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EU countries are to fast-track a decision to indefinitely immobilise up to €210bn in Russian sovereign assets, in an attempt to bypass Hungary’s Prime Minister Viktor Orbán even before Europe’s leaders meet for a summit next week.
The hurried effort to pass the legislation — which invokes emergency powers to override national vetoes on the extension of sanctions — aims to protect Brussels’ leverage in US-led peace talks over the war in Ukraine, according to officials familiar with the plans.
Diplomats handling the legislation see advantage in moving swiftly in coming days to detach the contentious question of immobilising assets from the debate on raising loans for Kyiv backed by the frozen Russian funds. That funding question will be left to EU leaders next week.
The move to vote within the coming week, overriding the principle of unanimity on sanctions decisions, risks enraging Hungary and other countries that oppose the measure. Past instances of EU countries outvoting other member states on critical issues — such as Poland and Hungary on migration policy — have caused bad blood between capitals for years.
The European Commission last week proposed using €210bn of Russia’s foreign assets immobilised under sanctions in the EU to fund a loan to Kyiv, initially for €90bn that would be disbursed in the next two years.
For the loan scheme to work, the underlying assets need to be immobilised indefinitely, rather than for six-month periods that can only be renewed with unanimous agreement of all EU27 countries.
Hungary, the EU’s most pro-Russian state, opposes any further aid to Kyiv and has routinely threatened to veto the sanctions rollover. EU officials fear Orbán would follow through on the threat if Donald Trump’s administration decided to unilaterally drop US sanctions on Russia.
Zoltán Kovács, Hungary’s government spokesperson, said this week that the commission’s loan proposal “crosses every red line”.
To bypass the risk of the sanctions being lifted, the commission has proposed using emergency powers reserved for dealing with economic crises to indefinitely impose the sanctions on the assets. Enacted under Article 122 of the EU’s treaties, it can be passed with just a majority of EU countries, circumventing potential vetoes.
Locking in the sanctions would also mark a statement against Washington. An initial Ukraine peace plan partly drafted by American officials had called for the bulk of the assets to be poured into two US-led investment funds.
US officials have also sought to dissuade EU capitals from taking any steps to use the assets before a peace plan is agreed.
Belgium, home to central security depository Euroclear, which holds €185bn of the Russian assets, has opposed the loan proposal, citing legal and financial risks. It fears being left on the hook for legal claims from Russia should the sanctions be lifted unexpectedly.
Belgium has demanded ironclad guarantees that other member states would agree to be jointly liable and share the costs of potential legal suits against it or Euroclear. The commission has addressed “almost all” of Belgium’s demands for the reparations loan, president Ursula von der Leyen said.
A spokesperson for the Belgian prime minister declined to comment.
Additional reporting by Laura Dubois in Brussels
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