EU Commission proposes ending unanimity rule to bypass Hungary’s veto on Russia sanctions

The European Commission has proposed replacing the current unanimity requirement with a qualified majority system for extending sanctions against Russia.

According to a Commission document obtained by Politico, this step aims to prevent vetoes imposed by the Budapest government.

Under the current system, the approval of all member states is required to extend sanctions every six months. The Commission’s new proposal, presented to the permanent representatives of EU countries, envisions a shift to qualified majority voting.

This change is reportedly aimed at thwarting Hungary’s demands, such as the “return of Russian assets.”

Loan to Ukraine from frozen assets

The Commission has also communicated to member states the idea of providing a €140 billion loan to Ukraine using frozen assets belonging to the Central Bank of Russia.

It was noted that the loan would be disbursed in tranches and used for both defense and budgetary expenditures.

German opposition leader Friedrich Merz stated yesterday that he supports the initiative but expressed that the money should be used solely for the purchase of military equipment.

Merz explained that repayment of the loan would only be possible if Moscow compensates Ukraine for the damages caused by the war.

The Reuters news agency had previously reported that the plan, dubbed a “reparation loan,” would amount to €130 billion. The report stated that the mechanism would involve exchanging Russian assets for zero-coupon bonds issued by the European Commission.

19th sanctions package on the way

This proposal will be considered alongside the 19th sanctions package being prepared against Russia. European Commission President Ursula von der Leyen announced that the new package will cover banks, liquefied natural gas, the Mir payment system, and new ships participating in the “shadow fleet” used by Russia for its oil trade.

Meanwhile, the EU is under pressure from the US, which wants to tighten sanctions and take measures against India and China for purchasing Russian oil. However, Hungary and Slovakia have repeatedly threatened to block new energy-related initiatives.

According to the Financial Times, the Commission is considering the option of releasing approximately €550 million in EU funds to Hungary to bypass Prime Minister Viktor Orbán’s veto.