The EU is preparing an indefinite freeze of €210 billion of Russian assets: how Brussels circumvents Orban and Belgium's fears

When Brussels admits that waiting for Viktor Orban to come to his senses is more expensive than rewriting the rules of the game, it means one thing: the EU has moved to a regime where Russian money is viewed not as a temporary lever of pressure, but as a long-term guarantee for a Ukrainian victory.

European Union ambassadors have agreed on an emergency legal mechanism that allows the European Commission to keep around €210 billion in Russian state assets frozen until Russia stops its aggression against Ukraine and pays reparations.^{1 2 3} This decision effectively breaks the current EU sanctions architecture, where each extension of restrictions required unanimity, and thus deprives governments like Hungary of the right to block the extension of the freeze of Russian funds with a simple “no” during the next vote.^{1 2 4} At the same time, this mechanism paves the way for the so-called “reparations credit scheme” — the use of frozen assets as collateral for large loans to Ukraine, without unfreezing a single euro in favor of Moscow.^{1 3 5} .

What exactly did EU ambassadors agree on?

According to the Danish Presidency of the Council of the EU and leaks of the text to European media, the ambassadors of the member states approved an updated version of the European Commission's proposal, based on Article 122 of the Treaty on the Functioning of the EU.^{1 2} This article allows for qualified majority decisions in situations of “serious economic difficulties,” bypassing the standard unanimity requirement, which is critical where sanctions decisions have so far been blocked by a single government — primarily Budapest.^{2 4} The agreed text explicitly states that the emergency powers will be in effect “until Russia ceases its aggressive war against Ukraine and pays Ukraine reparations,” meaning the freeze becomes virtually indefinite, tied to a political resolution of the war, rather than the calendar six-month periods of sanctions.^{1 3} .

Formally, the ambassadors' decision still needs to be approved by the EU Council in a written procedure, but sources in Brussels describe the support as a "very clear majority", leaving Budapest little room for manoeuvre.^{1 2} . Thus, the European Commission receives a political and legal mandate not only to continue the current freeze of Russian reserves, but also to protect them from possible future attempts to “melt” the assets, for example, as part of a potential peace agreement on terms favorable to the Kremlin.^{1 3 6} .

What makes this €210 billion special?

This primarily concerns the assets of the Central Bank of Russia and other state structures that were “immobilized” in the EU after the start of the full-scale invasion, with the lion’s share of these funds being accounted for through the Belgian depository Euroclear.^{1 3 5} No one confiscated this money: formally it remains the property of the Russian state, but it cannot be withdrawn or used for its intended purpose, and the accumulated income from its placement has become the subject of separate EU decisions in favor of Ukraine.^{3 5 7} As of the end of 2025, the amount of frozen assets in European jurisdiction is estimated at approximately 210 billion euros, and it is this figure that the new legal mechanism is focused on.^{2 5} .

A separate part of the discussion concerned whether the freezing of these funds is purely a sanctions instrument or actually a "reparations reserve" for the future: the new text legally shifts the European Commission's argument towards the second option.^{1 3} The explanatory note notes that the return of Russian assets “would deal a blow to the EU economy” and could stimulate new hybrid attacks by the Kremlin, and therefore maintaining the freeze is recognized as “an appropriate measure to prevent consequences of an unprecedented scale” caused by Russia’s actions.^{1 3 7} .

How the mechanism hits Orban and other pro-Russian governments

Until now, EU sanctions decisions — including asset freezes — formally required unanimous approval every six months, turning each extension into a political bargaining chip with Budapest or other skeptical capitals.^{2 4} . Viktor Orban's Hungary has used this construct as leverage for years, threatening not to vote for sanctions or financial aid to Ukraine and extracting concessions for itself in other areas — from access to EU funds to easing pressure on rule of law issues.^{2 4 8} The new emergency mechanism cuts off this possibility at the most sensitive point - precisely where the huge amount of Russian money potentially linked to future negotiations to end the war is at stake.^{1 2 6} .

The use of Article 122 means that the extension of the asset freeze and related decisions can now be made by qualified majority rather than unanimity, effectively “putting Orbán out of the loop” on this issue.^{2 4 6} For pro-Russian governments in the EU, this is a dangerous precedent: a demonstration that the union is ready to bypass national vetoes on critical issues if they systematically contradict the basic interests of the European Union and the security of the continent.^{3 4 8} .

