BRUSSELS (AP) — The European Union on Friday indefinitely froze Russian assets in Europe to ensure that Hungary and Slovakia, both with Moscow-friendly governments, cannot prevent billions of euros from being used to support Ukraine.
Using a special procedure intended for economic emergencies, the EU has frozen assets until Russia abandons its war with Ukraine and compensates its neighbor for the heavy damage it has caused for nearly four years.
EU Council President António Costa said European leaders pledged in October “to keep Russian assets frozen until Russia ends its war of aggression against Ukraine and compensates for the damage caused. Today we fulfilled that commitment.”
It is a key step that will allow EU leaders to work out at a summit next week how to use tens of billions of euros of Russian Central Bank assets to underwrite a huge loan to help Ukraine meet its financial and military needs over the next two years.
“The next step: securing Ukraine’s financial needs for 2026-2027,” added Costa, who will chair the Dec. 18 summit.
The move also prevents the assets, estimated at around 210 billion euros ($247 billion), from being used in any negotiations to end the war without European approval.
A 28-point plan drawn up by US and Russian envoys called for the EU to release frozen assets for use by Ukraine, Russia and the United States. That plan, which emerged last month, has been rejected by Ukraine and its backers in Europe.
French Foreign Minister Jean-Noël Barrot wrote on X that the EU’s decision means that “no one will decide for the Europeans the use of these funds”.
Hungary and Slovakia object
The vast majority of the funds — about 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 the EU imposed on Russia over the war on February 24, 2022, but these sanctions must be renewed every six months with the approval of all 27 member countries.
Hungary and Slovakia oppose giving more support to Ukraine, but Friday’s decision prevents them from blocking sanctions and facilitating the use of assets.
Hungarian Prime Minister Viktor Orbán – Russian President Vladimir Putin’s closest ally in Europe – said on social media that it meant “the rule of law in the European Union is ending and European leaders are placing themselves above the rules”.
“The European Commission is systematically violating European law. It is doing this to continue the war in Ukraine, a war that clearly cannot be won,” he wrote. He said Hungary “will do everything in its power to restore a legal order.”
In a letter to Costa, Slovak Prime Minister Robert Fico said he would refuse to support any move that “would include covering Ukraine’s military spending for the coming years.”
He warned “that the use of frozen Russian assets could directly jeopardize US peace efforts, which directly rely on the use of these resources for the reconstruction of Ukraine.”
But the Commission says the war has imposed high costs by raising energy prices and stalling economic growth in the EU, which has already provided nearly 200 billion euros ($235 billion) in aid to Ukraine.
Belgium, where Euroclear is based, opposes the “repair loan” plan. It said the plan “involves consistent economic, financial and legal risks” and called on other EU countries to share the risk.
Russia is acting in court
Meanwhile, Russia’s central bank said on Friday it had filed a lawsuit in Moscow against Euroclear for damages it says were caused when Moscow was barred from managing assets. Euroclear declined to comment.
The Belgian clearing house has about 17 billion euros ($20 billion) in Russia, and it is unclear what would happen to that money if the legal challenge or others succeed.
In a separate statement, the Central Bank also described the EU’s wider plans to use Russian assets to help Ukraine as “illegal, contrary to international law”, arguing that they breached the “principles of sovereign asset immunity”.
But EU Economy Commissioner Valdis Dombrovskis dismissed the suit, saying the decision was “legally sound” and that he expected Russia to “continue to launch speculative legal proceedings to prevent the EU from complying with international law”.
Chris Weafer, CEO of Macro-Advisory Ltd. Consultancy, said the timing of the court action is “clearly linked” to the EU’s intention to use the frozen assets.
“The Russian Central Bank makes it clear that it will respond with legal action against all countries involved in the decision to take Russian money,” he said.
The EU’s decision on Friday came hours after Germany summoned Russia’s ambassador to Berlin over allegations of sabotage, disinformation campaigns, cyber attacks and interference in its elections.
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Associated Press reporters Karel Janicek in Prague, Sylvie Corbet in Paris, Katie Marie Davies in Manchester, England and Stefanie Dazio in Berlin contributed to this report.