EU seeks to bypass Orbán and utilize Russian assets to support Ukraine

Hungarian Prime Minister Viktor Orbán is blocking the EU's plan to use €140 billion from frozen Russian assets for a loan to Ukraine, Politico reports.

Since such a decision normally requires the unanimous consent of all member states, Brussels is considering legal action that would allow for adoption by a qualified majority, thereby circumventing Orbán's veto.

A joint statement by EU heads of state and government in December 2023 confirmed that frozen Russian assets would remain untouched until Moscow ended the war. However, Belgium, where these assets are blocked via the Euroclear system, has expressed concerns about legal consequences and a possible outflow of foreign exchange reserves from the eurozone.

The proposed solution is for member states to jointly guarantee the funds provided in the form of joint guarantees. This option is to be discussed at a meeting in Copenhagen, but a decision is not expected until the end of October. Germany, Poland, and the Baltic states have already signaled their support, while France, Italy, and Slovakia remain cautious.

The EU is thus walking a fine line between providing rapid assistance to Ukraine and the risk of setting a precedent in dealing with frozen state assets.

(mja)