Lorenzo Maria Pacini
A lot of money is needed to wage the war that the European Commission, headed by Ursula Von der Leyen, wants to impose on Europe against Russia. The question is: who pays?
A lot of money
A lot of money is needed to wage the war that the European Commission, headed by Ursula Von der Leyen, wants to impose on Europe against Russia, scheduled for around 2030. First ReArm Europe with €800 billion and then SAFE (Security Action for Europe) with €150 billion represent an astronomical and unattainable figure for a Europe now starved by thirty years of unbridled neoliberalism, uncontrolled speculation, lobbying, the imposition of the euro, and ticking time bombs.
The question is: who pays?
That is a lot of money. The EU is increasing pressure on European governments that do not want to accept funding for Ukraine by imposing a despicable blackmail, whereby they will be called upon to pay for the reconstruction of the country. Kiev wants, to begin with, a loan of €140 billion and has no intention of stopping there. How will it be repaid? This is unclear, but it is not important either: now is the time for European governments to pay up, and they cannot afford to contradict Brussels' diktats.
Now that the idea of using Russian funds frozen in Europe has been rejected, an alternative must be found. The most spendthrift countries, such as Italy and France, have too much debt; the most frugal countries, such as Germany and the Netherlands, are reluctant to accumulate more debt; Belgium and other countries opposed to the use of Russian funds could be persuaded by the alternative of a joint loan.
The EU joint loan, like the new SAFE defense program, works through the issuance of bonds by the European Commission, which raises funds on the financial markets and then grants them to beneficiary Member States in the form of long-term loans on favorable terms. These loans are granted on request and on the basis of national plans, and are linked to the implementation of joint procurement to reduce costs, with the possibility of procurement involving a single state for a limited period. One example is NextGenerationEU, which has provided €750 billion for economic recovery, partly as loans to member states that meet specific targets.
Okay, let's accept all the loan stratagems... But in the end, who pays? We are talking about approximately €950 billion to be found in a few months to rearm Europe against Russia. Seriously, where do they think they will find it? There is only one logical explanation: in the bank accounts of citizens.
A race against time
The European Union is now involved in a race against time on two fronts. On the one hand, Ukraine risks running out of funds by the end of March; on the other, making any decision could become much more complex, as Hungary attempts to ally itself with the Czech Republic and Slovakia to create a bloc skeptical of Kiev. The general perception is that this is the decisive moment.
As a result, European Commission officials are conducting a delicate balancing act to get the asset plan approved, not least because if they fail, the Euro-mania deception will be so obvious that no one will believe in the deception anymore.
Although Belgian Prime Minister Alexander De Wever warned his colleagues at the recent European summit that the Commission had underestimated the complexity of using Russian funds and the possible legal implications for Belgium, Brussels believes that his opposition will not last beyond December, when leaders will meet again.
The loan guaranteed by Russian assets seems to be the only plausible option... but we are talking about €140 billion. Where will the other €810 billion come from? Mathematics is no longer at home in Brussels.
Many EU countries have long opposed the issuance of Eurobonds, arguing that they do not want to pay the price for the debts of others and for governments unable to manage their finances properly. It is still true that the three-year period 2020-2023 has weakened this resistance, and many governments have agreed to take on joint debt to finance the war fund, which they say is intended to revive the Union's economy, only to be destroyed shortly thereafter in a conflict. Since then, Brussels has continued to mutualize part of the debt to finance various initiatives, including a recent series of loans aimed at helping European capitals win military contracts against Russia. Despite this, opposition to the extensive use of this instrument remains widespread.
Another option, a sort of "third way," involves hunting down Russian assets worth around €25 billion in other member states. However, this process would take longer than Ukraine can afford, giving the impression that Europe is losing momentum.
The legal and human costs
Most of the frozen assets are held by Euroclear, a financial depository based in Belgium, which exposes the country to significant legal and financial risks. According to the Commission, the risks for Belgium remain limited: the €140 billion frozen would only be returned to Russia if the Kremlin ended the war and compensated Ukraine, a scenario considered extremely unlikely. However, Brussels understands the concerns of Brussels (in this case, the Belgian government), which fears a wave of legal action from Russia, not least because Belgium signed a bilateral investment treaty with Moscow in 1989.
However, there are also legal risks that cannot be underestimated.
First and foremost, we are talking about property rights and international law. Russia (or its central bank) will argue that the assets remain its sovereign property and that any attempt to use them, even as collateral, would violate international law or bilateral treaties and give rise to litigation. EU leaders have described the idea as "utilization" or "immobilization" of assets rather than seizure, but this legal framework will be tested in national and international courts.
Then there is the issue of jurisdiction. The European Commission can propose instruments, but member states must agree on implementation, and some parts of foreign policy sanctions still require unanimity or complex treaty workarounds. Euroclear's role raises particular national legal exposures: Belgium has called for risk sharing by the EU, as most of the assets are located in its jurisdiction. This political/legal negotiation points to unresolved issues regarding liability and who ultimately signs the guarantees.
The contractual dimension is also difficult. The proposals aim to grant loans against interest or cash balances, or to have the loan issued at zero interest by a private or supranational intermediary (Euroclear, the Commission, or a special purpose vehicle) while maintaining formal ownership of the assets. Such structural creativity is intended to reduce the risk of legal claims of expropriation, but courts look at substance rather than form: if economic control has changed, expropriation claims could be successful. Expert analyses warn that this is a legal novelty and contestable.
Then, if we turn to accounting issues, there are problems: the Commission is looking for ways to exclude guarantees from the calculation of Member States' deficits/debt (Eurostat/accounting treatment), so that the program does not immediately worsen public deficits. However, this depends on Eurostat's technical decisions and the exact legal form of the guarantees: if the guarantees are callable or essentially transfer risk, national budgets could be affected at a later stage.
So who will bear the legal burden? The member states collectively, or Belgium or Euroclear?
Let's also talk about costs (since we're talking about spending: if the loan guarantees are called in or if litigation requires compensation, national treasuries could be called upon to intervene. Even if Eurostat initially excludes the guarantees from deficit data, future payments would be financed through taxes, spending cuts, or an increase in public debt servicing, a cost borne by citizens. Reuters and EU reports show that member states are seeking to avoid immediate accounting impacts, but not the underlying economic exposure.
Years of complex international litigation (and costly legal defenses) by Russia or private creditors are expected: taxpayers will pay for the legal teams and potential settlements. Courts could award damages or order restitution in cases of expropriation. Using high-profile reserves as collateral risks undermining confidence in the sanctity of reserves and European financial havens. This could increase financing costs for governments and businesses, indirectly raising mortgage and loan rates for households.
What is certain is that resources allocated to military spending, guarantees, and legal disputes divert public funds away from healthcare, education, and infrastructure. Smaller states could bear the brunt of the burden if risk sharing is imperfect; the distributional effects would fall unevenly on EU populations.
What if Russia wanted to use equally heavy forms of retaliation?
From a legal perspective, the concept of loan-reparation seeks to strike a balance: providing substantial funding to Ukraine while avoiding the formal confiscation of Russian sovereign assets. Such creativity reduces the initial fiscal impact, but creates potential liabilities, exposure to litigation, reputational risks for the euro, and potential indirect economic costs for European households. The extent of these costs will depend on the final legal architecture, but it is already certain that, given the impossibility for European countries to shoulder the insane cost of rearmament, it will be the poor citizens who will pay these costs.