Europe’s Ukraine funding quagmire – POLITICO

GOOD MONDAY MORNING. This is Nick Vinocur. Gabriel Gavin will be holding the Playbook pen on Tuesday.

DRIVING THE WEEK: GRAPPLING WITH BELGIUM’S ‘NO’       

EUROPE GETS BOGGED DOWN ON UKRAINE FINANCING: EU leaders are getting ready to review legal proposals on how to keep Ukraine financially afloat by midweek. However, the path ahead is looking more fraught than ever as the depth of Belgium’s objections to using Russia’s frozen assets sinks in. 

Pointing the finger: In comments to Playbook, Belgian Foreign Minister Maxime Prévot doubled down on the objections of his boss, Prime Minister Bart De Wever, to the so-called reparation loan, taking aim at leaders and officials who insist that using Russia’s assets is the only credible path forward. 

It’s not me, it’s you: Prévot said the EU’s failure to find a clear way to financially support Ukraine by now is not Belgium’s fault but a product of the bloc’s “obstinacy” in insisting on using the Russian assets “without knowing how to do it nor understanding the risks that come with it.”

The Trumpian line: Prévot went on to describe the reparation loan as a problem for ongoing peace talks aimed at  ending the war in Ukraine: “It is now clear that the assets can play an important role in a peace plan … Our action must not create obstacles to a peace plan.” 

Staying the course: Asked whether the Commission was still working on the reparation loan, despite Belgium’s objections, a spokesperson said: “Yes — as one of the options put forward in [the] options paper shared by President Ursula von der Leyen.” Brussels was continuing to consult on the loan with member states including Belgium, the spokesperson added. 

Merz stays firm: That chimes with comments from German Chancellor Friedrich Merz, who told a press conference on Friday that he “understand[s] the concerns [from Belgium] … but we also have good arguments to achieve a common goal of exerting as much pressure as possible on Russia to end this war.” 

Fear and loathing: Yet diplomats and EU officials who spoke to Playbook over the weekend voiced concern about the tone, timing and public nature of De Wever’s letter — as well as his insistence that the reparation loan could be an obstacle to peace. “It definitely had a note of finality,” said one diplomat. 

Trump at the wheel? That last argument is particularly concerning, the diplomats said, given that it flies in the face of the EU strategy of increasing pressure on Russia — and seems to align with U.S. President Donald Trump’s more Moscow-friendly stance. “There are members of the [U.S.] administration who want to do business with Russia,” said an EU official. “The assets thing doesn’t work for them.” Asked if Belgium had been in touch with the Trump White House  regarding the loan, a foreign ministry spokesperson said they had “no information about such contacts.” 

Suspicious vibes: Yet tensions are only due to get worse. A POLITICO story citing five diplomats who questioned how Belgium was using tax proceeds from the assets was the talk of the town in recent days. “Every diplomat other than the Belgian ones are talking about the money they are making from them,” said the same EU official. 

FAC defense: Such mutterings are due to hang over a gathering of defense ministers that kicks off in Brussels at 9 a.m. Top EU diplomat Kaja Kallas will preside over the Foreign Affairs Council meeting and give a press conference at 2 p.m.

Mission improbable: EU leaders are now preparing for an uphill slog in coming weeks as they pore over the Commission’s legal proposal and race to come up with a solution in time for the next European Council gathering on Dec. 18-19. All options on the table — raising debt for Ukraine; using the EU budget; and tapping Russia’s assets — have their weaknesses. But failure is not an option. “It will be extremely difficult,” said one of the diplomats. “There is no easy way out.” 

EUCO headlock: It will ultimately rest with European Council President António Costa to ensure that a solution is found in December, the same diplomat added. “It will be up to Costa to put the ball in the net at EUCO. You lock the doors and say: ‘You don’t leave until you have a solution.’” 

UKRAINE LATEST: U.S. Secretary of State Marco Rubio said there was “more work to be done” to achieve a peace deal between Ukraine and Russia, despite productive talks with Kyiv’s new chief negotiator Rustem Umerov in Florida on Sunday. Trump’s special envoy Steve Witkoff is traveling to Moscow for talks with the Kremlin, while Ukrainian President Volodymyr Zelenskyy (who spoke to von der Leyen over the weekend, per her spokesperson) is heading to Ireland for his first official visit, according to Sky News.

PLAYBOOK INTERVIEW       

JUSTICE COMMISSIONER WARNS ON RUSSIAN IMPUNITY: Trump’s rush for a peace deal at almost any price contains one risk that has been underreported so far: that Vladimir Putin and other senior Russian figures currently wanted over alleged war crimes will evade justice. That, at least, is the take of EU Justice Commissioner Michael McGrath, in an interview with POLITICO’s Tim Ross. 

