FT: EU eyes Belgian king as Hungary threatens to block Russia sanctions renewal

EU officials are developing contingency plans, including using an 81-year-old Belgian royal decree, to protect sanctions against Russia as Hungary threatens to block their renewal, FT reports referring to officials involved in the discussions.

Russian assets worth approximately 260 billion euros ($280.62 billion), including Russian Central Bank reserves, have been frozen under sanctions imposed after Russia’s full-scale invasion of Ukraine in February 2022. The majority of these assets are held in Euroclear, a Belgium-based Central Securities Depository, positioning the European Union as a key player in any potential plans for Russian asset utilization.

Hungary’s pro-Russian Prime Minister Viktor Orbán informed other EU leaders in December that he might veto the sanctions extension, which requires unanimous approval. The current measures are set to expire on 31 January.

János Bóka, Hungary’s EU Affairs Minister, told reporters on 16 January that Budapest wants to await developments in US policy, possibly hoping for more pro-Russian policies of the incoming Trump administration.

“Now there’s a significant change in the US administration… a meaningful exchange should take place before we decide to roll over the sanctions regime for another six months,” Bóka said.

At stake are approximately €190 billion of Russian state assets held at Belgium-based Euroclear. Officials believe these assets, whose profits are designated to repay a $50 bn Ukraine loan, are crucial for potential ceasefire negotiations.

While the officials’ primary focus is on convincing Orbán to keep the sanctions, a senior EU diplomat in regular contact with Hungarian officials expressed serious concern about the situation, noting “there’s a high chance Orbán does not break.”

According to FT, citing four officials, one contingency option involves utilizing a 1944 wartime decree that would allow Belgian King Philippe to prevent asset transfers from the country.

Belgium’s Foreign Ministry spokesperson stated they are “doing everything possible to reach an agreement on the renewal of sanctions against Russia,” while acknowledging past successes in reaching consensus.

Some member states have suggested removing Hungary’s voting rights, though officials believe this would likely fail to gather required unanimous support from other states, according to FT.

“If Orbán doesn’t yield, the only solution is a national one,” a senior Commission official involved in preparations told FT.

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