European Commission makes 11th-hour offer to win Belgian backing for Russian asset loan

BRUSSELS — The European Commission is offering a legal fix to allay one of Belgium’s deepest fears of a nightmare scenario that could unfold if €140 billion of Russian assets frozen in Brussels are used as a loan to Ukraine.
The Commission wants the 27 EU member countries to agree to lend the immobilized billions to Kyiv at a European Council summit this month. Belgium is resisting, however, over its concerns that it will be on the hook if the cash has to go back to Russia.
Five diplomats and EU officials said a legal framework was now being drawn up to avoid that from happening. A full proposal on the loan is expected on Wednesday.
Belgium's ultimate fear is that the €140 billion could be lent to Ukraine and then a single pro-Russian EU country, such as Hungary or Slovakia, could veto the renewal of the EU sanctions regime against Moscow. That would mean Belgium immediately having to send the missing billions back to Russia.
The Commission's fix to keep Belgium happy is to avoid one EU country being able to overturn sanctions. Currently Hungarian Prime Minister Viktor Orbán has the power to do exactly that, as sanctions require unanimity and must be renewed every six months.
The Commission now sees a way round this. It wants to resort to a clause in Article 122 of the EU treaty, which allows governments to decide “in a spirit of solidarity between Member States, upon the measures appropriate to the economic situation.”
The Commission wants to interpret this to mean that the financial stakes are so high in this case that a qualified majority of nations will be able to approve a sanctions roll-over, robbing Hungary of a potential veto. One of the diplomats said this strategy was a way "to secure Belgium's backing."
The EU’s lawyers agree the fluid language of Article 122 can justify overhauling the unanimity requirements because of a reversal of the sanctions would wreak havoc on the European economy. It could also be used to extend the vote on the sanctions renewals from the current six-month timeframe to three years, said the diplomats briefed on the discussions.
Time is now of the essence because failure to reach an agreement will leave Ukraine on a shoestring budget to fight Russian forces before its coffers run dry in April. The alternative is for EU taxpayers to shoulder the cost of Ukraine's war, while Moscow's sanctioned billions remain untouched.