The European Union is expected on Friday to lock up Russia’s assets held in Europe until it gives up its war in Ukraine and compensates its neighbor for the heavy damage that it has inflicted for almost four years.
The move is an important step that would 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.
Hungarian Prime Minister Viktor Orbán – Russian President Vladimir Putin’s closest ally in Europe – accused the European Commission, which prepared the decision, “of systematically raping European law.”
A total of 210 billion euros ($247 billion) in Russian assets are frozen in Europe. 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, and all 27 member countries must approve them for that to happen.
Hungary and Slovakia oppose providing more support to Ukraine.
Friday’s expected decision, which is based on EU treaty rules allowing the bloc to protect its economic interests in certain emergency situations, would prevent them from blocking the sanctions rollover and make it easier to use the assets.
Orbán 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 European Council President António Costa, who will chair the summit starting on Dec. 18, 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.
French Foreign Minister Jean-Noël Barrot described the expected move as “a major decision that will undoubtedly influence the course of the war and accelerate peace.”
“Because Europeans do not want to let anyone else decide for them ... we have decided to lock those sums (assets) for as long as necessary,” Barrot said on France Info news broadcaster.
The decision would also prevent the assets from being used in any way without European approval. A 28-point peace 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 was rejected by Ukraine and its backers in Europe.
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’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.
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.”