The legal mechanism deals a major blow to the Kremlin’s hopes of unfreezing its money as part of a post-war peace settlement — an idea that has been championed by U.S. President Donald Trump but remains unpopular in Europe.
The EU’s new emergency powers will remain in place until “Russia ceases its war of aggression against Ukraine, and provides reparations to Ukraine,” according to a legal text, seen by POLITICO, that was backed by the EU’s 27 ambassadors on Thursday afternoon.
In a major boost to Ukraine, the legal workaround significantly reduces the chance that pro-Kremlin countries in Europe, such as Hungary and Slovakia, will hand back the frozen funds to Russia.
The emergency clause effectively overhauls the current rules, which compel EU countries to unanimously reauthorize the sanctions every six months.
Kremlin-friendly countries are thereby set to lose their power to release the sanctioned money simply by voting “no” on sanctions renewal. Were that to happen after the EU provided an assets-backed loan to Kyiv, the EU’s 27 capitals would be on the hook to repay the loan to Russia.
The EU justified the seismic legal change on the grounds that handing back the assets to Russia would wreak havoc on the EU economy — and potentially fuel hybrid attacks by the Kremlin across the bloc.