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Morally, the decision facing the European Council in Brussels this week has been a no-brainer. Russia invaded Ukraine illegally and unilaterally. Moscow shows no sign of wanting peace. It actively threatens other countries too, including Britain. Ukraine is running out of money. Yet £184bn worth of Russian assets remain frozen in Europe, notably in Belgium. That money should therefore be mobilised to fund Ukraine. To many, this would be the enactment of a clear and present duty, proof positive that Europe can still be a heavy hitter.
In the messy reaches of the real world, however, things have not been straightforward. Law, economics and politics all managed to insinuate themselves, sometimes venomously, into the intense buildup to Brussels. Reparations can have lethal political consequences. Seizure of assets will undoubtedly face legal challenge. It is also bitterly opposed by Donald Trump, who wants the unfreezing of assets to form a key part of his pro-Russian peace plan. Mr Trump is pressing hard for a quick deal, and US and Russian negotiators are poised to meet again in Miami at the weekend.
The EU has worked hard to come up with a funding plan for Ukraine that mobilises the value of the assets without simply transferring them to Kyiv. Their loan proposal is ingenious and, in its supporters’ eyes, both legal and essential. It will never be seen that way in Moscow or Washington. Several EU states still opposed it as the summit began. Belgium, in particular, was on a knife-edge. Bond markets may punish states for taking on part of the risk. Millions of voters suffering cost of living pressures may balk at such megabuck deals too.
And what wider precedent might be set by such moves? The cold truth is that this ultimately depends on the outcome on both the battlefield and at the diplomatic level. There is no magic bullet that can end this conflict and it cannot be assumed that an EU loan based on Russian assets will be a complete gamechanger either. It is not as if nearly four years of sanctions have brought the Russian economy to its knees as originally hoped, thanks in large part to oil sales to the likes of China and India.
Longer-term consequences matter too. If the loan goes through but fails to help turn the tide for Ukraine, it could be much harder for Europe to claim the moral high ground in any future standoff, such as over Taiwan. Europe’s otherwise admirable attempt at solidarity might in fact end by opening a global Pandora’s box of even more ruthless economic nationalism. There are no easy wins to be had here.
The potency of all these questions, plus a host of others that are equally difficult to resolve, explain three large things. First, they tell us why this week’s European summit, which continues on Friday, is so massively important for Ukraine. Second, they underline why it is at least as important, though in a different existential way, for the future of the EU. Third, and unsurprisingly, it makes clear why there was no early consensus in Brussels in the first part of the summit.
Overshadowing everything, however, is a reality that remains true whatever decision emerges in Brussels. Without the activation of the Russian assets, the west cannot continue much longer to bankroll a war that may soon enter its fifth year. It is why, on so many fronts, this is the moment of truth.
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