EU freezes Russian assets indefinitely to prevent Hungary and Slovakia from vetoing their use for Ukraine.

The European Union has taken a significant step in its ongoing support of Ukraine by freezing Russian assets located within its borders indefinitely. This decision, announced on Friday, aims to preclude Hungary and Slovakia—two countries perceived to have favorable relations with Moscow—from obstructing the utilization of substantial financial resources to aid Ukraine amidst the ongoing conflict.

Employing a specialized procedure designed for economic emergencies, the EU has blocked around 210 billion euros (approximately 7 billion) in Russian assets until Russia concludes its military operations against Ukraine and compensates for the extensive damage inflicted over nearly four years. The freeze will remain in effect until a comprehensive resolution is reached, aligning with the EU’s commitment to ensure these funds are utilized exclusively for Ukraine’s recovery and support.

European Council President António Costa emphasized that the EU leaders had pledged to keep Russian assets immobilized until a cessation of hostilities and reparations from Russia are secured. Costa noted that this decision is pivotal in enabling the EU to draft financing strategies for Ukraine, particularly concerning financial support through a substantial loan to address military and economic needs over the forthcoming two years.

The decision also poses a barrier to using Russian assets in negotiations to conclude the conflict without explicit European approval, thereby strengthening the EU’s strategic stance. A previously discussed 28-point plan between U.S. and Russian officials that proposed using these frozen assets has been firmly rejected by Ukraine and its European allies.

Hungarian Prime Minister Viktor Orbán, a noted ally of Russian President Vladimir Putin, has criticized the EU’s actions, claiming that the European Commission’s decision violates legal standards and undermines the rule of law within the union. This sentiment was echoed by Slovak Prime Minister Robert Fico, who expressed strong opposition to using frozen assets for Ukraine’s military expenses, cautioning against potential destabilization of ongoing peace efforts.

The funds, primarily held at Euroclear, a Brussels-based financial clearinghouse, were frozen under sanctions imposed by the EU in response to Russia’s aggression beginning on February 24, 2022. These sanctions are subject to biannual renewal and require consensus among all 27 EU member states. The indefinite asset freeze is grounded in EU treaty provisions invoked during economic emergencies, effectively preventing Hungary and Slovakia from impeding future sanctions renewals.

Moreover, the Central Bank of Russia has initiated legal actions against Euroclear, contending that its assets are wrongfully managed contrary to international law, asserting claims of sovereign immunity. As the situation develops, it remains clear that the EU’s strategic maneuvers concerning Russian assets will continue to influence both financial support to Ukraine and regional political dynamics.

This bold action reinforces the EU’s commitment to addressing the ongoing crisis while navigating political disagreements within its ranks.