In an effort to secure U.S. backing for a USD 50 billion loan to Ukraine, the European Commission has proposed changes to the management of sanctions against Russia. These adjustments aim to address Washington’s concerns about the potential for individual EU countries, particularly Hungary, to block the renewal of these sanctions, which could jeopardise the loan.
The EC’s proposals against letting one single country halt sanctions
The U.S. has expressed unease over the current system, which requires EU sanctions to be renewed every six months. With the power to veto, any single member state could unfreeze Russian assets by halting the sanctions, posing significant risks to using these frozen assets, mostly held in Europe, to repay Ukraine’s loan. According to Politico, the European Commission has therefore proposed three potential solutions.
- The first and most favoured plan would freeze Russian sovereign assets for a five-year period, with annual reviews. Under this system, a majority of EU member states would need to agree to unfreeze the assets, making it harder for any one country—Hungary being the prime concern—to derail the process.
- The second option suggests renewing the asset freeze every 36 months, requiring unanimous approval from all EU members. Though it retains a veto possibility, this approach is seen as a practical middle ground and has gathered broad support within the Commission and from most EU countries.
- The third, and least likely, proposal would extend the renewal period for all EU sanctions to 36 months. This option has met resistance not just from Hungary, but potentially from Germany as well.
While these proposals work to align EU policy with U.S. interests, they come at a time when broader economic challenges are facing Europe. During the recent informal meeting of EU finance ministers in Budapest, Hungary’s finance minister, Mihály Varga, emphasised the stark contrast between Europe’s current economic performance and that of other global regions. According to Index, he pointed out that the EU’s annual growth rate is lagging significantly, ranging between 0.5% and 1%, while the U.S. is growing at five times this rate, and China at ten times.
Decision to be made by EU member states
Varga also addressed how the war in Ukraine is disproportionately affecting Europe’s economy, further stressing the importance of ending the conflict through negotiations. He noted, “for us, the Ukrainian front is not some distant point on the map; it’s right next door. Hungarian youth from the minority in Ukraine are also fighting and dying on the front lines.” He reiterated Hungary’s stance of advocating for peace, given the toll the war is taking on both Hungary and Europe as a whole.
These broader economic concerns add urgency to the Commission’s proposals. As Europe struggles to maintain financial stability, it is crucial to prevent any internal political disagreements—particularly over sanctions—from undermining collective efforts to support Ukraine.
Ultimately, the decision on the sanctions regime will be made by EU member states, with the European Council playing a central role in determining which path to follow, Portfolio writes. The discussions among finance ministers in Budapest reflect a deeper need for unity within the EU, as the continent grapples with both the ongoing war and its economic repercussions.
Read also:
- Will Brussels withhold further EU funds from Hungary?
- VSquare: Hungary acts as middleman for China’s EUR 500 million loan to Orbán’s Balkan allies
Featured image: depositphotos.com
Beware of Hungarian politicians exaggerating about the strength of the Chinese economy. A recent estimate for 2024 by Goldman Sachs is that China will finish the year with GDP growth of 4.7%. In China anything below 5% which is the minimum target of the Chinese government is considered a crisis. Citigroup cut its’ 2025 GDP growth projection to 4.2%. Domestic demand in China is anemic and they have been enduring a disasterous real estate market that the government has been working to prevent from collapsing. People have lost their life savings putting deposits on apartments that were never constructed. Hundreds of thousands of apartments were built that sit empty in ghost cities. That and overcapacity in factories is the result of communist party control of the economy instead of letting a free market determine investment. China never recovered from the harsh Covid shutdown the government enacted. It is absolutely strange that Fidesz hitches itself to a communist controlled country as some kind of ideal.
It was just a matter of time, that the Orban “Games” of Politics – his self belief FALSELY of his opinions, reputations and influence, inside the European Union – over DEMOCRACY – that over the time of the Sanctions imposed on Russia by the “other” 26 member country’s of the European Union, that Orban would be made look IMPRUEDENT.
Orban – we know that post the Russian War on the Ukraine – prior to the War, that the Orban led Fidesz Government of Hungary – had GRAVELY damaged it’s reputation in the European Union, through it’s IN-ability to COMPLY.
Orban, the leader – the Prime Minister of a country, that in rulings handed down by the Courts of the European Union – pre the Russian War on the Ukraine and post the outbreak of the War – that Hungary had RIGHTFULLY been judged GUILTY of it’s non compliance to the Laws – the RULES of Membership in being a Member Country of the European Union.
Orban – what DEBT he has DELIVERED Hungary – in monies OWED by Hungary just to the European Union, that are of a compoundable interest rate charge daily schedule that NOW and the longer they remain OUTSTANDING for Payment – Perilous.
PRESSURIZATION just continues to GROW on Hungary, that all comes back on the name – Victor Mihaly. Orban for what he has DELIVERED – taken Hungary to being, as a country, after 15 years in Government, with his Fidesz Ministry, that is a cataclysmic DISASTER – Worsening.
It was just a matter of time, that the Orban “Games” of Politics – his self belief FALSELY of his opinions, reputations and influence, inside the European Union – over DEMOCRACY – that over the time of the Sanctions imposed on Russia by the “other” 26 member country’s of the European Union, that Orban would be made look IMPRUEDENT.
Orban – we know that post the Russian War on the Ukraine – prior to the War, that the Orban led Fidesz Government of Hungary – had GRAVELY damaged it’s reputation in the European Union, through it’s IN-ability to COMPLY.
Orban, the leader – the Prime Minister of a country, that in rulings handed down by the Courts of the European Union – pre the Russian War on the Ukraine and post the outbreak of the War – that Hungary had RIGHTFULLY been judged GUILTY of it’s non compliance to the Laws – the RULES of Membership in being a Member Country of the European Union.
Orban – what DEBT he has DELIVERED Hungary – in monies OWED by Hungary just to the European Union, that are of a compoundable interest rate charge daily schedule that NOW and the longer they remain OUTSTANDING for Payment – Perilous.
PRESSURIZATION just continues to GROW on Hungary, that all comes back on the name – Victor Mihaly. Orban for what he has DELIVERED – taken Hungary to being, as a country, after 15 years in Government, with his Fidesz Ministry, that is a cataclysmic DISASTER – Worsening.
HAHAHAHAHA!!! E.U.’s sanctions have hardly been a mosquito bite to Russia. Its economy is burgeoning while most of Europe’s is, at best, stagnating. The only thing the sanctions have achieved is that Russia and its consumers have turned to other parts of the world to fulfill their needs, which only hurt European businesses and no-one else.
Some people are so easy to manipulate it’s hilarious.
The “Hungarian youth from the minority in Ukraine” were born and raised in Ukraine, also speak either Ukrainian or Russian, and hold Ukrainian passports? Speaking of “toll” – perhaps he missed the attacks on the Ukrainian population. And the use of chemical weapons by the Russians, in the trenches. Both are war crimes, by the way.
https://www.state.gov/russia-spreads-disinformation-to-cover-up-its-use-of-chemical-weapons-in-ukraine/