EditWhat drives Orbán’s veto against Ukraine funding?
The lawsuit escalates the challenge by targeting a flagship EU initiative designed to hold Russia financially accountable for its aggression
Hungary’s government, led by Prime Minister Viktor Orbán, has long been a contentious player in EU politics, often obstructing Brussels’ efforts to support Ukraine since Russia’s full-scale invasion in 2022, writes Sofia Kosarevych, analyst at the Dniester Center. Below is an edited version of her analytical article, published by EUalive’s partner European Pravda.
Now, Budapest has turned its attention to a new battleground: the fate of frozen Russian assets. This move, marked by a lawsuit filed with the EU Court of Justice, challenges the EU’s decision to channel income from these assets to aid Ukraine, raising questions about European unity, sovereignty, and the legal framework underpinning the EU’s Common Foreign and Security Policy (CFSP).
The stakes: frozen Russian assets and Ukraine’s aid
The EU holds over $200 billion in frozen Russian Central Bank reserves, which generate an estimated $3–5 billion in annual income. In 2024, EU leaders agreed to direct 99.7% of this income to the European Peace Facility (EPF) to fund military and humanitarian aid for Ukraine.
This decision, formalised under EU Regulation No. 2024/1469, established that these earnings are not sovereign assets and can be used to support Ukraine without violating international law.
However, Hungary – widely regarded as the EU’s most Kremlin-friendly member, has challenged this framework. On 26 February, the EPF steering committee decided to allocate nearly the entire second tranche of this income to Ukraine, primarily for military aid. Hungary, having not contributed financially to this tranche, was excluded from the vote, prompting Budapest to argue that it was unlawfully denied its voting rights.
Hungary’s legal challenge
Hungary’s lawsuit, filed against the EPF and the EU Council, contends that the exclusion from the vote violates EU institutional guarantees and disrupts the balance of decision-making in security policy.
Hungary takes EU Council to court over use of frozen Russian assets
Budapest asserts that its membership in the EU Council and participation in CFSP mechanisms grant it voting rights, regardless of financial contributions to specific tranches.
Formally, the lawsuit targets the EPF committee’s decision of 26 February. In practice, however, it threatens the entire mechanism for using Russian asset income to support Ukraine. If successful, the lawsuit could unravel the legal and procedural foundations established by the 2024 Regulation, forcing a reevaluation of how these funds are allocated.
Potential outcomes and their implications
The EU Court of Justice’s ruling will have far-reaching consequences, both legally and politically. According to Sofiia Kosarevych, analyst at the Dnistryanskyi Centre, several scenarios are possible:
Lawsuit Rejected: If the court upholds the EPF’s “contributing member state” criterion, it will reinforce the legitimacy of excluding non-contributing states like Hungary from voting.
This would strengthen the EPF’s authority, solidify the use of Russian asset income for Ukraine, and limit the veto power of individual member states in similar mechanisms. Such an outcome would signal robust EU unity and commitment to supporting Ukraine.
Lawsuit Upheld: If Hungary’s claims are validated, the 26 February decision could be annulled, potentially retroactively. This would deem all actions taken under the decision – such as funds already disbursed for Ukraine’s military aid, legally invalid. While interim measures might preserve some executed contracts, the EU would face the daunting task of redesigning the funding mechanism. This could delay or derail aid to Ukraine, especially amid waning US support and internal EU divisions.
A successful lawsuit would also set a precedent, empowering member states to challenge collective EU decisions on procedural grounds. This could weaken the CFSP and erode trust among member states, complicating future efforts to confiscate or utilize Russian assets.
Hungary’s broader strategy
Hungary’s actions fit a broader pattern of obstructionism. Since Russia’s invasion, Budapest has repeatedly delayed or blocked EU aid packages, resisted sanctions against Russia, and slowed Ukraine’s EU accession talks.
Orbán’s government has justified its stance by emphasising national sovereignty and economic interests, often citing Hungary’s reliance on Russian energy.
This lawsuit, however, escalates the challenge by targeting a flagship EU initiative designed to hold Russia financially accountable for its aggression.
By framing the issue as a defense of voting rights, Hungary seeks to legitimise its position while potentially undermining the EU’s ability to act decisively. Critics argue that Budapest’s actions align with Kremlin interests, raising concerns about the influence of pro-Russia sentiment within the EU.
Orbán’s lawsuit is more than a legal dispute – it is a stress test for the EU’s ability to balance sovereignty, democratic principles, and collective action. If the court rules against Hungary, it will affirm the EU’s commitment to holding Russia accountable and supporting Ukraine. If Hungary prevails, it could embolden other member states to challenge collective decisions, jeopardling further discord and jeopardling further discord and complicating aid to Ukraine at a critical juncture.
For Ukraine and its allies, the stakes are high. The lawsuit not only threatens immediate financial support but also risks derailing broader efforts to confiscate Russian assets badly needed for post-war reparations.
Caption: Hungary’s Prime Minister Viktor Orban talks to the media as he arrives to attend the EU leaders’ Summit in Brussels, Belgium, 26 June 2025. EU leaders gather for a two-day summit to address geoeconomic challenges and the ongoing developments in Ukraine and the Middle East, among other topics. EPA/OLIVIER MATTHYS
Hungary takes EU Council to court over use of frozen Russian assets
Updated: September 5, 2025 - 12:46