Why Belgium resisted and what was changed in the scheme

If Orban is a political factor in this story, then Belgium is a legal and financial one.^{1 3 5} It is through Euroclear, the Belgian clearing giant, that most of Russia's reserves pass, and the government in Brussels has repeatedly warned partners: any scheme that directly uses the body of assets could make Belgium a target for lawsuits from Russia and other investors.^{3 5 7} . The first versions of the “reparation loan” envisaged that the frozen assets would become direct collateral for a huge loan in favor of Ukraine; in the event of a legal defeat in the EU courts or international instances, all 27 states would have to pay for the obligations proportionally, but the political and reputational blow would fall primarily on Belgium.^{3 5 7} .

To remove some of these risks, in the final text, which was supported by ambassadors, direct references to a specific credit scheme were removed, and the emphasis was shifted to the mechanism of the indefinite freeze itself and the extraordinary powers of the European Commission.^{1 3} The logic is simple: first, the EU legally cements the fact that the assets will remain frozen until reparations are paid, and the details of the use of income from these assets or their status as “collateral” for loans can be spelled out in separate decisions — already taking into account Belgium’s reservations and potential legal risks.^{3 5 7} .

How does this relate to the "reparation loan" plan for Ukraine?

In a parallel track, the European Commission is promoting the idea of ​​a so-called “reparations loan” — a loan secured by frozen Russian assets, which should cover approximately two-thirds of Ukraine’s financing needs for the next two years.^{3 5 6} European Commission President Ursula von der Leyen presented an estimated amount of 90 billion euros, which is planned to be raised either through joint borrowing or through a structure where Russian assets in Europe will serve as the basis for a loan in favor of Kyiv.^{3 6 9} The idea is that Ukraine would only have to return these funds if Russia fulfilled its reparations obligations; in effect, this means that the political and legal weight of the risks falls on the EU, not on Kyiv.^{3 6 9} .

For such a scheme to work, assets must not be temporarily frozen “pending the next review”, but clearly recorded as “immobilized” indefinitely — this is what the new mechanism based on Article 122 provides.^{2 3 5} For Brussels, this is also an important signal to Washington, where the new administration of Donald Trump is promoting its own options for using Russian reserves and, according to European media, does not rule out scenarios of partial unfreezing of assets as part of a broader agreement with the Kremlin.^{1 6 10} By fixing an indefinite freeze on its field, the EU demonstrates that it is not ready to turn this money into an element of “bargaining” without taking into account Ukrainian interests.^{1 3 10} .

Why is this critically important for Ukraine?

For Ukraine, the decision of the EU ambassadors is not just an episode in a long discussion about frozen assets, but a strategic change in the starting conditions for future negotiations on the end of the war.^{1 3 6} First, an indefinite freeze virtually eliminates the scenario in which a pro-Russian government in one of the member states blocks the extension of sanctions and thus opens up the possibility of returning Russian assets without any reparations obligations.^{2 4 6} Secondly, it creates a more predictable basis for planning long-term recovery: both Kyiv and international partners can build financial models based on the fact that hundreds of billions of euros of resources are legally tied to the Ukrainian issue for years to come.^{3 6 9} .

Third, the new mechanism reduces the risk that Europe will go for a “quick peace” at the expense of Ukraine, exchanging frozen funds for a political deal with the Kremlin.^{1 3 10} If assets can only be unfrozen after the aggression is over and reparations are paid, any scenario in which Russia retains control of the occupied territories while simultaneously reclaiming its reserves becomes legally much more complex — and politically toxic for EU governments.^{1 3 10} .

Critics' arguments: legal risks and fears of precedent

Opponents of the mechanism — primarily Hungary, but not only — warn that using Article 122 for a sanctions regime blurs the line between an economic emergency and political decisions in the field of foreign policy.^{1 2 8} Budapest has already publicly questioned the legality of the move, arguing that it violates EU law and undermines the “neutrality” of the European Commission, which Orban says is transforming from a technical body into a political player in the confrontation with Russia.^{1 2 8} Behind the scenes, more pragmatic arguments are also being made: if the EU sets a precedent of indefinitely freezing the assets of a major power, this could undermine the confidence of other investors in the European financial jurisdiction.^{5 7 11} .

