Hungary’s Orban says EU’s frozen assets plans won’t pass

One of Russia’s last remaining allies in the European Union tells CNBC that he believes there is no way forward for offers to finance Ukraine’s reconstruction through frozen Russian assets.

The European Commission, the EU’s executive arm, is considering using seized Russian assets held in Europe to provide further financial support to Ukraine.

Speaking to CNBC as officials arrived at a European Council meeting, Hungarian Prime Minister Viktor Orbán said proposals to use dormant assets to help Ukraine were “killed.”

“His [a] dead end. “It’s over,” he said. “There’s not enough support behind it.”

Orbán is widely seen as Russia’s closest ally within the EU and has been a vocal critic of plans to use frozen assets potentially worth hundreds of billions of euros to finance compensation loans to Kiev. But Hungary is not the only country with doubts about the measures.

Belgium, whose support is critical given the large amount of frozen assets at Brussels-based clearing house Euroclear, has expressed concerns about possible legal and financial risks. Italy and Bulgaria also supported Belgium’s resistance to the proposals.

The Kremlin, on the other hand, said that such a move would mean justifying the war, and the Russian central bank announced last week that it would file a lawsuit against Euroclear in the Moscow court “for compensation for the damages suffered by the Central Bank of Russia.”

Financing options for compensation loans to Ukraine will be high on the agenda at the European Council meeting, which ends on Friday.

“Without new additional financial support from the EU and other international donors, Ukraine is expected to run out of funds by early 2026,” the European Parliament said in a briefing on Wednesday. he said, adding that Hungary had already blocked the option of using the gap in the EU budget to fund Kiev. All 27 member states must vote unanimously to make decisions regarding the use of the EU’s own financial resources.

“If both options proposed by the Commission are blocked, ‘coalition of the willing’ may be the option of last resort,” the European Parliament said on Wednesday. he said.

Asked ahead of Thursday’s meetings whether he was acting in Europe’s or Russia’s interests by working to prevent Russian assets from being used by the EU, Orbán said he was “only working for peace.”

“I guess what we’re supposed to do [is] “To take some steps towards peace, not war,” he said.

Russian and Ukrainian forces are entering their fourth winter as peace talks continue. After weeks of talks between delegations from the United States, Russia, Ukraine and Europe, negotiations are expected to continue until next weekend, possibly in Miami.

Despite Orbán’s take on the issue, the EU’s high representative for foreign affairs and security policy, Kaja Kallas, told reporters in Brussels on Thursday that the bloc had been pushing for peace with Ukraine but that it was “one-sided”.

“We haven’t seen any willingness on the Russian side to act or talk seriously about peace,” he said. “We need to put pressure on Russia so that they stop pretending to negotiate and start coming to the table to negotiate.”

Unlike Orbán, he remained optimistic about implementing proposals for compensation loans and asset freezes.

“The proposals we are working on address Belgium’s concerns,” he said. “The issues that Belgium raised have been addressed, so hopefully we can make it to the finish line. Putin expects us to fail, so we shouldn’t give it to him.”

A Kremlin spokesman did not respond to CNBC’s request for comment.