EU seeks to sidestep Hungary’s veto in sending Russian frozen assets profits to Ukraine

Jun 25, 2024 - 07:09

The European Union has devised a legal workaround to bypass Hungary’s veto on using profits from Russia’s frozen assets to support Ukraine. EU chief diplomat Josep Borrell revealed this strategy, stating that since Hungary abstained from an earlier agreement to set aside the proceeds, it “should not be part of the decision to use this money,” The Financial Times says.

Hungary, known as the EU’s most pro-Russian member, consistently opposes the union’s collective military aid to Ukraine and is currently obstructing seven related decisions worth around €6.6 billion.

According to FT, Borrell said the legal loophole was “sophisticated as every legal decision, but it flies.”

This workaround may clear the way for a $50 billion G7 loan to Ukraine, intended to be paid off by future proceeds from nearly €200 billion of frozen Russian assets immobilized in the EU, mostly in Belgium.

The EU agreed earlier this year to use profits generated since February to buy arms for Ukraine.

Borrell revealed that Brussels had offered Hungary a deal similar to one NATO struck with Hungarian Prime Minister Viktor Orbán, giving Budapest an opt-out from activities supporting Ukraine. However, Hungary rejected this offer.

The legal workaround will be discussed by EU foreign ministers on Monday. While it may solve the immediate issue of using asset profits, Hungary could still block EU sanctions under which Russian assets are blocked, as this decision requires unanimous renewal every six months.

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