Four days after the “incident” with Russian aircraft in the airspace of Estonia, the prime minister of this country Kristen Michal sits in the conference room on the third floor of a government building. Through windows reaching from floor to ceiling, there is a view of the Old Town in Tallinn with its streets and walls. In the distance you can see the Baltic Sea, which is a steel gray on this autumn day. What happened in the sky over Estonia caused a great stir in this small country.
– We can already see a new quality here – says Michal Kristen in an interview with “Die Welt”. This is a very diplomatic wording. The invasion of Russian fighters into the Estonian airspace – and thus a violation of NATO territory – the Estonia government calls the “incident”. As part of it, three MiG-31 aircraft burst into the Estonian airspace over the Gulf of Finnish and remained there for 12 minutes. At the news of this, Italian aircraft rose into the air and forced them to retreat – Estonia has no fighter aircraft.
Michal seems less determined than his predecessor Kaja Kallas, currently the highest diplomat of the European Union. Despite this, he demands a harder position towards Russia. And he has a specific idea of how to hit the Kremlin painfully.
Michal does not want to shoot down Russian aircraft, and political means seem difficult to apply. Brussels is unlikely to impose high duties on important recipients of Russian oil, especially India and China, as suggested by US President Donald Trump.
EU tender balance
Estonians demand something different – confiscation of Russian assets frozen in the EU. “We have to use this money,” says Michal. – It is Moscow that should cover the costs of damage in Ukraine, not European taxpayers. A moment later he goes a step further. – It would also be advisable to impose duties on Russian goods after the war, if there is no funds for reconstruction [Ukrainy] – says.
In 2022, the EU froze EUR 210 billion (PLN 896 billion) from the Russian Central Bank, most of which are in the Belgian deposit of Euroclear securities. The European Commission under the leadership of Ursula von der Leyen shall transfer interest from these assets to Ukraine. Some European governments would gladly provide Kiev with the entire amount, but others – including German – warn that this would violate international law and destroy confidence in the European financial market.
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There are only a few precedents of such activities. One occurred in 2003 – the United States then confiscated part of the Saddam Hussein estate, but they did it with the support of the UN Security Council. In the case of Ukraine, there is no such consent. So Europe has found itself in a difficult situation. The confiscation of Russian funds seems to be too delicate, and interest from them is not enough. In the first half of this year, Kiev received about EUR 10 billion (PLN 42.7 billion), but according to the World Bank, the reconstruction of Ukraine may cost over EUR 500 billion (2.1 trillion). So many times more.
A new plan of the European Commission
The commission therefore proposes a compromise. He wants to use frozen Russian funds as a loan security for Ukraine. Kyiv would pay him back only when Russia ends the war and pays compensation. EU countries intend to discuss this issue in the coming days. Germany has already agreed – in the article for “Financial Times” Chancellor Friedrich Merz appealed to about “new impulse “and” effective pressure “to force Russia to negotiate. He called for a non -percentage loan of EUR 140 billion (PLN 597 billion) “without interference in the ownership structure”.
However, this idea also has its drawbacks. If Brussels had to release the assets of the Moscow Central Bank or Ukraine for some reason, would not be able to pay off the loan, the EU countries would have to enter the action. Commission officials, however, consider this not unlikely. They claim that sanctions will probably remain in force for a long time. Ultimately, it all boils down to the assumption that Vladimir Putin will not regain access to billions of kept in Belgium so quickly.
However, it seems to be the maximum what you can do. This week, the highest EU authorities once again rejected the possibility of confiscation of frozen Russian money. – We must respect international law and investors' trust in the European market – said the chairman of the European Council Antonio Costa in an interview with “Wett am Sonntag”. – We examine the possibilities of increasing profits from frozen assets, and at the same time keeping them at the time after the conclusion of a peace agreement to finance the reconstruction of Ukraine – said Costa.
The European Parliament also supports the proposal to use frozen Russian assets as a security for a reparation loan. – However, I do not understand why the commission allowed so much time to pass. This step should be taken a long time ago – said CSU Markus Ferber MEP. “The more important it is now that this process is finally initiated,” he added.
I’m Ashley Davis as an editor, I’m committed to upholding the highest standards of integrity and accuracy in every piece we publish. My work is driven by curiosity, a passion for truth, and a belief that journalism plays a crucial role in shaping public discourse. I strive to tell stories that not only inform but also inspire action and conversation.
