EU uses legal loophole to overturn Hungary’s veto on arms for Ukraine

The European Union will use a “legal procedure” to get around Hungary’s veto of a plan to buy weapons for Ukraine using seized Russian cash, the bloc’s top foreign diplomat said on Monday.

The loophole could also allow Brussels to support efforts by the G7 nations to loan Kyiv €50 billion (£42 billion) using income from Russian assets in Europe frozen under sanctions.

“We have these revenues coming from the frozen assets and we have to look for a way in order to use them avoiding any kind of blockage,” Josep Borrell told reporters ahead of a meeting of EU foreign ministers in Luxembourg.

He added: “This money cannot get stuck, it has to be used and we have a legal procedure to avoid any kind of blockage.”

On Monday, EU member states approved a €1.4 billion (£1.2 billion) lethal aid package for Kyiv, using the assets. Mr Borrell said it would be released as early as next week and added that a second tranche of €1.1 billion (£930 million) was being readied.

The previously-agreed payments were vetoed by Hungary, where Viktor Orban, the prime minister, is often seen as Vladimir Putin’s closest ally in Europe.

But the European Council’s legal service has now advised national capitals that the veto is invalid because Hungary abstained from an earlier vote on the creation of the EU’s Ukraine Assistance Fund – a cash pot used to buy weapons for Kyiv.

‘The decision is clear’

Mr Borrell said: “We consider that since Hungary didn’t participate in the decision it’s not necessary they could participate in the implementation.

“The decision is clear: the revenues coming from the Russian frozen assets will be used to increase our military support to Ukraine…

“We need to use [the money] and we have a legal procedure in order to advance avoiding any blockage from some member state that were not part of the decision.”

The bloc agreed to legally exclude Hungary from the process after Mr Orban turned down a deal similar to one he struck with Nato last week, which gave him an opt-out from Ukraine actions in return for not blocking other member states from assisting Kyiv.

G7 plan also at risk

There are hopes the EU’s legal workaround can next be used to prevent Budapest from blocking the EU’s sign-off of a G7 agreement to raise €50 billion (£42 billion) in loans for Kyiv by December.

Earlier this month, G7 leaders in Italy announced that returns from some €300 billion (£252 billion) in frozen Russian central bank assets would secure the loans, which can be used by Kyiv to buy military gear or for its economic recovery.

Around €200 billion (£177 billion) of that is held by EU countries – mainly Belgium – making the bloc’s support for the scheme crucial if it is to raise the money by the end of the year.