German Chancellor Friedrich Merz will arrive Friday in Brussels in a bid to convince Belgium’s leadership to back a €165 billion reparations loan to Ukraine using the cash value of frozen Russian state assets held on Belgian soil.
“Chancellor Friedrich Merz will travel to Belgium tomorrow evening for a dinner meeting to speak privately with Belgian Prime Minister Bart De Wever and European Commission President Ursula von der Leyen,” a German government spokesperson told POLITICO.
Merz scrapped his travel plans to Oslo to make the trip to the EU capital after the Commission proposed a financial package to fund Ukraine’s defense against Russian forces. Time is of the essence, as Kyiv’s war chest is expected to run bare in April.
De Wever continues to oppose the initiative, as the lion’s share of the assets is under the stewardship of Brussels-based financial depository, Euroclear. He fears that Russia will retaliate against Belgium at home and abroad, and is demanding ironclad financial guarantees from EU capitals before he even considers backing the Commission’s proposal.
EU leaders are scheduled to discuss the initiative in Brussels on Dec. 18. Failure to reach a deal could force EU governments to use taxpayers’ money to ensure Ukraine’s survival.
Even so, De Wever will take some convincing, as von der Leyen is well aware after holding her own crunch talks with the Belgian leader — which didn’t succeed in moving him.
Not only does De Wever want substantial guarantees that can be paid out at a moment’s notice, but he’s demanding that other financial institutions holding Russian state assets across the bloc are held to the same standard as Euroclear.
The Belgians also fear an army of Kremlin lawyers will sue the government and Euroclear on the basis of a bilateral investment treaty that the country signed with the Soviet Union in 1989. Russia’s former president, Dmitry Medvedev, has repeatedly threatened that.
“If the crazy EU does steal frozen Russian assets for a ‘reparations loan,’ we may view it as a casus belli with all the relevant implications for Brussels & Co,” Medvedev posted Thursday on social media. “Then, these funds may have to be returned, not in court but as real reparations paid in kind by Russia’s fallen foes.”
The Commission has repeatedly downplayed Belgium’s perceived legal risks but will need De Wever’s support before going ahead with the plan. Diplomats have already begun scouring the Commission’s legal text to appease the Belgians before Dec. 18. Merz is looking to do his part, too.
“I fully understand that the Belgian government in particular, in whose country a large part of the frozen assets are located, cannot rely solely on political commitments,” the German leader wrote in an op-ed for the Frankfurter Allgemeine Zeitung after the Commission proposed the legal text underpinning the reparations loan.
“These discussions must begin immediately and be concluded quickly,” he added.
