Stay informed with free updates
Simply log in to The war in Ukraine myFT summary — delivered straight to your inbox.
EU officials are preparing replacement measures, including using an 81-year-old law involving the Belgian king to protect the bloc’s sanctions against Russia after Hungary threatened to veto their renewal.
Hungarian Prime Minister Viktor Orbán told the union’s other 26 leaders in December that he could block this month’s renewal of EU sanctions against Russia, which require unanimous approval – a move that would see the measures expire on January 31.
Orbán said he was waiting for Donald Trump’s inauguration as US president on Monday. If Trump eases US sanctions on Moscow, Orbán said he would insist the EU follow suit.
“Now there is a significant change in the American administration. . . a significant exchange should take place before we decide to extend the sanctions regime for another six months,” János Bóka, Hungary’s minister for EU affairs, told reporters on Thursday. “We want to hold off on our decision until we know how the US administration sees the future of the sanctions regime.”
The outgoing Biden administration on Wednesday he again listed about 100 entities from the finance, energy and defense sectors under another bill involving Congress in an effort to complicate any Trump efforts to remove them from the Russia sanctions list.
While EU officials say their primary focus is on persuading Orbán to maintain frozen sanctions against companies and Russian state assets in the EU, they are working out measures that could protect at least some of them.
They include around 190 billion euros of Russian state assets in the Belgian central securities depository Euroclear. Profits from those assets will repay a $50 billion loan to Ukraine, and officials believe they are a key part of a potential ceasefire deal.
If the sanctions were to end, the official described how “the money is in Russia the next day” because financial intermediaries would have no legal basis to keep it. Trade restrictions and sectoral sanctions such as oil import bans would also end.
“I’m really very worried about this, and others should be too,” said a senior EU diplomat who is in regular talks with Hungarian officials. “There is a big chance that Orbán will not break.”
Since state assets are physically located in the Belgian entity, one fallback option is to use a wartime decree passed in 1944 that allows King Philippe to block the transfer of assets out of the country, according to four officials involved in the discussions.
The royal palace declined to say whether it had approached the king, adding that responsibility for such a decree rests with the government, although it would need to be signed by the sovereign.
Euroclear declined to comment.
“Belgium, together with other EU member states, is doing everything to reach an agreement on the renewal of sanctions against Russia. We have been able to reach an agreement in the past and we will continue to work to ensure that this is the case again,” said a spokesman for the Belgian foreign ministry.
Belgium has long resisted implementing national real estate measures, which it fears would leave it exposed to legal challenges from Russia. One Belgian official said using the emergency powers would violate a bilateral investment agreement Belgium has with Russia.
“If Orbán does not give in, the only solution is national,” said a senior Commission official involved in the preparations.
Several member states have proposed stripping Hungary of its voting rights to push through reconstruction, but such a drastic move would likely fail to secure the necessary unanimous support from all other states.
Anitta Hipper, the EU’s foreign affairs spokeswoman, said “work is underway to ensure a smooth and timely agreement” by member states on extending the sanctions.
Additional reporting by Henry Foy and Marton Dunai in London and Andy Bounds in Brussels