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EU Moves to Freeze €210 Billion in Russian assets, circumventing Hungary’s Veto
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european Union countries are accelerating efforts to indefinitely immobilize up to €210 billion in Russian sovereign assets, a strategic maneuver designed to bypass a potential veto from Hungarian Prime Minister Viktor Orbán before upcoming EU leadership summits. This decisive action aims to bolster Brussels’ negotiating position in US-led peace discussions concerning the war in ukraine.
Bypassing Hungary to Secure Leverage
The push to swiftly enact legislation – utilizing emergency powers to override national vetoes on sanctions extensions – reflects a growing urgency within the EU.According to officials familiar with the plans, the move is intended to safeguard the bloc’s leverage as it engages in delicate peace talks. Diplomats believe that separating the issue of asset immobilization from the debate surrounding loans to Kyiv, backed by the frozen Russian funds, is crucial. The funding question itself will be addressed by EU leaders during next week’s summit.
This strategy, however, carries significant risk. Overriding the principle of unanimity in sanctions decisions could provoke strong reactions from Hungary and other nations opposed to the measure.Past instances of EU member states outvoting others on critical issues, such as migration policy involving Poland and Hungary, have created lasting tensions between capitals.
Funding Ukraine with Frozen Assets
Last week, the European Commission proposed leveraging the €210 billion in Russian foreign assets – currently immobilized under EU sanctions – to finance a loan to Ukraine, beginning with an initial €90 billion disbursement over the next two years. For this loan scheme to succeed, the underlying assets must be immobilized indefinitely, rather than subject to six-month renewal periods requiring unanimous agreement from all 27 EU member states.
Hungary, widely considered the EU’s most pro-Russia member state, has consistently opposed further aid to Kyiv and threatened to veto any extension of sanctions. EU officials express concern that Prime Minister Orbán will follow through on these threats should the administration of Donald Trump decide to unilaterally lift US sanctions on Russia. Zoltán Kovács, Hungary’s government spokesperson, stated this week that the Commission’s loan proposal “crosses every red line.”
Emergency Powers and a Statement to Washington
To mitigate the risk of sanctions being lifted, the commission is proposing the use of emergency powers – reserved for addressing economic crises – to indefinitely impose sanctions on the assets. This approach, enabled under Article 122 of the EU treaties, requires only a majority of EU countries, effectively circumventing potential vetoes.
The move also serves as a subtle message to Washington. An initial Ukraine peace plan, partially drafted by American officials, suggested directing the majority of the assets into two US-led investment funds. US officials have also urged EU capitals to refrain from taking any action regarding the assets until a comprehensive peace plan is finalized.
Belgium’s Concerns and Ongoing Negotiations
Belgium, home to Euroclear – the central security depository holding €185 billion of the Russian assets – has voiced opposition to the loan proposal, citing potential legal and financial risks. The country fears being held liable for legal claims from Russia should the sanctions be unexpectedly lifted.
Belgium has demanded “ironclad guarantees” that other member states will jointly assume liability and share the costs of any potential legal
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