Hungary sues EU for funding Ukraine military from frozen Russia assets, seeks its right to veto such aid

Hungary has taken the European Union to court over the bloc’s decision to channel proceeds from frozen Russian assets into military support for Ukraine. The European Court of Justice confirmed on August 25 that it has formally accepted Budapest’s lawsuit, setting up a high-stakes legal battle within the EU.

At the heart of the case is the Council of the EU’s 2024 decision to direct billions of euros in interest generated from Russian sovereign assets to the European Peace Facility (EPF), the union’s central defence aid mechanism.

In its filing, Hungary is asking the court to annul that decision, as well as a March 2025 ruling by the EPF to spend these funds directly on weapons and military equipment for Ukraine.

Hungarian officials contend that their government abstained from the original vote authorising the use of Russian assets. They argue the EU’s subsequent interpretation, that abstention implied no veto and allowed funds to flow without Budapest’s approval, violates their rights within the union’s decision-making framework.

The contested arrangement, implemented in February, grants Ukraine 99.7% of annual interest from frozen Russian assets, estimated at €3–5 billion ($3.5–5.8 billion) each year. Western governments immobilised roughly $300 billion in Russian sovereign wealth after Moscow’s full-scale invasion of Ukraine, with about two-thirds of that sum held in European institutions.

The lawsuit comes as Hungary continues to stand out as the most Moscow-friendly government in the EU. Prime Minister Viktor Orban has repeatedly resisted sanctions against Russia, opposed military aid to Kyiv, and blocked progress on Ukraine’s accession talks.

His stance has led to repeated clashes with fellow EU members who view sustained support for Ukraine as essential to countering Russian aggression.

Tensions recently flared when reports suggested that US President Donald Trump persuaded Orban to lift his veto on negotiations over Ukraine’s EU membership. But the Hungarian government has not relented on its opposition to the use of frozen Russian funds, highlighting Budapest’s determination to assert influence over EU policy in this domain.

By suing the EU, Hungary is not only contesting the financial mechanism underpinning Ukraine’s war effort but also challenging the balance of power inside the bloc, testing whether abstention should be treated as tacit consent or as grounds for a veto. The outcome of the case could set a precedent for future decisions on collective defence financing in Europe.