Even though the U.S. has compromised
the health of its federal system by consolidating so much governmental sovereignty
with the Union at the expense of the reserved and residual sovereignty of the
states, pitfalls exist at the other extreme too. In the E.U., as long as the
states can exercise their sovereignty in foreign policy without respect to the
Union, the risk exists that any one state could put its distinct political and
economic interests first even if that forestalls united action that the EU
could muster on the world’s stage. The risk is aggravated when government officials
of a state presume to speak for the entire Union as if they were federal
officials. That undercuts the point of having a union of states. The adage, Either
we all sail together or we are done for, seems not well known in the state
capitals, and even in the European Council and the Council of the European
Union.
In early September, 2025, days
after E.U. President von der Leyen publicly reopened the matter of using Russian
financial assets frozen in the E.U. to pay for Ukraine’s defense and
reconstruction, Maxime Prévot, a government official in the state of Belgium
told the media that “confiscating those Russian sovereign assets is really not
an option for Belgium.”[1]
Most of the €200 billions of frozen Russian funds was “held in the Euroclear
depository which is subject to EU financial markets regulation.”[2]
So even though “Prévot said breaching the rules even in the case of an
existential war would leave Belgium and the EU exposed” as risky places for countries
to deposit funds, it was the E.U. rather than Belgium to decide on whether to
change the financial regulations.[3]
It was for the E.U. rather than for a self-interested state such as Belgium to
weigh whether making an exception would in Prévot’s words, “create huge bad
impact, systemic consequences for the credibility of the European financial
services.”[4]
At the time, Belgium was not in charge of the European financial
services. Even as Belgian officials sought to protect banks in Belgium, the
E.U. was in a better position to weigh the risks to future deposits of sovereign
wealth funds by other countries against the geostrategic risks should Russia
take over Ukraine, and perhaps then look to some eastern E.U. states to invade
next. Protecting Belgian banks should not outweigh the strategic interests of
the E.U. in pushing back Russia’s President Putin from helping himself to
Eastern Europe.
This is essentially an argument
that more governmental sovereignty in foreign policy should be delegated to the
E.U. from its states, and that state economic interests should not be allowed
to forestall such policy. Putting the interests of a part above those of the
whole is usually self-defeating, for the dominance of a part can come at the
expense of the good of the whole when a united front is needed. Prévot could certainly
express his view, but he could not speak for, much less direct, the regulation
of the European financial services sector. Moreover, geopolitical interests in
international relations and foreign policy do not reduce to what is best for
financial regulation.
2. Ibid.
3. Ibid.
4. Ibid.
