Viktor Orbán stops arms financing in Ukraine from frozen Russian assets

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Viktor Orbán’s Hungary is delaying legislation that would allow Ukraine to receive up to €2 billion for weapons from the EU, in a blow to efforts to mobilize profits from Russian assets frozen under sanctions.

After months of debate, EU countries agreed this month to use profits from some €190 billion trapped in Belgian central securities depository Euroclear to buy weapons for Ukraine.

But Hungary’s envoy has opposed the acceleration of payments by waiving the requirement for unanimous EU-27 support for each disbursement to Ukraine, five people briefed on a meeting of EU ambassadors on Wednesday said.

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

Orbán has long maintained that the West cannot win the war in Ukraine, and Hungary has delayed numerous European decisions related to the conflict. But Budapest has finally bowed to diplomatic pressure from the EU and Washington, including an aid package of more than €50 billion to kyiv.

To secure a deal on the use of proceeds from frozen Russian assets, EU officials offered Hungary a deal under which its share of Brussels funds would not be used to buy weapons for Ukraine, a second person said.

That convinced Budapest not to veto the plan, but it is delaying implementation of the terms by not backing the necessary legislation. Budapest is not opposed in principle, but is concerned about making the payments automatic, people familiar with his thinking said.

Viktor Orbán has said that the West cannot win the war in Ukraine © EU Council/dpa

Diplomats are hopeful that a way can be found to untangle the issues before payment is scheduled in July. Hungary declined to comment.

It came as G7 finance ministers discussed a separate US plan to provide a loan to Ukraine based on future profits arising from Russian assets. Ministers had hoped an agreement on such a plan could be reached at the G7 leaders’ summit in June, but some details have not yet been agreed.

“We are working to find a solution regarding future income. We hope to lay the groundwork here for a solution, perhaps at the G7 summit” in June, said Italian Finance Minister Giancarlo Giorgetti, who will host the talks in Stresa, Italy.

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

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

“Those are really granular 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 leaders’ summit.

Any decision at the G7 level on the use of future profits would require the unanimous backing of EU27 countries, giving Hungary a new opportunity to thwart efforts to continue funding Ukraine.

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