Europe now faces a stark choice forced by its disastrous war policy against Russia: either allow the EU to successfully move toward a centralized state over the heads of its member states, risking a mass Eurexit that may or may not succeed in reaction to that gamble, or delay the larger crisis through member states quietly accepting one of several schemes that will cripple the economy and create social strife regardless. The Union must decide whether to use frozen Russian sovereign assets to finance a €140 billion “reparation” loan for Ukraine, or to issue joint debt through Eurobonds. Both paths carry severe legal risks and impose heavy costs on citizens: one through contingent liabilities, the other through immediate taxes, austerity, and political instability. Pushing through the Eurobond option would amount to a structural coup, a radical re-engineering of the EU against its current form. A recent Politico piece framed these in terms of Option A and B, which helps to contrast these two potential ways forward.
Commission President Ursula von der Leyen’s scheme from the European Commission reveals the depths of EU tyranny in its failed gambit to defeat Russia and guarantee investment outcomes in Ukraine. SAFE, (Security Action for Europe), a €150 billion defense loan program, was initially proposed in March by von der Leyen with the goal of stimulating rapid defense investment. By May, EU ministers had given their final approval to the program, without consulting the European Parliament, provoking a suit from the Parliament. Whether or not the Eurobond or Russian asset-seizure (theft) scheme is being proposed in light of (perhaps) likely-to-succeed challenges to the SAFE loan program, or if the Commission is trying to actually raise a total of nearly €300 billion, remains to be seen. What is certain is the push for SAFE comes chronologically after there was significant push-back from EU member states and ministers themselves on the feasibility of spending seized/frozen Russian assets (including interest on the moneys, for war against Russia, or anything else). And the Commission push for this Eurobond scheme comes after the EU Parliament presented a suit against SAFE.
What the Eurobond scheme and SAFE both have in common, nevertheless, is the mechanism for implementation, recklessly assuming authority to do so under a radically broadened interpretation of its powers re Article 122 TFEU.
The Commission is using threats to force member states to spend the frozen Russian assets. Refuse and each government faces a political crisis. Eurobonds are deeply unpopular because the mutualized debt falls on the population, leading to the overturning of governments at the ballot-box, and imposing them unilaterally would break EU treaties, leading to an emboldened Eurexit movement. Member states are being pushed to approve the use of unlawfully seized assets, completing the illegal expropriation through their own consent.