Welcome back, Vlad: Let’s not forget that the original 28-point blueprint for a deal put forward by the Trump administration included the promise of a “full amnesty for actions committed during the war” and set out plans to reintegrate Russia into the world economy, including with long-term deal with the U.S. 

Not so fast: McGrath told POLITICO that “we must avoid” the risk that Russia will dodge prosecution for war crimes, effectively setting a new red line for a deal. “I don’t think history will judge kindly any effort to wipe the slate clean for Russian crimes in Ukraine.”  

The next Ukraine: “They must be held accountable for those crimes and that will be the approach of the European Union in all of these discussions,” McGrath said. “Were we to … allow for impunity for those crimes, we would be sowing the seeds of the next round of aggression and the next invasion. And I believe that that would be a historic mistake of huge proportions.”

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MONNET’S GHOST       

WHAT WOULD JEAN DO? How can Europe pull itself out of its current predicament of being sidelined on Ukraine peace talks while staring down the barrel of economic decline? Playbook caught up with the grandson of Jean Monnet for some insight on how the European Union’s founding father would have approached today’s challenges. 

First movers: Jean-Marc Lieberherr, head of the Jean Monnet Institute, says the top priority should be learning to move quickly. Monnet’s philosophy, he says, was “to be the earliest one … with your proposals if you want a chance to get the result that you want.” On Ukraine: “We are lagging behind. Even if you question the US approach, they came first and anchored the discussion.”  

Selfless outsiders: The EU needs to empower behind-the-scenes operators who have the freedom to move quickly and boldly. “[Monnet] came from outside the system; he had this idea that true change must be driven from the outside. He saw politicians as short-termist by nature, egotistical by nature. You need someone from outside.” 

External pressure: Donald Trump has embraced political outsiders, for better or worse, by tasking special envoy Steve Witkoff and his son-in-law Jared Kushner to lead thorny negotiations on Ukraine and the Middle East. Monnet, Lieberherr says, was cut from a similar cloth. “Today, we don’t have people like this, that politicians are ready to listen to.” 

Think small; be practical: Europe needs to learn how to think small and practically. Mario Draghi’s tome of recommendations to fix the EU and avoid a “slow agony” in economic terms is all well and good, Lieberherr says, but its lengthy list of tips offers no hint of how to get results. “The Draghi report is 500 priorities. It is impossible to move on all of them. What you need is one — and a method to get there.” 

Monnet’s superpower, per his grandson, was that he could identify practical, achievable aims that wouldn’t alienate politicians, like unifying Germany and France’s Coal and Steel sectors. Today, Europe’s urgent need is on defense; Monnet would most likely have focused on a high visibility project — like the Franco-German plans to develop a fighter jet — to get the ball rolling, says Lieberherr. 

Sell it: The EU’s current focus on “competitiveness” as its priority may describe a real need, but it’s a PR disaster. Leaders should come up with better arguments for why people need to back European approaches that are not couched in bureaucratic, off-putting language.  

The price of timidity: Leaders need to reconcile with a sense of sacrifice. Currently, EU leaders are so terrified of the populist right that they shy away from any moves toward integration for fear it will blow up in their faces. “Monnet came up with the method. Schuman had the courage. Where is it today? Who, at EU level and member state level, has the courage?” 

IN OTHER NEWS       

SERAFIN IN THE LION’S DEN: You could hardly think of a more unwelcome guest in Viktor Orbán’s Hungary than Piotr Serafin. Nevertheless, the EU budget commissioner — who is keeping billions of EU funds for Hungary frozen because of the country’s democratic backsliding — will be touring Budapest today. The Polish commissioner will give a speech at the Hungarian Integrity Authority, a body that polices how EU funds are spent, and meet its president Ferenc Pál Biró, along with Hungary’s European Union Affairs Minister János Bóka.

Yes, that authority: Earlier this year Pál Biró was placed under investigation over minor graft allegations that he claimed were politically motivated. In his speech, Serafin is expected to convey the EU’s support for the public body and defend its independence. 

RIGHT GEARS UP FOR BRUSSELS BATTLE: A high-profile summit of leading “proud patriots and national conservatives” is back in Brussels this week, after last year’s event sparked protests, political opposition from local mayors and a move by police to shut the meeting down altogether. The two-day conference, billed as a “Battle for the Soul of Europe,” kicks off on Wednesday just outside the EU quarter at The Claridge, the organizers told Gabriel Gavin — the same venue that was forced to shutter the summit in 2024. 

