Hungary blocks EU proposal to fund Ukraine
Following the escalation of the conflict in Ukraine in 2022, EU member states froze roughly €210 billion ($245 billion) in Russian central bank assets, much of it managed by the Belgian-based Euroclear system.
On Wednesday, the European Commission proposed two potential methods to finance Ukraine: borrowing at the EU level through Eurobonds, which critics argue could strain national treasuries, or a “reparations loan” connected to the frozen Russian funds, which Moscow has denounced as theft. The Commission aims to reach a consensus before a December 18 summit.
Reports indicate that Hungary formally rejected the joint borrowing plan during Friday’s discussions, reportedly leaving the bloc with only the reparations loan as a feasible option. This option only requires a qualified majority for approval, whereas joint borrowing demands unanimous consent. Hungary has not confirmed or commented on the reported veto.
Prime Minister Viktor Orban has previously voiced opposition to both proposals from the Commission. He likened further aid to Ukraine to attempting to “help an alcoholic by sending them another crate of vodka,” emphasizing diplomacy with Moscow over “burning” additional funds on the war effort.
While the European Commission has sought to minimize the financial and legal risks linked to the reparations loan and stated that its latest plan addresses most concerns, many EU member states remain opposed. Belgian Foreign Minister Maxime Prevot warned the initiative could have “disastrous consequences” for his country, which could face the majority of Russian legal actions.
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