• According to European Commissioner for the Economy Valdis Dombrovskis of Latvia, the Bank of Russia’s assets held in the European Union, including in central securities depositories (CSDs) such as Euroclear, "are not seized and the principle of sovereign immunity is respected."

European financial institutions holding Russian public assets are "fully protected against any legal proceedings". Thus, "central securities depositories can offset any seizure in Russia with frozen or immobilized assets held here," he said on December 12. For this reason, the EU is not afraid of any future legal proceedings against Russia in international courts (cf. VIN 4408).

• However, in addition to the known opposition of Hungary and Slovakia, now Belgium, Bulgaria, Italy, Malta and the Czech Republic have also expressed concerns about ’any haste at the technical level’ that could result in the finalization of the financial package for ’reparation loans’.

• Belgium, for its part, is calling for higher guarantees than those proposed by the European Commission. This is one of the stumbling blocks in the ongoing negotiations.

• Three successive protections have been considered by the European Commission for the repayment of the "repair loan", if it were to be repaid to Russia:

 On a voluntary basis, Member States will provide public guarantees for their participation in the EU budget and will have to cover the share of non-participating countries. The European Commission has proposed to increase these guarantees to €210 billion, half of which must be materialized before any of the seized funds can be transferred to Kiev. In reality, if Russia were to file a lawsuit and win, it would be entitled to claim much more in damages.

No one therefore knows how much money would need to be covered, especially since the EU already collects and spends the interest generated by these funds. However, no one is prepared to sign a blank check.

 A second financial protection has been provided in case the first one does not work or is insufficient: a liquidity mechanism will be put in place so that a country that does not manage to provide the necessary funds can borrow them from the EU.

 Finally, a third protection will be introduced in the event that the first two fail: the possibility for the EU to provide other debt instruments allowing financial institutions to honor their financial commitment to the Bank of Russia.

• Prime Minister of Denmark Mette Frederiksen said she would vote in favor of the repair loan and urged her colleagues not to take Belgium’s opinion into account.

• According to director of the Russian Centre for Social Economy Research Alexey Zubets, if the EU has failed to confiscate Russian assets over the past three years, it is unlikely to find a solution now. There can’t be no long-term and stable funding for Ukraine at the expense of Russia.

• From the start the EU considered that Russia was in the wrong, that it was waging a war of conquest of its own making, and that it was going to lose it. It welcomed the International Criminal Court’s issuance of an international arrest warrant for Russian President Vladimir Putin and expected to bring the Russian economy to its knees.

Oblivious to the fact that Russia has been following international law, that it was applying United Nations Security Council Resolution 2202, that its army has new weapons far superior to its own, and that the Russian economy is indeed thriving.

A US recognized Russian victory could have significant financial consequences for the European Union and even ruin it.

This is the editorial from our paywalled "Voltaire, international newsletter", n°156. For more information, do not hesitate to subscribe: 500€ per year.

Translation
Gregor Fröhlich