EU can avoid Hungary block on Russian asset plan for Ukraine, Borrell says

EU foreign policy chief Josep Borrell attends the Shangri-La Dialogue in Singapore June 1, 2024. REUTERS/Edgar Su/ File Photo

(Reuters) -The European Union has found a way to use proceeds from frozen Russian assets to buy arms for Ukraine despite hold-ups from Hungary, EU foreign policy chief Josep Borrell said on Monday.

EU governments agreed in May to use profits from the assets frozen inside the bloc to help Ukraine, with 90% of funds earmarked for military aid. But Hungary has been holding up approval of the necessary legal measures, diplomats say.

Hungary maintains warmer relations with Moscow than any other EU country. It does not give arms to Ukraine and Hungarian Prime Minister Viktor Orban has criticised other EU and NATO members for doing so, saying they are fueling the war.

With a first tranche of proceeds worth 1.4 billion euros ($1.5 billion) due next week, EU officials had been scrambling for a way to allow the funds to be used immediately to help Ukraine defend itself from Russia's invasion.

Borrell said EU officials had now found a way to approve the measures without needing the consent of any member country that abstained from the original decision.

"We have a legal procedure in order to avoid any kind of blockage," Borrell said before a meeting of EU foreign affairs ministers in Luxembourg.

"Since Hungary didn't participate in the decision, it is not necessary that they ... participate in the implementation," he told reporters.

"Now we have to implement this decision. The money will come next week. And I cannot have this money in my pocket - this money is for military support to Ukraine."

Borrell said he hoped the ministers would endorse the plan at their meeting.

Hungarian Foreign Minister Peter Szijjarto did not speak to reporters on his way into the meeting.

The EU's plan for the immediate use of profits from frozen Russian assets is separate from a decision by G7 leaders this month to use future proceeds to fund $50 billion in loans to Ukraine.

($1 = 0.9336 euros)

(Reporting by Bart Meijer and Andrew Gray, editing by Tassilo Hummel and Michael Perry)