Meloni's plot twist complicates the EU's use of Russian money and the Mercosur agreement.

BrusselsGiorgia Meloni, despite being the leading far-right figure in the European Union, is a completely reliable ally on the blog. Initial doubts about her commitment to the European project quickly vanished, and in fact, she has become one of the most influential leaders in the corridors of Brussels, especially on immigration issues. However, her recent about-face regarding the use of Russian funds frozen in the EU to finance Ukraine and the trade agreement with Mercosur—Argentina, Brazil, Uruguay, Paraguay, and Bolivia—threatens to complicate this Thursday's European summit in the Belgian capital.

The country that jams to allocate that Russian money in the form of a loan In Kyiv, it's Belgium. Around 85% of these funds are held in a deposit in Brussels, at Euroclear, and Bart De Wever's government fears the potential legal and economic consequences this initiative could have for its country. In fact, it's a measure that raises legal concerns, and the Bank of Russia has already filed a complaint with the Russian courts regarding the permanent freezing of these funds. Therefore, Belgium is requesting legal guarantees and that, in the worst-case scenario, the EU as a whole, not just Belgium, jointly assume the cost of returning the money to Russia.

The first time Brussels put this option on the table, several member states expressed reservations, including Germany and France. However, the European Commission has gradually convinced the vast majority of governments, which want to continue helping Ukraine while avoiding further financial strain. Apart from Belgium, the only opposing partners were the pro-Russian states of Hungary and Slovakia.

However, Italy signed a letter with Belgium, Malta, and Bulgaria criticizing the member states' urgent approval of the definitive freezing of these funds, which until now had been extended every six months. This edition was used to prevent Hungary and Slovakia from vetoing their blocking in the future, given that the funds are intended to be used to help Ukraine.

Meloni is not opposed to using Russian funds to finance Ukraine, but criticized their permanent freezing through an expedited process and the intense pressure exerted on De Wever. A similar ambivalence was displayed regarding the final ratification of the Mercosur trade agreement, over which he holds the key.

The never-ending agreement

Negotiations with Mercosur began 25 years ago, and when it seemed that the deal was already closed.Some member states are threatening to derail it. France and Poland, both partners with the most powerful agri-food industries on the blog, have always been opposed. The pact will remove tariffs on 91% of products and argues that, for example, opening up to the Argentine beef market could harm the competitiveness of the European meat sector. These two states—plus other smaller ones, like Austria—on their own do not constitute a large enough minority to defeat the agreement, but Italy's support would prevent it from reaching the required supermajority in the EU. In other words, Meloni is once again the deciding factor.

The agreement was scheduled to be ratified this week, and the President of the European Commission, Ursula von der Leyen, and the President of the European Council, António Costa, were to sign it definitively this Saturday at an official ceremony in Iguazu, Brazil, with Mercosur leaders. However, Meloni is now asking for more time to reassess the agreement and consult with Italian farmers. It's worth remembering, however, that the Italian government is divided: one faction, led by Antonio Tajani (of the European People's Party), is in favor, while another, led by the far-right Matteo Salvini, is against it. EU diplomatic sources warn that hesitation from France or Italy could jeopardize the agreement and caution that patience is running out on the other side of the Atlantic. In this regard, Brazilian President Lula da Silva has been the most adamant, asserting that if the pact isn't finalized this weekend, Brazil will not sign it while he is president. Mercosur is not on the agenda for Thursday's European Council meeting in Brussels, but it has emerged as one of the central themes of the summit, and diplomatic sources assume it will be discussed unofficially. They even suggest it could be finalized late Friday or Saturday at the level of ambassadors from EU member states. Negotiations on the use of frozen Russian funds are also expected to be long and difficult, and will be the first item officially addressed by the 27 European heads of state and government, immediately after Ukrainian President Volodymyr Zelensky speaks in person.