In case of Hungary blocking sanctions against Russia, EU and G7 countries will suffer - Estonian Foreign Minister
Kyiv • UNN
Hungary can force the EU to lift sanctions against €210 billion of frozen Russian assets. This will remove the guarantee on loans to Ukraine and shift their coverage to EU and G7 taxpayers.
Hungarian Prime Minister Viktor Orbán will present European taxpayers with an even larger bill for supporting Ukraine if he forces the EU to lift restrictions on 210 billion euros of frozen Russian assets. This was stated by Estonian Foreign Minister Margus Tsahkna, reports the Financial Times, writes UNN.
Details
Blocking the renewal of EU anti-Russian sanctions - a threat Orbán has repeatedly voiced but never acted upon before - would leave the G7 and EU governments on the hook for multi-billion dollar loans to Kyiv, secured by Russian assets.
The EU and G7 — which include the US, Canada, Japan, France, Italy, Germany, and the UK — last year used profits generated from approximately €260 billion of frozen Russian assets worldwide to support a €50 billion loan to Ukraine. If the assets are unfrozen, the EU and US would be responsible for €20 billion of the loan, with the remaining financial burden falling on other G7 members.
"The problem is that these assets, which guarantee the loan, will disappear," Tsahkna said, referring to a scenario where EU sanctions cease to be in effect.
Officials expect Orbán to go further with his threats during the upcoming discussion on extending anti-Russian sanctions, which expire at the end of July. The decision to extend them must be unanimously approved by EU member states. The vast majority of frozen assets are held at Euroclear, a financial intermediary based in Belgium.
If they are going to block this, then the sanctions will be lifted. And the central bank assets will be transferred to Putin's Russia, as a reward. We cannot allow this
The European Commission is trying to develop a fallback plan in case the sanction extension fails, but EU officials said most legal avenues are doomed from the start.
We need some legal basis or some procedure. This will require the participation of a "coalition of the willing" that will go beyond the EU and include G7 members and countries like Norway
Supplement
Estonia advocates for the G7 countries to confiscate Russian assets rather than leaving them under sanctions. From the perspective of the Estonian government, this would be the most clear and straightforward solution.
Some EU and G7 countries oppose such a move, arguing that it could violate international law and undermine confidence in the euro. Belgium, where around 190 billion euros of Russian assets are held in the central securities depository Euroclear, strongly opposes this step, fearing it would become a prime target for lawsuits.
Recall
Russia appealed to the US with a request to allow it to purchase Boeing aircraft using funds from frozen assets after a ceasefire in Ukraine.
