FT: EU races to adopt special legislation on blocking Russian assets

EU countries are intending to galvanise the adoption of legislation enabling the indefinite freezing of €210 billion in Russian assets in order to prevent a veto from Hungarian Prime Minister Viktor Orbán at the upcoming EU summit.

Officials familiar with the plans told the Financial Times that the accelerated push to pass legislation, enabling emergency powers to override national vetoes on renewing sanctions, is intended to protect Brussels' leverage in US-led peace negotiations over the war in Ukraine.

Diplomats working on the legislation believe there is value in acting quickly in the coming days to separate the contentious issue of freezing Russian assets from discussions on using those funds to back loans for Kyiv.

However, the FT noted that Hungary and several other EU countries are likely to be unhappy with such a move.

Last week, the European Commission proposed using €210 billion in Russian sovereign assets held abroad to finance a loan for Kyiv – initially €90 billion to be disbursed over the next two years.

For the loan scheme to function, the assets must be frozen indefinitely, rather than in six-month periods that can only be extended by unanimous agreement of all 27 EU member states.

Hungary, the EU member most aligned with Russia, opposes additional support for Kyiv and has repeatedly warned it may block the extension of sanctions.

EU officials fear that Orbán may follow through on this threat if the Trump administration decides unilaterally to lift US sanctions against Russia.

To circumvent the risk of sanctions being blocked, the European Commission has proposed using emergency powers – typically employed in economic crises – to impose sanctions on the assets indefinitely. The measure, adopted under Article 122 of the EU treaties, can pass with a qualified majority, enabling it to circumvent possible vetoes.

EU leaders are expected to agree on the use of frozen Russian assets for a "reparations loan" to Ukraine at the 18-19 December summit.

President Volodymyr Zelenskyy said he is confident that Ukraine will receive the frozen Russian funds.

Seven states have sent a letter to EU leadership in support of the "reparations loan" for Ukraine, with Belgium remaining the main opponent. Last week, European Commission President Ursula von der Leyen met with Belgian Prime Minister Bart De Wever and German Chancellor Friedrich Merz to discuss Russian assets.

It should also be noted that an alternative to the "reparations loan" has been blocked by Hungary.