Hungary blocked a $50 billion loan to Ukraine before the US elections

Hungary has blocked a $50 billion loan to Ukraine, which will be repaid with future revenues from frozen Russian assets, before the end of the US presidential election. The elections will be held on November 5 — only then will the European Union make a final decision on the validity of sanctions against the Russian Federation.

This was reported by the Minister of Finance of Hungary Mihaly Varga, Reuters reports.

"We believe that this issue, the continuation of Russian sanctions, should be resolved after the US elections. We have to see in which direction the future US administration will move with this issue," the Finance Minister Mihaly Varga said at a press conference.

Hungary proposed such an idea a long time ago. But then the European Commission told EU countries that the US could join the initiative even after the election, but added that the bloc must complete the legislative work, which also needs the approval of the European Parliament, by the end of October.

What preceded

First, the US and the EU were to contribute $20 billion each. The remaining $10 billion will be provided by G7 members Canada, Great Britain and Japan, which are already involved. However, the US later set the blocʼs conditions. EU sanctions, which freeze Russian assets, must be renewed by a unanimous vote of member states every three years, instead of the current six months. Thus, the USA demands guarantees that these assets will remain frozen, since the profits from them should be used to support Ukraine. Later, the European Commission presented the EU ambassadors with three new options for renewing sanctions on Russian frozen assets.

Even if the EU does not change the sanctions, the US will still contribute a certain amount to the planned $50 billion, but it will be smaller. If the EU changes its legislation on sanctions against the Russian Federation and ensures that Russian assets remain frozen, the US will contribute the promised $20 billion.

Frozen Russian assets

The value of frozen Russian sovereign assets in the EU is almost €211 billion. In total, the European Union, the G7 countries and Australia have frozen approximately €260 billion in securities and cash. In June 2024, the "Big Seven" countries agreed to provide Ukraine with a $50 billion loan by the end of the year, which will be repaid with profits from Russian assets.

Ukraine has already received several tranches of aid from the EU proceeds from frozen Russian assets. And on September 20, the head of the European Commission Ursula von der Leyen declared that the European Union will provide Ukraine with a loan of €35 billion at the expense of the frozen assets of the Russian Federation. The day before, on September 19, she announced that the European Union would allocate €160 million to support Ukraineʼs energy security ahead of winter. Part of the amount will be provided from frozen Russian assets.

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