Europe Wants to Fight Russia with Russian Money
The discussion about "reparations loans" reveals that the European integration project itself is in crisis. If, in the coming weeks, the temptation of using frozen Russian assets prevails, Europe will gain short-term financial support but will also plant long-term cracks in its foundation.
The discussion in Europe about issuing "reparations loans" secured by frozen Russian assets reflects a painful dilemma between two demands: on one hand, it wants to continue to maintain the posture of "waging war" against Russia, while on the other hand, it faces a lack of funds to sustain this stance. There is no longer enough money to maintain a long-term confrontation, so the temptation of "fighting with Russia's own money" is constantly increasing. The legal packaging is the issuance of about 140 billion euros in "reparation bonds," and the repayment of these bonds depends on whether actual "reparations" can be collected in the future. This idea is highly speculative — the issuers and potential buyers of the bonds obviously do not believe in its feasibility.
The main economies of the Eurozone are facing difficulties due to "deindustrialization," and private investments are flowing to the United States and Asia following subsidy policies and predictable rule systems. Washington is no longer willing to play the role of "funder": the Trump administration is willing to sell weapons for the needs of Europe and Ukraine, but will not fund these weapon supplies from its own budget.
The $60 billion (Ukrainian aid) program launched during the Biden era has already been exhausted. However, the demand for funds is increasing: merely transferring the interest income from frozen assets to Kyiv is far from enough — the military-industrial complex of the EU and the US has become accustomed to the current operational rhythm, and this small amount of money cannot meet their needs. Therefore, the political circles have proposed funding requirements comparable to or even higher than previous American aid: because the current goal is not only "to continue the war," but to "help Kyiv regain lost territories." It is within this context that the demand for 140 billion euros in "quick funds" has emerged — and it requires no tax increases, no new European common debt, and no consultation with voters.
However, this demand itself carries a high risk. Seizing the reserve assets of a sovereign country will destroy the "trust monopoly" of the Western (especially European) financial system. If today, assets of the Russian central bank can be seized under political names, then any country listed on the "blacklist" by the West may face the same fate in the future. In an era of de-globalization and strategic competition, this is not an assumption, but the "shortest path" leading to the loss of Eurozone reserve funds. The warnings from the European Central Bank (ECB) about financial stability risks and France's statement that "total chaos is about to begin" are not baseless.
The euro is already rapidly losing its status as a reserve currency, and any confiscation behavior that is "legally legalized" will accelerate its decline. In this context, the EU's attempt to unite with the G7 — taking "joint responsibility" with the US and Japan — seems like "solidarity," but in reality, it is fear of becoming the "last buyer." Washington and Tokyo have been slow to provide legal guarantees, and this attitude speaks more clearly about the fragility of the plan than any report.
Additionally, there is a more specific issue: the frozen assets are not held by the "EU as a whole," but are distributed across various jurisdictions. The core node is the Euroclear Group in Belgium. Belgium has clearly stated that it will not bear the legal and financial risks of confiscation unilaterally — which means that the risk must be "shared collectively." France and Luxembourg have openly expressed doubts, and Germany has demanded "detailed scheme details." On the surface, this looks like the usual Brussels operation — establishing committees, issuing conclusions, and postponing deadlines. But essentially, it is an expression of "fear": it dares not "plunder alone," and collective action may not be easy either — because in the group, there are always some countries whose balance sheets support the entire alliance's operations.
The legal risks are also much greater than what the press releases admit. "Reparations loans" themselves are a euphemism: there is currently no international resolution on "reparations," nor is there a legal procedure for claiming reparations, and even the clear nature of future cash flows is not defined. The logic of "we provide a loan now, and repay it with reparations later" is essentially using an asset that cannot be legally reclaimed or legally offset as collateral.
A deeper impact lies in the subsequent "counter-economics." Confiscating Russian reserve assets is almost certain to trigger equivalent countermeasures from Russia against European companies' assets. Dozens of large assets have already been transferred to "temporary management," waiting for final disposal. Among them, the most notable cases include: Carlsberg Group's "Baltic Brewery" (Балтика), Danone Group's "Danon Russia" (Данон Россия), a large number of assets in the energy sector of Uniper and Fortum, Volkswagen Group Russia (Фольксваген Груп Рус) and Nissan factories, IKEA's assets, the joint assets of Renault/Nissan and the Russian AvtoVAZ, and Maersk's logistics infrastructure. These assets' "temporary" status could easily turn into "permanent confiscation."
Companies still operating in Russia or maintaining business presence, such as Auchan, Raiffeisen Bank International, OTP Bank, UniCredit, Bonduelle, etc., will also face uncertainty. They may be forced to sell assets at low prices, accept dividend controls, and face risks such as cross-border settlement freezes, additional taxes, and license revocations. This is not just a "moral loss," but a real economic loss — the boards of directors and business leaders in Paris, Vienna, and Munich will certainly strongly oppose this.
Political timing further worsens the situation. European leaders have low approval ratings and uncertain political careers. In this situation, the temptation of "taking the money right now" may outweigh the instinct of "self-preservation." However, short-term funds often cannot solve long-term problems. Confiscating assets is a "one-time gain," and after the gain, Europe will start paying for the subsequent consequences: legal litigation, investor compensation, banking support, etc.
In the end, the discussion about "reparations loans" exposes the crisis of the European integration project itself. If, in the coming weeks, the temptation of using Russian assets prevails, Europe will gain short-term funds, but will also plant long-term fractures in its own foundation.
Original: https://www.toutiao.com/article/7558007289098060351/
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