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Hungary’s Prime Minister Viktor Orbán has slammed the European Union after it announced on Thursday is was indefinitely immobilising the assets of the Russian Central Bank, a central element of the reparations loan to Ukraine.
“Brussels is crossing the Rubicon today,” Orbán wrote in a social media post published on Friday.
“The subject of the vote is frozen Russian assets, which until now have been voted on every six months by EU member states, resulting in unanimous decisions. With today’s procedure, Brussels is abolishing the unanimity requirement with the stroke of a pen, in a clearly unlawful manner.”
Creative solutions against creative vetoes
The long-term immobilisation was agreed by ambassadors on Thursday afternoon under Article 122 of the EU treaties, which only requires a qualified majority from member states and bypasses the European Parliament.
The law prohibits the transfer of the €210 billion in assets back to the Russian Central Bank. The bulk of the assets, €185 billion, is held at Euroclear, a central securities depositary in Brussels. The remaining €25 billion is kept in private banks.
Until now, the funds have been immobilised under a standard sanctions regime, which depends on unanimity from all 27 and is vulnerable to individual vetoes.
But last week, the European Commission pitched to invoke Article 122 to keep the assets away from Russia for the foreseeable future. Article 122 has been previously used to cope with economic emergencies, such as the COVID-19 pandemic and energy crisis.
The Commission argued that the shockwaves unleashed by Russia’s full-scale invasion of Ukraine have caused a “serious economic impact” for the EU as a whole, triggering “serious supply disruptions, higher uncertainty, increased risk premia, lower investment and consumer spending.”
The bloc also pointed to a string of hybrid attacks in the form of drone incursions, sabotage and disinformation campaigns.
“Today’s decision will end the rule of law in the European Union and European leaders will place themselves above the rules,” Orbán wrote. “Instead of ensuring compliance with EU treaties, the European Commission is systematically raping European law.”
Hungary has been under an Article 7 procedure since 2018, a process that aims to deal with serious and systemic breaches of basic values of the European Union, including the rule of law.
A significant portion of EU funds has also been withheld under the Budgetary Conditionality Mechanism triggered in 2022, which links access to billions in EU funds to reforms addressing rule of law breaches. Hungary, under Orbán’s leadership, has used unanimity votes in the past to hinder EU decision-making or as a bargaining chip.
“We are the sand in the machinery, the stick between the spokes, the thorn under the nail,” Orban said in 2024, referring to his country’s role in EU decision-making.
In a short statement published on Friday morning, the Russian Central Bank announced the start of legal proceedings for the “recovery of damages”. It blamed Euroclear for preventing the release of the assets.
Later on Friday, the European Commission dismissed that lawsuit, calling it “speculative” and groundless.