Hungary has initiated legal proceedings against the European Union at the Court of Justice of the European Union in Luxembourg. The lawsuit challenges a decision to allocate profits from frozen Russian assets to fund aid for Ukraine. The legal action, formally accepted for review on August 25, 2025, contests the allocation of 99.7% of net profits from managing these assets to the European Peace Facility (EPF) for Ukraine's benefit.
Hungary's primary argument is that the EU Council's May 2024 decision was made without sufficient consultation and bypassed established procedural norms, thereby infringing upon Hungary's right to a veto. Hungarian Minister of Foreign Affairs, Péter Szijjártó, has expressed strong opposition, emphasizing Hungary's foreign policy focus on cooperative relations with major global powers, including Russia, the United States, and China. He has criticized EU leadership for isolating regions and limiting economic ties, suggesting a divergence in strategic vision.
The European Peace Facility (EPF), an off-budget fund established to finance external actions with military or defense implications under the Common Foreign and Security Policy, is central to this dispute. Initially valued at approximately €5 billion for 2021-2027, the EPF is financed through member state contributions. Hungary's legal challenge also targets a subsequent EPF steering committee decision from March 2025, which reportedly stated that Hungary's vote should not be considered when allocating individual funds to Ukraine.
This legal battle is anticipated to be lengthy, with court proceedings potentially lasting several years. During this period, payments to Ukraine from the contested asset profits are expected to continue as the decisions remain in force until a final ruling. Hungary's consistent opposition to EU support for Ukraine and its efforts to maintain economic ties with Russia have previously strained relations with other EU member states. The case could establish a significant precedent regarding the protection of member states' veto powers within the EU's decision-making processes.
Globally, the management of approximately $300 billion in frozen Russian sovereign assets remains a complex issue, with a significant portion held within the EU. The EU and its member states have provided substantial aid to Ukraine since Russia's 2022 invasion, with the EPF alone disbursing €12.8 billion. Hungary's legal challenge highlights the intricate geopolitical and economic considerations within the European Union as it navigates its support for Ukraine amidst ongoing international tensions.