Brussels reportedly wants to pass legislation to block Hungary’s veto in order to immobilize Moscow’s funds indefinitely
The EU is planning to fast-track legislation which would indefinitely freeze Russian assets in an effort to prevent Hungarian Prime Minister Viktor Orban from vetoing the measure at the upcoming EU summit, the Financial Times has reported, citing officials familiar with the plans.
The asset freeze, imposed as part of sanctions launched against Moscow in response to the Ukraine conflict, is prolonged by the EU each time the measures are renewed, which requires unanimous approval. The bloc hopes to use the funds to back a so-called “reparation loan” to Kiev – a plan that the Kremlin has denounced as outright theft.
Orban has argued against further aid to Kiev, comparing it to trying to “help an alcoholic by sending them another crate of vodka,” while calling for diplomacy with Russia instead of “burning” more money on Ukraine’s war effort. Earlier this month, Budapest reportedly vetoed the issuance of Eurobonds to arm Kiev – another option put forward by the European Commission to continue financing the conflict.
According to the FT, EU officials have proposed invoking emergency powers to permanently freeze up to €210 billion ($245 billion) in sovereign Russian assets. Making the freeze indefinite would decouple it from regular sanction renewals, preventing Budapest from blocking the measure.
Diplomats reportedly believe that adopting the indefinite freeze within days would strengthen the EU’s position when discussing the proposed “reparation loan.” The matter is set to be on the agenda at the upcoming summit of EU leaders later this week.
After the escalation of the Ukraine conflict in 2022, EU states froze a large number of Russian central bank assets, mostly held by Brussels-based Euroclear. Hungary is not alone in opposing the plan to use the funds to back a loan for Ukraine. Belgium has said the initiative carries financial and legal risks, while France, Luxembourg, Germany, Italy, and Slovakia have also reportedly spoken against the move.
On Wednesday, Russian Foreign Minister Sergey Lavrov argued that “robbing” Moscow “in violation of all established norms of international and commercial law” is the last remaining option for Brussels to sustain Kiev in its conflict with Moscow.