Hungary slows down EU arms initiative for Ukraine funded by frozen Russian assets

Brussels: Hungary has blocked the European Union’s approval of the allocation of proceeds from frozen Russian assets to purchase weapons for Ukraine.

Following months of debate, the EU countries agreed to use the proceeds from about €190 billion stuck in the Belgian central securities depository Euroclear to purchase weapons for Ukraine.

However, the Hungarian ambassador opposed the acceleration of payments, making it impossible to ensure that the principle of unanimity in making such decisions is respected.

“For the time being they are blocking everything connected to the military support to Ukraine,” said one source, suggesting that Budapest’s reservations will remain at least until next month’s European elections.

Hungarian Prime Minister Viktor Orbán has long argued that the West cannot win the war in Ukraine, and Hungary has stalled numerous European decisions related to the war. However, Budapest eventually relented under diplomatic pressure from the EU and Washington, including with regard to a €50 billion aid package for Kyiv.

The second source said that in order to reach an agreement on using the profits from the frozen Russian assets, EU officials proposed a deal to Hungary under which their share of the funds allocated by Brussels would not be used to buy weapons for Ukraine.

This persuaded Budapest not to veto the scheme, but it is delaying the implementation of the conditions by not supporting the necessary legislation. Budapest is not against it in principle but has concerns about making payments automatic, people familiar with its stance said.

Diplomats hope to find a way to resolve these issues before the July payment is due. Hungary declined to comment.

On Saturday, it was reported that the G7 finance ministers supported the idea of granting Ukraine a loan secured by the proceeds of frozen Russian assets to provide Kyiv with financing after 2024.