Friedrich Merz jets to Belgium to secure frozen Russian assets plan

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German Chancellor Friedrich Merz is making a last-ditch effort to secure crucial Belgian support for an EU plan to use frozen Russian sovereign assets to finance European military aid to Ukraine.

Merz will travel to Brussels on Friday to have dinner with Belgian Prime Minister Bart de Wever, who has become the biggest obstacle to the so-called asset-backed reparations loan to Kiev. European officials are rushing to get support for the plan before leaders discuss the proposal at a summit in two weeks.

“It’s a race against time,” said a German government insider. Another added: “Mears thinks it’s on him to take this across the line.”

The meeting comes days after European Commission President Ursula von der Leyen unveiled legal proposals for the loan, which controversially relies on emergency powers in EU treaties to keep Russian assets frozen indefinitely, and to pay the loan while overriding a potential national veto.

Merz supports the proposal and use of Article 122 emergency powers, even if Belgium remains opposed, according to people familiar with his position. A German government spokesman declined to comment on the message that Merz intends to deliver to De Wever.

In order to attend, the German leader rescheduled his first state visit to Norway, where he was scheduled to meet the King and Prime Minister Jonas Gahr Sture. Von der Leyen will also participate in the Brussels dinner.

In an article published by the Financial Times last September, the German Chancellor supported benefiting from about 210 billion euros of the Russian Central Bank’s frozen assets in Europe for the benefit of Ukraine. This represents a retreat from previous skepticism, partly due to fears that it would undermine confidence in the euro, according to people familiar with his thinking.

Carlo Massala, a professor of international relations at the University of Munich in Germany, said: “He is taking a big risk and throwing all his weight behind it.” “It shows how serious he is about this issue.”

Belgium and Euroclear, the Brussels-based clearinghouse that holds most of the assets, have threatened to block the plan without “iron-rail” guarantees that other EU countries would also bear the brunt of any financial burden or retaliation from Moscow.

Several countries, including France, have refrained from issuing national guarantees for the loan, which are necessary in the event that Euroclear is required to return assets to Moscow. The European Central Bank has refused to provide emergency liquidity to Euroclear if these guarantees are activated.

Recent talks on reaching an agreement to end Moscow’s war on Ukraine have given the debate a new urgency. Merz and other European leaders, who were excluded from the US-Russian negotiations, were concerned when they discovered that the discussions directly touched on Russian sovereign assets located in Europe, according to a number of people close to the chancellery.

Norbert Röttgen, a senior lawmaker from Merz’s CDU party, described the decision on Russian assets as “Europe’s moment of truth.” He added: “If we cannot do this [the reparations loan]What then does it say about European sovereignty and all that speaks of strategic autonomy?

For Berlin, the need to quickly secure assets and send a political signal to Moscow and Washington now outweighs legal caution, the sources said. While Berlin urged the Commission to address Belgium’s concerns, it believes there is no alternative to the loan to preserve Ukraine’s ability to repay.

Germany’s efforts are also partly due to concerns that the country, which has eased its debt curb to allow almost unlimited defense spending, risks having to bear most of the cost of supplying Ukraine with military equipment.

“We’ll end up footing the bill,” one person said.