Hungarian veto on Russian assets threatens EU loan balance
Estonia has raised concerns about the potential outcomes should EU sanctions on frozen Russian assets be lifted. A Hungarian veto on this issue threatens to transfer the responsibility for multi-billion-dollar loans to other G7 and EU countries, according to the Financial Times.
Russia is attempting to regain frozen assets that were used as collateral for loans granted to Ukraine by the European Union and the G7. These assets, valued at approximately $223 (€196) billion, are essential for sustaining financial support for Kyiv.
The Financial Times reports that forecasts suggest if Hungary, led by Viktor Orbán, blocks the extension of EU sanctions, there is a serious risk that the G7 and the EU will need to shoulder the loans secured by Russian assets.
The Estonian Minister of Foreign Affairs, Margus Tsahkna, warns, "if they are going to block it, then the sanctions will be down. And the central bank assets will be delivered to Russia, to [Vladimir] Putin, as an award. We cannot let it happen." This stance stems from concerns about the lack of unanimity among EU member states, as a decision on this matter requires unanimity, and Hungary's position could pose a significant threat, notes the Financial Times.
Belgium: Confiscation is not an option
Despite these concerns, Belgium – where most of the frozen assets are held – opposes confiscation, fearing it would breach international law and harm the euro's reputation.
Belgian Budget Minister Vincent Van Peteghem said that European position has not changed, suggesting that confiscation is not an option at the moment due to all the risks associated with it. He also added that it's better to use these frozen assets as leverage during peace negotiations with Russia.
Estonia shares Belgium's concerns, but Tsahkna stresses that the decision on these assets' future should be made collectively by a group of countries. "We definitely understand that they cannot be left alone in that very complicated situation," said Tsahkna. Regarding Hungary, Tsahkna mentioned, "they have many problems with their economy" and suggested that negotiations with Budapest must continue, as reported.
Nevertheless, Russia remains determined to access these frozen resources. Ukrainian officials warn that Russia has attempted to sell some of these assets to investors who could reclaim them once they are unfrozen.
Of course Russia would like to use their frozen assets to bargain and make deals. But the fact is that they don’t have these assets, they are frozen in Europe, emphasised the Estonian minister.
Final decisions about the future of sanctions and frozen assets may hinge on the outcomes of peace negotiations conducted by the USA. Tsahkna highlights that "even President Trump has said in theory that he gives the time up to the end of April and then he will act." These negotiations will be crucial for the future of sanctions and ongoing support for Ukraine.
