Belgium does not often find itself in a position of resisting European legislation, whatever the subject. But that’s exactly what it’s doing now.
Last week at a European Union summit, Belgium fought a plan supported by a majority of member states to use 140 billion euros in frozen Russian assets—held at Euroclear in Brussels—as the basis for a reparation loan for Ukraine. To the frustration of many, Belgium held out, on the grounds that as the host country of the funds it faced legal uncertainty and financial liability. This forced European heads of state and government to postpone a decision until at least December.
Some other countries and the European Central Bank sympathize with these arguments. Belgium does not entirely stand alone. Still, this looks like a lost battle. European officials are committed to drafting a compromise proposal. Many diplomats and officials think that sooner rather than later, a deal will be clinched on this delicate matter. Why? Because Europe desperately needs money for Ukraine. And, more fundamentally, this is Europe’s only tried-and-true method for achieving big goals. In all the challenges and crises it has experienced since World War II, it has always prioritized finding an economic path to achieve political progress.
The economy is the one field in which EU member states are most willing to pool their sovereignty. Only if all economic routes are exhausted will they ever consider more political integration. Russia’s war in Ukraine, the outcome of which is of existential importance to Europe, is no different. As always, for Europe, it’s the economy, stupid.
The fact that the EU will keep working on a way to make the most of the Russian assets (the interest on those assets has already been used for Ukraine) was not the only proof of that last week. At the summit in Brussels, national leaders also adopted a 19th package of economic sanctions against Russia. The package targets “22 persons and 42 entities responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine,” including the rector of a Moscow university that offers a two-year master’s program on how to circumvent Western sanctions. Moreover, the leaders agreed on measures to target Russia’s shadow fleet in the Baltic Sea, hoping that increased EU cooperation with the flag states of those ships (such as the Comoros) can force them to finally comply with European environmental and maritime safety standards—which today they do not.
For Europe, the war in Ukraine is all about security—its own security. For many years, most Europeans did not fear Russian President Vladimir Putin because they felt protected by the United States through NATO. They felt sorry for the Chechens, Georgians, and Ukrainians suffering Putin’s murderous attacks, but they never felt their own security endangered. They assumed that Putin would not target a European country because that would risk a clash with NATO, the world’s mightiest military alliance. This certainty, however, was shattered when Donald Trump became U.S. president again in January.
Trump is ambiguous at best about U.S. security guarantees to Europe. And so, Europeans now fear Putin. They realize that if Ukraine falls, Russia will be at their doorstep. Millions of Ukrainians could then be deployed to conquer the Baltic states, which Putin also considers Russian, just as Ukrainians in the occupied Donbas are today being forced by Russia to fight against their own people.
So, if Europe wants to keep Putin and war at bay, it must ensure that Ukraine does not lose. For 80 years, the United States was Europe’s security guarantee. Now it is Ukraine. This is a fundamental shift, which poses fundamental challenges to a continent that has neglected its defense for decades and is not ready to face war.
When priorities change, choices do too. Some now say Europe will have to build its own European army. Others hope—or fear—that a European defense union will see the light soon, paired with a European security council and a powerful European foreign and security policy without the strict unanimity requirement currently weakening Europe’s resolve in the international arena. If there were ever a time to take these steps, they argue, it is now. Yet that is not very likely to happen soon. Since the Russian invasion of Ukraine, and especially under Trump’s second presidency, the main steps taken by European countries have been economic in character, not political.
Examples of this are deploying sanctions against Russia, which hit Moscow harder than U.S. sanctions because Europe traded more with Russia; slowly weaning Europe from Russian oil and gas; jointly purchasing weapons and ammunition for Ukraine; for NATO countries, investing 5 percent of GDP in Europe’s defense and security, in exchange for some U.S. political goodwill; gradually, sector by sector, integrating Ukraine into the EU’s internal market (including the electricity market and the roaming scheme, just to mention two examples); using interest on the frozen Russian assets at Euroclear for Ukraine; and investing in the European arms industry, coordinated and possibly soon co-financed by the European Commission to the tune of 800 billion euros (about $841 billion). In short, the main problem in Europe is security, but these are all economic solutions.
Does this sound strange? Well, it has always been this way. Since the European Coal and Steel Community (ECSC) was set up in 1952—when Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands agreed to place their war industries under a higher authority so they could no longer wage war against one another—peace and security have been pursued with economic means. French Foreign Minister Robert Schuman, who proposed the ECSC in 1950, understood that European governments were less resistant to economic solutions than to solutions of a political nature, which lie at the heart of national sovereignty.
In an essay in the Frankfurter Allgemeine Zeitung in April, Kiran Klaus Patel, a professor of European history at LMU Munich, pointed out that this “Schuman method” worked well in 1952. It worked again after the fall of the Berlin Wall, when the EU single market was completed. Today, it is working once more.
Sometimes, it happens against all the odds. For example, the ECSC quickly became dysfunctional due to a coal crisis. But the institution did not die. It rolled over into a partnership with the European Atomic Energy Community and European Economic Community and found a role in industrial policy and later agriculture. More top-down political integration was often less successful. The European Defense Community (which included a real European army) was rejected by the French National Assembly in 1954. The Council of Europe, which focuses on human rights, has languished over the years. After the fall of the Berlin Wall in 1989, something similar happened: Political integration under the Maastricht Treaty got off to a slow start because some governments did not want a strong “social Europe” or a strong Schengen. By contrast, Patel noted, the euro and the single market flourished. They became “the ventricles of the system: A stable currency made trade easier, and both the euro and the single market created new prosperity.”
The Schuman method also worked during the COVID-19 pandemic. This was a major crisis, affecting all of Europe, threatening to devastate the single market through border closures and national export restrictions. Public health in Europe, however, is a purely national competence. EU member states did not want “Europeanize” this. So they tackled the crisis by economic means: joint vaccine purchases and a scheme of temporary joint debt issuance to prop up economies of affected countries. It worked, again. And health policy is still as national as it was before the pandemic.
Today again, Europe seems to be reviving the Schuman plan. With the war in Ukraine becoming Europe’s war, national governments are forced to find a common solution. True to form, they do not choose far-reaching political integration: There is no move toward majority voting in foreign policy and security matters, to sending troops to Ukraine or the institutional reforms required for the EU to be able to absorb new member states. No, they throw money at it. European Council President António Costa alluded to this last Thursday: “Europe’s defense is not just about spending more. It’s about spending smarter, working together and delivering for our citizens. This is how we build Europe’s sovereignty.”
Of course, by spending together, European countries tie themselves together politically—by tying their fates together and sharing responsibility. This is, in part, the point that Belgium is trying to emphasize in the battle over Russia’s assets at Euroclear. Belgian Prime Minister Bart De Wever sees both legal and financial risks if assets of a sovereign state that should be safe in the EU’s rule of law can simply be seized. Confidence in Europe’s legal and financial systems could be undermined. Will investors start avoiding Europe, and Belgium in particular, because something similar could happen to others? And if something goes wrong, will Belgian taxpayers then have to foot the bill? That, he said, would be “completely insane.”
Still, for now, the debate is mostly about spending, and once again European countries are using the economy as a driver of integration. If Europe is level-headed and pragmatic in this regard, Patel argued in his article, things could turn out well. A political approach will only meet with resistance from EU capitals. In his view, the step-by-step, economic approach has always worked better. “In the past, many political systems have stumbled because they raised very high expectations and then everyone got disappointed,” Patel wrote. “The EU would do well to avoid this danger.”
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