EU member states are preparing to accelerate a decision to indefinitely immobilise up to €210bn in frozen Russian sovereign assets, in an effort to pre-empt an expected veto by Hungarian Prime Minister Viktor Orbán ahead of next week’s leaders' summit to vote through a Reparation Loan for Ukraine, the Financial Times reported on December 10.

The legislation, being rushed through under emergency provisions, would override the usual requirement for unanimous agreement on sanctions. Officials familiar with the plans told FT the aim is to isolate the contentious asset-freezing decision from broader debates on raising Ukraine aid, which are scheduled for discussion by EU leaders next week.

The proposal invokes Article 122 of the EU treaties, a rarely used mechanism intended for economic emergencies, allowing the bloc to impose measures by qualified majority rather than consensus. “It’s a question of protecting our leverage in peace talks and not allowing Budapest to undermine our position,” one official told the FT.

The European Commission’s plan centres on locking in sanctions on the €210bn in Russian central bank assets frozen since 2022. Of that total, approximately €185bn is held at the Brussels-based depository Euroclear. The Commission’s strategy is to use the profits generated from these assets to back a €90bn loan for Ukraine over the next two years.

Ukraine is desperate for funds and faces an expected $65bn budgetary short fall and a possible macroeconomic collapse in the first quarter of 2026 if fresh funding is not found. The US has sent no money to Ukraine this year, leaving the increasingly cash strapped EU to carry the entire burden.

As bne IntelliNews reported, Europe has been unable to offset the end of US support for Ukraine. The Kiel Institute warned that without a sharp increase in aid commitments over the final months of 2025, Ukraine could face a widening gap between what needs for defence spending and budget revenues, of which half is made up by foreign support from its allies.

Total military aid to Ukraine declined significantly in July and August, falling 43% compared to the monthly average in the first six months of 2025, despite the Prioritised Ukraine Requirements List (PURL) programme for the EU to fund purchases of US-made weapons this year.

The Reparation Loan mechanism depends on the underlying assets being immobilised indefinitely, rather than the current rolling six-month renewal cycle, which Hungary has repeatedly threatened to veto. EU officials are concerned that Orbán could act on these threats, particularly if a new US administration lifts its own sanctions on Moscow. That could trigger the immediate repayment of all the frozen funds to Moscow. “The Commission’s loan proposal crosses every red line,” said Zoltán Kovács, a Hungarian government spokesman.

The Commission’s decision to invoke emergency powers risks deepening divisions within the bloc. Past efforts to override national objections — including on migration policy — have left long-standing political rifts. In her EU State of the Union address (video, transcript) on September 10 European Commission President Ursula von der Leyen raised the prospect of ending the EU’s unanimity rule that requires all 27 member states to agree on any major policy decision – and idea that is being fiercely opposed by the smaller member states.

Belgium, which hosts Euroclear, has warned repeatedly about the dire legal consequences of effectively seizing the Russian money, which could leave Belgium on the hook for the full amount should a court rule the loan illegal and order its repayment to Russia.

Belgium’s Prime Minister Bart De Wever has demanded that the whole of the EU share the risk with Belgium – something the other member states have refused to do.

EU leaders have been increasing their pressure on Wever to agree to the Reparation Loan, which will go to the vote at the upcoming EU summit on December 18-19, but if anything he has hardened his line in the last week. Wever called the European Commission's proposal to use frozen Russian assets to finance Ukraine “theft,” echoing the Russian position.

"This is money from a country with which we are not at war. It would be like walking into the embassy, ​​taking out all the furniture, and selling it," he said on December 9.

“Robbing” Russia is the last remaining option for Ukraine’s increasingly desperate European backers to sustain Kyiv in its conflict with Moscow, Foreign Minister Sergey Lavrov said on December 10. Russia is ready to respond to any hostile Western actions, he warned.

The Kremlin has threatened to take retaliatory measures if its money is seized including seizing an estimated €200bn-worth of Western assets still trapped in Russia – mostly privately-owned.

Von der Leyen said that “almost all” of Belgium’s conditions for agreeing to the reparations loan have been addressed ahead of the crucial vote, the FT reports.