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A controversial vote under dubious legal circumstances is set to herald a new era in which Brussels destroys its own reputation
It is crunch time for Ursula von der Leyen and her Brussels-based cabal who have attempted to bend and break EU law in order to force through a dubious legal claim for the use of sovereign Russian wealth to further fund Ukraine’s military. Kiev is long past broke, owes the EU some €45 billion and faces a fiscal shortage of €70 billion for the next year, and is suffering a slow and painful frontline collapse.
Moscow has long described the EU’s attack on its assets as “theft,” the IMF and European Central Bank both oppose the move, and the ratings agency Fitch has already issued a downgrade warning to Euroclear, the clearing house at centre of the scandal.
The stakes
Von der Leyen, along with her compatriot German Chancellor Friedrich Merz, have managed to bring what is widely regarded as a potentially disastrous initiative to an EU vote under dubious circumstances which, if it fails, will leave the two German politicians’ reputations in ruins.
Merz has been at the megaphone this week while von der Leyen has pressed the flesh with bloc members. In the past 48 hours, the former chairman of the Blackrock Germany board has declared the ‘pax Americana’ is over, compared Russian President Vladimir Putin to Adolf Hitler (Merz’s grandfather was a Nazi), and warned of direct NATO-Russia conflict.
However, it could be worse. If the vote to use Russian assets to finance Kiev’s military is passed, it will permanently damage the EU’s reputation, spell the end of any Russia-EU cooperation for decades while triggering a global legal onslaught.
A slew of cases will be opened in the bloc, not least by Belgium, which has protested against the EU attempts to get its hands on some €180 billion of Russian sovereign wealth held in the Belgian clearing house Euroclear.
Russia has also begun legal proceedings in a Moscow arbitration court for damages. Some €280 billion in EU assets presently in Russia could be seized in retaliation for the European attack on Russia’s funds, as well as a wave of litigation potentially targeting all complicit institutions in every major global financial hub.
Death and “pax Americana”
The European option also ignores the military reality in Donbass and Ukraine, by seeking to pour billions into continuing a war that Kiev is undoubtedly losing. US President Donald Trump’s team, however, have proposed a different mechanism which Russia has not outright rejected, by which the Russian funds in question are used for an investment vehicle. Such a mechanism could have a very positive impact on the investment climate in a post-conflict Ukraine, given the rampant and endemic corruption associated with the country and in particular Vladimir Zelensky’s inner circle.
Effectively what we are witnessing is the European Union rejecting Washington while trying to force on Kiev a militaristic future which only promises years of warfare. The US, which let us remember initiated this entire round of diplomacy, has a proposal on the table that could secure a stable and lasting peace, offer security guarantees to all parties involved, and have a positive impact on the investment climate in a country that will need unprecedented investment.
The Spin
While you may have read that the European Union has already taken an indefinite hold over Russia’s assets in lieu of reparations to Ukraine, neither of these claims is true.
The EU has misused article 122 of its constitution to assert a temporary hold over Russian assets for as long as they can prove that the conflict in Ukraine poses or threatens to pose an economic risk to the bloc. There is no indefinite freeze on Russian assets for reparations to speak of.
Belgian Prime Minister Bart de Wever has spoken of the EU “stealing” Russian assets. Hungarian Prime Minister Victor Rueben has already described the EU tactics as “a declaration of war.” Slovakia’s Robert Fico, who was shot at close range by a pro-Ukraine activist, has claimed Brussels is only “prolonging the war.” Czech Prime Minister Andrej Babis has also refused to support financing Ukraine.
Italy, Malta, and others are also said to be firmly against the plot to steal Russia’s assets and are advocating for a different option.
The vote
Though the matter is regarded as a foreign policy issue involving the assets of a non-member of the bloc and would normally require unanimity to pass, von der Leyen has managed force a vote under qualified majority voting.
This means that 15 of the 27 member states, and/or states representing 65% of the EU’s population must vote in favor in order to pass the ruling. Eight votes against could be enough to force von der Leyen to have to go back to EU taxpayers, already suffering and drifting to the left and right, to seek lining for Ukraine’s donated war chest.
Should the reparations loan option be defeated or removed from the table, the joint debt option, whereby EU member countries must borrow money for Ukraine, to be repaid by the countries themselves, will arise, requiring unanimity to pass.
Either way, it looks like Brussels could lose.
Voting is scheduled to take place before 13:00 GMT.
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