The European Union on Friday indefinitely froze Russia’s assets in Europe to ensure that Hungary and Slovakia, both with Moscow-friendly governments, can’t prevent the billions of euros from being used to support Ukraine.
Using a special procedure meant for economic emergencies, the EU blocked the assets until Russia gives up its war on Ukraine and compensates its neighbor for the heavy damage that it has inflicted for almost four years.
EU Council President António Costa said European leaders had committed in October “to keep Russian assets immobilized until Russia ends its war of aggression against Ukraine and compensates for the damage caused. Today we delivered on that commitment.”
It’s a key step that will allow EU leaders to work out at a summit next week how to use the tens of billions of euros in Russian Central Bank assets to underwrite a huge loan to help Ukraine meet its financial and military needs over the next two years.
“Next step: securing Ukraine’s financial needs for 2026–27,” added Costa, who will chair the Dec. 18 summit.
The move also prevents the assets, estimated to total around 210 billion euros ($247 billion), from being used in any negotiations to end the war without European approval.
A 28-point plan drafted by U.S. and Russian envoys stipulated that the EU would release the frozen assets for use by Ukraine, Russia and the United States. That plan, which surfaced last month, was rejected by Ukraine and its backers in Europe.
French Foreign Minister Jean-Noël Barrot wrote on X that the EU decision means that “no one will decide in place of the Europeans the use of these funds.”
Hungary and Slovakia object
The vast majority of the funds — around 193 billion euros ($225 billion) at the end of September — are held in Euroclear, a Belgian financial clearing house.
The money was frozen under sanctions that the EU imposed on Russia over the war it launched on Feb. 24, 2022, but these sanctions must be renewed every six months with the approval of all 27 member countries.
Hungary and Slovakia oppose providing more support to Ukraine, but Friday’s decision prevents them from blocking the sanctions rollover and make it easier to use the assets.
Hungarian Prime Minister Viktor Orbán – Russian President Vladimir Putin’s closest ally in Europe – said on social media that it means that “the rule of law in the European Union comes to an end, and Europe’s leaders are placing themselves above the rules.”
“The European Commission is systematically raping European law. It is doing this in order to continue the war in Ukraine, a war that clearly isn’t winnable,” he wrote. He said that Hungary “will do everything in its power to restore a lawful order.”
In a letter to Costa, Slovak Prime Minister Robert Fico said that he would refuse to back any move that “would include covering Ukraine’s military expenses for the coming years.”
He warned “that the use of frozen Russian assets could directly jeopardize U.S. peace efforts, which directly count on the use of these resources for the reconstruction of Ukraine.”
But the commission argues that the war has imposed heavy costs by hiking energy prices and stunting economic growth in the EU, which has already provided nearly 200 billion euros ($235 billion) in support to Ukraine.
Belgium, where Euroclear is based, is opposed to the “reparations loan” plan. It says that the plan “entails consequential economic, financial and legal risks,” and has called on other EU countries to share the risk.
Russia takes court action
Russia’s Central Bank, meanwhile, said on Friday that it has filed a lawsuit in Moscow against Euroclear for damages it says were caused when Moscow was barred from managing the assets. Euroclear declined to comment.
The Belgian clearing house has around 17 billion euros ($20 billion) in Russia and it’s unclear what would happen to that money if the legal challenge or others like it succeed.
In a separate statement, the Central Bank also described wider EU plans to use Russian assets to aid Ukraine as “illegal, contrary to international law,” arguing that they violated “the principles of sovereign immunity of assets.”
But EU Economy Commissioner Valdis Dombrovskis brushed off the suit, saying that the decision is “legally robust,” and that he expects Russia “to continue to launch speculative legal proceedings to prevent the EU from upholding international law.”
Chris Weafer, CEO of Macro-Advisory Ltd. Consultancy, said that the timing of the court action is “clearly linked” to the EU’s intention to use the frozen assets.
“The Russian Central Bank is making clear that it will respond with legal actions against all countries involved in the decision to take the Russian money,” he said.
Friday’s EU decision came hours after Germany summoned the Russian ambassador in Berlin following allegations of sabotage, disinformation campaigns, cyberattacks and interference in its elections.
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Associated Press journalists Karel Janicek in Prague, Sylvie Corbet in Paris, Katie Marie Davies in Manchester, England and Stefanie Dazio in Berlin contributed to this report.
