Viktor Orbán blocks financing of Ukrainian arms from frozen Russian assets

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Viktor Orbán’s Hungary delays legislation that would allow Ukraine to receive up to 2 billion euros from the EU for weapons, dealing a blow to efforts to mobilize profits from Russian assets frozen under punishments.

After months of debate, EU countries agreed this month to use profits from around 190 billion euros blocked in Belgium’s central depository Euroclear to buy weapons for Ukraine.

But the Hungarian envoy opposed accelerating payments by dropping a requirement for unanimous EU27 support for each disbursement to Ukraine, said five people briefed on a meeting of the EU ambassadors on Wednesday.

“At the moment they are blocking everything related to military support for Ukraine,” said one of those present, suggesting that Budapest’s reservations would remain at least until next month’s European elections.

Orbán has long argued that the West cannot win the war in Ukraine, and Hungary has delayed many European decisions related to the conflict. But Budapest finally gave in under diplomatic pressure from the EU and Washington, notably by granting aid of more than 50 billion euros to kyiv.

In order to reach an agreement on the use of profits from frozen Russian assets, EU officials offered Hungary a deal under which their share of Brussels funds would not be used to buy weapons from Russia. Ukraine, a second person said.

This convinced Budapest not to veto the project, but delayed the implementation of the conditions by not supporting the necessary legislation. Budapest is not opposed in principle but is concerned about the automation of payments, people familiar with the matter said.

Diplomats hope a way will be found to resolve the issues before the expected payment in July. Hungary declined to comment.

The move came as G7 finance ministers discussed a separate US plan to provide a loan to Ukraine based on future profits from Russian assets. Ministers had hoped a deal on such a project could be reached at the G7 leaders’ summit in June, but some details still need to be agreed.

“We are working to find a solution regarding future revenues. We hope to lay the foundations for a solution here – perhaps at the G7 summit” in June, said Italian Finance Minister Giancarlo Giorgetti, who is hosting the negotiations in Stresa, Italy.

German Finance Minister Christian Lindner said Berlin was studying the proposals and was “ready to take further measures that would not have legally disadvantageous or economically risky consequences.”

The United States believes it has broad support for the idea of ​​a loan, which could bring $50 billion to Ukraine. But Washington acknowledges that European financial officials remain concerned about how the loan could be guaranteed, in case Ukraine defaults or profits from Russian assets fail to materialize.

“These are very specific questions, not questions of intent or direction,” said a G7 official briefed on the negotiations, while warning that “there is still a lot of work to be done” before the summit. leaders.

Any decision at the G7 level on the use of future profits would require the unanimous support of EU27 countries – giving Hungary an additional opportunity to thwart efforts to further finance Ukraine.