Attendee list: Hosted by MCC Brussels, the favorite think tank of Hungarian Prime Minister Orbán, attendees will hear from controversial former Czech President Václav Klaus, French far-right activist Alice Cordier and British commentator Matthew Goodwin. Orbán’s chief of staff, Balázs Orbán, will speak alongside Hungarian MEP and Patriots for Europe Foundation President András László. In a preview out this morning, organizers say they will fight “the Brussels establishment” to ensure the summit can go ahead, this time around, in the name of free speech.

ALTERNATIVE ELECTION STRATEGY: The far-right Alternative for Germany has tried moderating its image by promoting media-friendly figures and downplaying open extremism to boost the likelihood of victory next time round. Nonetheless, my POLITICO colleagues Pauline von Pezold and Gordon Repinski found the slicker style to be more a matter of optics than substance.

AGENDA       

— Foreign Affairs Council (defense) in Brussels chaired by EU High Representative Kaja Kallas; starting at 9 a.m.; press conference expected at 2:30 p.m. Watch. 

— EU–Kazakhstan Cooperation Council in Brussels, also chaired by Kallas and the Minister of Foreign Affairs of Kazakhstan Yermek Kosherbayev. More here. 

— Employment and Social Policy Council (employment and social policy). More here. 

— Defense Commissioner Andrius Kubilius attends the Foreign Affairs Council; meets Lithuania’s Defense Minister Robertas Kaunas, Italy’s Defence Minister Guido Crosetto and Ukraine’s Defense Minister Denys Shmyhal.  

— Commission President Ursula von der Leyen receives Deutsche Bank CEO Christian Sewing. 

— European Parliament President Roberta Metsola is in Nicosia, Cyprus; meets with President Nikos Christodoulides at 5:10 p.m.; meets with members of the Cypriot government at 5:35 p.m.; joint press conference with Christodoulides expected at 7:15 p.m. 

— Trade Commissioner Maroš Šefčovič is in Copenhagen, Denmark for a conference on the future of EU trade policy; participates in the COSAC plenary on trade and economic security; meets Danish Foreign Minister Lars Løkke Rasmussen. 

— Fisheries Commissioner Costas Kadis meets EBCD Director Despina Symons; meets Italy’s Civil Protection and Maritime Policies Minister Nello Musumeci and representatives of Federpesca.

— Commission Executive Vice President Teresa Ribera travels to Paris and Rome; holds meetings with Gina Cass-Gottlieb, from Australia’s ACCC, and Singapore’s CCCS CEO Alvin Koh in Paris; delivers speeches at the OECD Global Forum on Competition in Paris; delivers a speech at the closing session of the Italy-Spain Dialogue Forum in Rome; meets Italian President Sergio Mattarella in Rome. 

— Budget Commissioner Piotr Serafin is in Budapest, Hungary; attends the Converging Roads of Integrity 2025 conference; meets President of the Integrity Authority Ferenc Pál Biró; meets EU Affairs Minister János Bóka.  

— Youth Commissioner Glenn Micallef meets the U.N. Secretary-General’s Special Representative for Children and Armed Conflict Vanessa Frazier. 

BRUSSELS CORNER       

WEATHER: High of 7C. Partly cloudy.  

REMEMBERING HANS DE BRUIJN: The longtime secretary-general of the International Press Association, Hans de Bruijn, died on Sunday at the age of 75, API-IPA said in a statement. The Dutch journalist spent 37 years at the Netherlands Press Association, many of them as a correspondent in Brussels, before joining API-IPA, which he served “quietly, patiently and with unwavering commitment.”

BRIGHT BRUSSELS: The 10th edition of Bright Brussels will illuminate the city’s historic district from Feb. 12–15, featuring immersive light installations, family-friendly activities, and a new culinary program showcasing local chefs and producers. Key sites include Parc de Bruxelles, Mont des Arts, Place Royale, the Museum of Musical Instruments and La Monnaie. More here.    

BIRTHDAYS: MEP Sergey Lagodinsky; former MEPs María Soraya Rodríguez Ramos, Martina Michels and Seb Dance; Julie Kjestrup of Velux; Vytautas Grubliauskas, former mayor of Klaipėda; Handelsblatt Media Group’s Neelam Cartmell; former CEO of Oracle Safra Catz; Alat’s JS Kim; Former President of the Swiss Confederation Ulrich “Ueli” Maurer. Great Union Day in Romania. 

THANKS TO:  Playbook editors Alex Spence and James Panichi, reporter Elena Giordano and producer Hugh Kapernaros. 

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