Lawyers remind that Russia will probably try to challenge this construction in EU courts and international instances, appealing to the protection of investments and sovereign immunity of state assets.^{3 5 11} At the same time, Brussels is counting on another precedent: an aggressive war against a neighbor and massive violations of international law provide grounds for exceptional measures, and the very idea of ​​a "reparations loan" is based on the thesis that Russia is not deprived of property, but only temporarily does not have access to it until it fulfills its obligations to the victim of aggression.^{3 5 7} .

How the EU decision fits into the global context

The European initiative to freeze Russian assets indefinitely comes amid a broader international debate on how to use these funds to support Ukraine while not undermining key pillars of the global financial system.^{3 6 12} The US is also discussing options for directly confiscating part of Russian reserves, but the legal risks and the position of large financial centers make the European “hybrid” approach — freeze plus credit — more attractive to some partners.^{3 10 12} The EU decision, if it is finally ratified, could become a guideline for other jurisdictions seeking a balance between putting pressure on Moscow and maintaining the attractiveness of their markets for sovereign investors.^{3 12 13} .

For the Kremlin, this EU course means a strategic defeat on the financial front: hopes of returning frozen assets in exchange for partial fulfillment of political conditions become much less realistic.^{1 3 6} Moscow is already calling any attempts to use these funds “theft” and threatening symmetrical steps against foreign assets in Russian jurisdiction, but the scale of the asymmetry here is telling: the volume of Western assets in Russia is incomparable to Russian reserves frozen in the EU and G7 countries.^{3 12 13} .

What's next: the December summit and a test of political will

The key stage will be the EU leaders' summit on December 18-19, where political approval is expected not only of the indefinite freeze mechanism, but also of the framework of a "reparation loan" for Ukraine.^{3 5 6} According to the Financial Times and a number of Ukrainian and European publications, Brussels is seeking to approach this summit with the most prepared package possible in order to minimize the room for maneuver for Budapest and other skeptics.^{2 4 6} The success or failure of this venture will be an indicator of how ready the European Union is to move from declarations of a “strategy on Russia” to instruments of long-term deterrence and real financing of Ukrainian resilience.^{3 6 9} .

For Kyiv, not only the decision itself is important, but also its political signal: if the EU really sews into its legal fabric the principle of "first reparations - then any talk about assets," this will mean that European capitals see the war not as a temporary crisis, but as a conflict, the outcome of which must be legally fixed and financially paid for by the aggressor.^{1 3 10} In this logic, the frozen 210 billion euros cease to be just a figure in the final documents of the summits and become the foundation of a future bill that Moscow will have to pay sooner or later.^{3 6 9} .

Sources

1. ZN.UA / Politico: details of the agreed mechanism based on Article 122 of the EU Treaty, indefinite freezing of 210 billion euros of Russian assets and the formula "until the end of the war and the payment of reparations"
2. Financial Times / "European Truth": EU plans to adopt special legislation to indefinitely freeze Russian assets and bypass a possible Hungarian veto
3. Reuters, Bloomberg: materials on the European Commission's plans to use frozen Russian assets or loans secured by them to form a "reparations loan" for Ukraine
4. RBC-Ukraine, LIGA.net, iPress: publications about Viktor Orban's threat of veto on sanctions and aid to Ukraine and EU attempts to minimize Hungary's influence
5. Eurointegration / NV / other Ukrainian media: reviews of discussions around the role of Belgium and Euroclear, legal risks and the position of the Belgian government regarding Russian assets
6. European Pravda / EUobserver: analysis on the use of Article 122 as a tool for emergency decision-making and bypassing national vetoes in sanctions matters
7. Documents of the European Commission and the European Parliament on sanctions against the Russian Federation and the use of proceeds from frozen assets for the benefit of Ukraine
8. International think tanks on European policy: assessing the impact of the Hungarian position on the EU sanctions regime and the risks of “Ukraine fatigue”
9. The Guardian, international media: publications about the "reparations loan" and options for long-term financing of Ukraine at the expense of Russian assets
10. Expert comments from lawyers and economists on sovereign immunity, the risks of Russian lawsuits, and possible precedents in international law
11. Analysis by leading think tanks on the global consequences of using frozen assets as a tool for long-term deterrence of aggressors