On September 20, 2024, it was
announced that the E.U. would “raise a €35 billion loan to support the Ukrainian
economy and military.”[1]
At a press conference next to Ukraine’s president Zelenskyy, the E.U.’s
president said, “Russia keeps targeting your civilian energy infrastructure in
a blatant and vicious way to try to plunge your country in the dark.”[2]
So the loan stood to impact the Ukrainian people directly and significantly. It
would be a shame if the principle of unanimity in the European Council would
stand in the way of the Ukrainian people being warm during the upcoming winter.
This is a very tangible way for people to grasp just how real the costs are of state
governments having vetoes over a significant number of E.U. competencies (i.e.,
enumerated powers). “The European Union is here to help you in this challenge
to keep the lights on, to keep your people warm as winter is just around the
corner, and to keep your economy going as you fight for survival,” Von der
Leyen said at the news conference.[3]
Hungary’s Viktor Orbán stood in the way, however, to securing the collateral
for a long enough period to render the loan (an any from the U.S. based on the collateral)
secure.
The loan uses Russia’s
immobilized assets as collateral, and E.U. sanctions on the assets had to be
renewed every six months by unanimity. The concern was that Hungary would use
its veto because it is the “most Russia-friendly” E.U. state.[4]
Before the announcement, the Commission had proposed alternative asset renewal
periods ranging from 36 months to five years. Tellingly, one state government announced
that it would wait until after the upcoming U.S. election before considering
the options. This made it difficult for the E.U. to give the U.S. legal
assurance that the Russian assets in the E.U. would remain frozen—that the
collateral would remain under the control of the E.U. rather than go back to
Russia. Because the collateral could not be assured going forward, the U.S.
Congress would have to approve funding for any American loan to Ukraine secured
by the collateral in Europe. Of course, the E.U.’s own loan depended on the collateral
too, so the possibility that one state government would veto an extension of
the assets being frozen meant that the E.U. risked being “on the hook” should
Ukraine fail to pay back the E.U.’s loan.
Incredibly, Andrew Moravcsik of
Princeton University spoke at Harvard on the same day as the announcement of
the E.U. loan that even though right-wing state governments in the E.U. have a
loud bark, their bite is muted, meaning that in terms of government policy the impact
is nil. He argued that they had to appease moderates to get enough support to
have any impact on actual policy. Yet Hungary’s refusal to consider any of the
longer periods to keep the Russian assets frozen in the E.U. meant that the
E.U. and U.S. had to assume more risk in lending to Ukraine. One need only
point to the refusal of Orbán’s government to pay the €200 million fine levied
by the European Court of Justice, the E.U.’s supreme court, because the
Hungarian government had violated E.U. law, and to the violation itself, plus Hungary’s
threat to bus migrants to the E.U. capital, to know that the ideology of Orbán’s
party was indeed having an impact in policy. This had hardly escaped the notice
of the Commission and the ECJ. The implication is that the E.U. could
ill-afford the principle of unanimity for any E.U. competency; Euro-skeptic
ideology could indeed impact policy at the federal level—and, yes, the E.U. had
a federal system even in 2024 of dual-sovereignty (hence the union was not an
international organization or a “bloc”). Too much sovereignty remained with the
state governments in the form of the veto that they could wield in the Council,
and the harm can be seen in the possibility that Ukrainians would not have
enough heat during the upcoming winter. Is collective action really so bad?
Should one state be able to thwart it on ideological grounds?
I submit that the E.U.’s effort is laudatory but that the E.U. itself contains its own obstacle in continuing with the principle of unanimity in the Council that represents the states. Just imagine the impact on U.S. policies if one state could defeat a measure in the U.S. Senate. Even though the E.U. had fewer states at the time, there were too many for unanimity to be at all realistic on most matters. Empire-scale unions inevitably have states that differ from each other culturally and ideologically. Majority voting and qualified majority voting accommodate this fact, whereas the principle of unanimity does not.
1. Jorge Liboreiro, “EU
to Raise €35 Billion Loan for Ukraine Using Russia’s Frozen Assets, Von der
Leyen Says,” Euronews.com, September 20, 2024.
2. Ibid.
3. Ibid.
4. Ibid.
