Brussels
AP
—
The European Union on Friday indefinitely froze Russian assets in Europe to prevent Hungary and Slovakia, which have Russia-friendly governments, from blocking billions of euros from being used to aid Ukraine.
The EU has used special economic emergency procedures to block Russia’s assets until it abandons its war against Ukraine and pays for the enormous damage it has caused to its neighbor over almost four years.
EU Council President Antonio Costa said in October that European leaders “committed to locking up Russian assets until Russia ends its war of aggression in Ukraine and compensates for the damage caused. Today we have fulfilled that promise.”
This is a key step that will allow EU leaders to consider at next week’s summit how to use tens of billions of euros in Russian central bank assets to underwrite huge loans to help Ukraine meet its financial and military needs over the next two years.
Costa, who will chair the Dec. 18 summit, added: “The next step: securing Ukraine’s fiscal needs for 2026-27.”
The move also prevents assets, estimated to total around 210 billion euros ($247 billion), from being used to negotiate an end to the war without European approval.
The 28-point plan, drafted by special envoys from the United States and Russia, stipulated that the EU would release frozen assets that could be used by Ukraine, Russia and the United States. The plan, which surfaced last month, was rejected by Ukraine and its European backers.
Hungarian Prime Minister Viktor Orban, Russian President Vladimir Putin’s closest ally in Europe, accused the European Commission, which drew up the decision, of “systematically raping European law”.
The bulk of the funds, about 193 billion euros (about $225 billion) at the end of September, are held at Euroclear, a Belgian financial clearinghouse.
The funds were frozen under sanctions the EU imposed on Russia on February 24, 2022 over the war it started, but these sanctions must be renewed every six months and must be approved by all 27 member states.
Hungary and Slovakia oppose further aid to Ukraine.
Friday’s decision is based on a provision in the EU treaties that allows the EU to protect its economic interests in certain emergency situations, does not prevent the rollover of sanctions, and facilitates the use of assets.
Prime Minister Viktor Orban said on social media that this would mean “the end of the rule of law in the European Union and the start of European leaders putting themselves above the rules.”
“The European Commission is systematically raping European law. It is doing this in order to continue the Ukraine war, a war that it clearly cannot win,” he wrote. He said Hungary “will do everything in its power to restore legal order.”
Slovakia’s Prime Minister Roberto Fico said in a letter to Costa that he refuses to support any move “including the burden of Ukraine’s military expenses in the coming years.”
He warned that “the use of frozen Russian assets could directly jeopardize U.S. peace efforts, which directly rely on the use of these resources to rebuild Ukraine.”
But the commission claims the war imposes significant costs, including soaring energy prices and stunting economic growth in the European Union, which has already provided nearly 200 billion euros ($235 billion) in aid to Ukraine.
Belgium, where Euroclear is based, opposes the “reparation financing” plan. It said the plan “involves consequential economic, financial and legal risks” and called on other EU countries to share the risks.
Meanwhile, Russia’s central bank announced on Friday that it had filed a lawsuit in Moscow against Euroclear for damages caused by Moscow being banned from managing its assets. Euroclear declined to comment.
In a separate statement, the central bank said the EU’s broader plan to use Russian assets to aid Ukraine was “contrary to international law and illegal” and violated the “principle of sovereign immunity over assets.”
