EU Devises a Plan to Circumvent Hungary’s Block on Frozen Russian Assets for Ukraine

The European Union has devised a legal maneuver to circumvent Hungary’s veto on arms procurement for Ukraine via the leverage proceeds from frozen Russian assets this year.

According to an interview with the Financial Times, EU’s chief diplomat, Josep Borrell, explained that since Hungary abstained from a previous agreement on using revenues from frozen Russian assets for weapons procurement, it should not participate in decisions regarding the use of these funds. Borrell described the workaround as complex but effective, noting it involves legal considerations.

EU foreign ministers are set to discuss this maneuver in Luxembourg on Monday. Borrell also mentioned that Brussels had proposed a deal similar to one NATO made with Hungarian Prime Minister Viktor Orban last week: Budapest would refrain from actions supporting Ukraine in exchange for not vetoing measures by other alliance members. However, Hungary declined this proposal.

Borrell stated that Hungary’s position appears linked to its strong ties with Russia. The maneuver, by bypassing Hungary’s veto, could also remove obstacles that might hinder G7 efforts to secure a $50 billion loan for Kyiv by December. Nevertheless, officials caution that Hungary still retains the ability to block EU sanctions, which maintain frozen Russian assets.

Earlier on June 24th, Josep Borrell, the European Union’s High Representative for Foreign Affairs and Security Policy, announced during a meeting of EU foreign ministers in Luxembourg that the first tranche of assets from Russia, totaling €1.4 billion, would be directed to Kyiv.