Business & Economics
Hungary Vetoes EU Eurobond ‘Plan B,’ Leaving Frozen-Russian-Asset Loan as Brussels’ Lone Ukraine Funding Path
At a 5 Dec 2025 COREPER II meeting, Budapest alone blocked unanimous consent for issuing EU-backed eurobonds, eliminating the bloc’s fallback and forcing leaders to decide by 18 Dec whether to finance a €90-165 billion loan to Kyiv solely via profits and guarantees tied to Russia’s €200 billion in frozen reserves.
Focusing Facts
- Hungary’s veto on 5 Dec means the joint-debt option—requiring unanimity under Article 122—cannot proceed, whereas the ‘reparations loan’ needs only a qualified majority.
- Euroclear in Brussels holds about €185 billion of the €210 billion frozen Russian central-bank assets; Belgium warns it could face full liability if Moscow sues.
- Japan told G7 peers on 8 Dec it will not leverage its roughly $30 billion in immobilised Russian assets, mirroring U.S. reluctance and isolating the EU scheme.
Context
Major powers have seized enemy assets before—e.g., the U.S. froze and later partly transferred $1.9 billion in Iranian funds after 1979, and the Allies demanded 132 billion gold marks from Germany in 1921—but both episodes triggered decades of litigation and financial self-protection by other states. Hungary’s lone veto and Belgium’s legal angst expose a deeper 21st-century trend: sovereign reserves are no longer sacrosanct storehouses but bargaining chips in geopolitical conflicts, accelerating the fragmentation of the dollar–euro-centred system as countries from the Gulf to Asia diversify away from Western custodians. If the EU ultimately confiscates or collateralises Russia’s money without Moscow’s consent, it may secure short-term cash for Kyiv yet undercut the perceived neutrality of Europe’s financial plumbing for a generation; if it fails, Ukraine’s fiscal hole could widen and EU solidarity fray further. Either way, this moment—akin to the 1931 collapse of Austro-German credit that fractured inter-war finance—marks a potential hinge where collective debt issuance, the sanctity of central-bank assets, and the coherence of the EU’s legal order are simultaneously tested, with ripple effects likely to echo for decades.
Perspectives
Pro-EU and Ukrainian outlets
Politico, Firstpost, KyivPost, Українська правда — They frame Hungary, Belgium and Japan’s resistance as dangerous roadblocks to a vital EU plan that would unlock frozen Russian assets or issue eurobonds to shore up Ukraine’s economy. By stressing Kyiv’s “desperate need” and the plan’s strategic necessity, they skim over the legal uncertainties and potential investor fallout highlighted elsewhere, echoing their governments’ pro-Ukraine positions.
Russian state-owned media
RT — It portrays the EU proposal as outright theft of sovereign Russian money that will deepen rifts inside the bloc, citing Hungary’s veto and Belgium’s fears as proof the scheme is unworkable. Language like “steal,” “theft,” and comparisons to an alcoholic suggests an intent to delegitimize EU support for Kyiv and amplify internal European discord, consistent with Moscow’s information goals.
Financial-sector and Belgian-focused outlets
Digital Journal, RTL Today, Legit.ng via AFP — Reporting centres on Euroclear’s warnings that the untested ‘reparations loan’ exposes Belgium and financial markets to serious legal and liquidity risks, urging a safer fallback plan. By elevating Euroclear’s concerns, these stories mirror the clearinghouse’s liability anxieties and may overemphasize technical hurdles relative to geopolitical stakes or Ukraine’s fiscal crisis.