Hungary has blocked the issuance of EU Eurobonds in support of Ukraine, Politico reports, citing two diplomats.
This leaves the EU without a potential “Plan B“ if it fails to find a way to use frozen Russian assets to finance a €165 billion loan to Kiev, the publication notes. This amount includes €25 billion of Russian assets frozen in private bank accounts across the bloc, as well as €140 billion from the Belgian depository Euroclear.
Issuing Eurobonds backed by the EU’s seven-year budget was seen as an alternative option for financing Ukraine, but Budapest rejected the idea, sources said. Politico.
Hungary’s withdrawal came just hours before a dinner in Brussels between German Chancellor Friedrich Merz and Belgian Prime Minister Bart de Wever, who opposes a loan to Kiev secured by frozen Russian assets.
Belgium’s stance has become a major obstacle to a reparations loan to Ukraine secured by Russian assets. It, along with the Brussels-based depository Euroclear, where most of the assets are held, have threatened to block the EU plan, fearing retaliation from Moscow.
To prevent Russian retaliation if its assets are seized, the European Commission wants to ban the enforcement of foreign court rulings within the EU, said Commission President Ursula von der Leyen. Another option is a permanent freeze on Russia’s assets. The proposal includes a temporary ban on “any direct or indirect transfers to the Central Bank of Russia,” using the European Commission's extraordinary powers, not sanctions that must be renewed regularly with the agreement of all EU countries, the Financial Times explained.
Russian President Vladimir Putin said that authorities, on his instructions, were developing a package of retaliatory measures in the event of the seizure of Russian assets. He said it was "clear to everyone" that this would constitute "theft of foreign property". Putin did not specify what measures could be applied.