EU unveils legal strategy to bypass Hungary’s veto on Russian asset profits

Hungary, widely regarded as the EU’s most pro-Russian member, has consistently opposed the union’s collective military aid efforts to Ukraine.

The European Union has devised a novel legal approach to circumvent Hungary’s opposition to using profits from frozen Russian assets to support Ukraine, according to EU foreign policy chief Josep Borrell. This development could pave the way for a significant financial aid package to Ukraine, despite ongoing resistance from Budapest.

Borrell revealed that since Hungary abstained from an earlier agreement to set aside the proceeds from frozen Russian assets, it should not be part of the decision to use this money, as reported by The Financial Times. Borrell describes this legal manoeuvre as sophisticated as every legal decision.

The strategy aims to unlock a potential $50 billion G7 loan to Ukraine, which is expected to be repaid using future proceeds from nearly €200 billion of Russian assets immobilized in the EU, primarily in Belgium. Earlier this year, the EU agreed to utilize profits generated since February to purchase arms for Ukraine.

Hungary, widely regarded as the EU’s most pro-Russian member, has consistently opposed the union’s collective military aid efforts to Ukraine. Currently, it is blocking seven related decisions amounting to approximately €6.6 billion in aid.

This legal workaround represents a significant shift in the EU’s approach to decision-making on matters related to Ukraine aid. It potentially sets a precedent for how the bloc may handle future instances of individual member states obstructing collective action.

The move comes at a critical time for Ukraine, as the country continues to defend itself against Russian aggression and seeks sustained international support. The EU’s ability to leverage frozen Russian assets could provide a substantial and ongoing source of aid, potentially influencing the course of the conflict.

However, this strategy is likely to face scrutiny from legal experts and potentially from Russia itself. Questions may arise about the legality of excluding a member state from decisions on the use of seized assets, even if that state abstained from earlier agreements.

As the situation develops, it remains to be seen how Hungary will respond to this manoeuvre and whether it will lead to broader tensions within the EU. The bloc’s ability to implement this strategy successfully could have far-reaching implications for its unity and effectiveness in addressing the ongoing crisis in Ukraine.

This innovative approach by the EU demonstrates the complex diplomatic and legal challenges faced by international bodies in responding to global conflicts, especially when internal disagreements threaten to hinder collective action.