The European Union is preparing a legal and political mechanism to lock up hundreds of billions of euros in frozen Russian state assets, ensuring they remain immobilised until Moscow ends its war on Ukraine and pays compensation for the damage caused. The move is designed to prevent individual member states, notably Hungary and Slovakia, from vetoing or weakening future decisions on the assets’ use.
Closing the veto loophole
Since Russia’s full-scale invasion of Ukraine in 2022, the EU and its allies have frozen roughly €200–300bn in Russian central bank reserves, much of it held in European financial institutions. Until now, extending sanctions and determining how the proceeds from those assets might be used has required periodic unanimous approval. EU officials increasingly fear that internal dissent could jeopardise the bloc’s long-term leverage. By placing the assets under a reinforced legal lock, Brussels aims to remove the need for repeated political renewals that could be blocked by a single capital.
A long-term legal freeze
Under the emerging plan, the assets would remain frozen indefinitely under EU law until Russia agrees to end the war and compensate Ukraine. This approach stops short of outright confiscation, which many member states consider legally risky, but it significantly strengthens the status quo. The proposal would also formalise the principle that Russia, as the aggressor state, bears responsibility for reconstruction costs, potentially running into hundreds of billions of euros.
Why Hungary and Slovakia matter
Hungary has repeatedly delayed or diluted EU sanctions on Russia, arguing they harm European economies more than Moscow. Slovakia’s new government has taken a more sceptical stance on military and financial support for Ukraine. While neither country directly controls the frozen assets, their ability to veto sanctions renewals has become a growing concern in Brussels. Locking in the freeze now would reduce their leverage over future decisions.
From interest to reconstruction
The EU has already agreed to use windfall profits generated by the frozen assets — primarily interest income — to support Ukraine, including military assistance and budgetary aid. Estimates suggest these profits could amount to several billion euros annually. The new framework would ensure that such revenue streams remain secure over time and could eventually be channelled into Ukraine’s reconstruction, without reopening the entire sanctions debate each year.
Legal caution, political resolve
EU lawyers remain cautious about crossing the line into asset seizure, warning of potential challenges under international law and risks to the eurozone’s financial credibility. Nevertheless, there is growing political momentum behind a tougher stance. Officials argue that allowing Russia to regain access to its reserves without accountability would undermine both Ukraine’s recovery and the EU’s credibility as a geopolitical actor.
A signal to Moscow and beyond
Beyond the immediate financial implications, the decision carries symbolic weight. It signals that time is no longer working in Russia’s favour and that internal EU divisions will not be allowed to erode long-term support for Ukraine. For Brussels, locking up the assets is about more than money — it is a statement that aggression carries enduring economic consequences, regardless of shifting political winds within the Union.
Newshub Editorial in Europe – 14 December 2025
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