 

Complexities

During the past weeks, Belgian officials have repeatedly called on the Commission to paper over the most sensitive aspects of the loan together bilaterally — and were left incensed when EU officials refused to do so. 

“My feeling is that the friends from the Commission underrated the complexities of this very sophisticated financial construction,” said one of the EU diplomats. “This underrating is the reason why Belgium is worried.”

The EU’s late-night compromise allows everyone to save face ― and leaves De Wever with the power to veto any future actions if they don’t meet his red lines. 

If “Russia can actually claim the money for whatever reason … the cash needs to be there immediately,” De Wever said, adding “trust in the entire financial system of Europe” would be at stake.

“Who’s going to give that guarantee. I asked my colleagues, ‘Is it you? Is it the member states?’ … This question was not answered with a tsunami of enthusiasm around the table.”

Gerardo Fortuna contributed reporting.