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The Portuguese Minister of Foreign Affairs considered today that the “legally correct way” to use the frozen Russian resources is in the proposal that the European Commission presented today, acknowledging that “it is complex” and will require the full attention of the Member States.
“It is an issue that we have been discussing for a long time […], all the Member States [of the European Union (EU)] have shown willingness for them [the frozen Russian assets] to actually be used, what the legally correct way is is now in this proposal from the Commission and it deserves attention, a careful study, because it is a complex proposal,” Paulo Rangel told journalists.
Speaking on the sidelines of a ministerial meeting at the headquarters of the North Atlantic Treaty Organization (NATO), in Brussels (Belgium), the Portuguese official added that the majority of the 27 EU Member States want this solution and assure Belgium (one of the countries that has the most frozen Russian resources) that they want “to address the concerns expressed”.
“There is a large majority in favor of the issue of immobilized assets, because it is Russian money that would allow it to be used to bring forward reparations [to Ukraine], I would say that there is a strong preference for this solution,” the official maintained, warning, however, that “it has some legal obstacles”.
“Most of them” have already been overcome, argued Paulo Rangel.
The European Commission today proposed a controversial reparations loan based on frozen Russian assets and a smaller credit based on the budget of the European Union (EU), to support Ukraine in 2026 and 2027.
With a view to “strengthening Ukraine’s financial resilience in the context of the ongoing Russian war of aggression”, the Community executive today proposes in a statement “two solutions to respond to Ukraine’s financing needs for 2026-2027”, namely an EU loan and a reparations loan.
This proposal faces opposition from Belgium, while also raising legal doubts and prompting questions about the stability of the single currency.
While the first option would concern using the EU’s budgetary margin (headroom) as a guarantee for Brussels to go to the markets and mobilize such an amount in favor of Ukraine, the second would mean taking out loans from Community financial institutions that hold immobilized balances of assets of the Central Bank of Russia.
This latter loan would be repaid by Russia after payment of reparations to Ukraine and, in view of the legal reservations of Belgium (where a large part of such assets are located), would be accompanied by a solidarity mechanism in the Union.