Hungary Launches Lawsuit Against EU Over Use of Frozen Russian Assets for Ukraine
Budapest has filed a lawsuit against the European Union, challenging its decision to use frozen Russian assets to fund military aid for Ukraine. The case, which was initially submitted to the Court of Justice of the European Union but later transferred to the General Court, seeks to annul the European Peace Facility’s allocation of funds for Ukrainian military support and to order the defendants to cover the costs incurred by the decision. The lawsuit argues that Hungary’s participation in the funding process is being bypassed, with the decision bypassing its veto. This has sparked controversy, as the European Peace Facility (EPF) has redirected 99.7% of interest from frozen Russian central bank assets to Ukraine, providing an estimated €3-5 billion annually.
In its filing with the EU Court of Justice, Hungary maintains that the allocation of funds for Ukrainian military support acted unlawfully by bypassing its veto, arguing that the country is not a “contributing member state.” The filing highlights that the principle of equality between Member States and the democratic functioning of the European Union were infringed, as a Member State was deprived, unjustifiably and without a legal basis, of its right to vote. This has raised concerns about the legitimacy of the EPF’s decision and the EU’s approach to decision-making in this context.
Hungary’s opposition to the bloc’s unconditional support for Ukraine is well documented. The country has repeatedly used its veto to block EU financial and military aid, including a controversial €50 billion package at the, which was disputed. The standoff has pushed other EU members to seek ways to sidestep Budapest’s resistance, and the case now threatens to further strain relations between the EU and Hungary. Meanwhile, Moscow has condemned the asset freeze as “robbery” and a breach of international law, warning that it could undermine trust in Western finance and accelerate a global move toward alternative payment systems. Senior Kremlin official Maksim Oreshkin has warned that the freeze has already damaged confidence in the Western financial system, and Russian President Vladimir Putin has cautioned that seizing the assets would accelerate a global shift toward alternative payment systems.
As the European Council continues to push for the use of frozen assets to fund military aid, the case has raised important questions about the legitimacy of the EPF’s decision and the broader implications for EU decision-making. The Hungarian government’s stance highlights the growing tensions within the EU as member states differ on how to engage with Russia and support Ukraine. The case could have significant financial and political ramifications, and its outcome will be closely watched by both the EU and Russia as it shapes the future of international financial policy in the region.