Brussels, 12 December 2025 (dpa/MIA) - European Union countries agreed by a large majority on Friday to indefinitely freeze Russian state assets in the EU, clearing the first hurdle in making the money available to Ukraine as a reparations loan.

To date, all 27 member countries have had to agree unanimously every six months to keep the funds frozen under EU sanctions in response to Russia's full-scale invasion of Ukraine in 2022.

Kremlin-friendly Hungary has repeatedly threatened to stop agreeing to the periodic extensions.

To freeze the money indefinitely, EU countries have invoked an economic emergency mechanism which allows switching from a unanimous vote to a majority vote.

The countries argue that Russia's war on Ukraine is causing severe economic challenges and that the transfer of funds to Russia must therefore be urgently prevented to limit harm to the EU economy.

Both Hungary and Russia have threatened legal action ahead of the decision.

The majority vote went against the will of Hungary and Slovakia. The two countries argue that the EU's action could undermine US President Donald Trump's efforts to end Russia's war of aggression against Ukraine.

The move to freeze Russia's state assets in the EU worth around €210 billion ($246.5 billion) indefinitely aims to facilitate plans to provide some of the money to Ukraine as a long-term reparations loan.

The European Commission has proposed to provide Ukraine with €90 billion in tranches to cover financial and military needs in the years 2026 and 2027 and an additional €45 billion to repay other loans granted to Kiev over past years.

Kiev would only have to repay the state asset loans if Russia pays reparations to Ukraine after the war.

Top EU leaders praise decision

European Commission President Ursula von der Leyen said the vote is "sending a strong signal to Russia" that it cannot continue "this brutal war" without consequences and is a "powerful message to Ukraine.

"We want to make sure that our brave neighbour becomes even stronger on the battlefield and at the negotiating table."

EU top diplomat Kaja Kallas said the decision means the billions "in Russian funds stay on EU soil, unless Russia fully pays reparations to Ukraine for the damage it has caused."

Hungarian complaints

The government in Budapest said in a statement published on Thursday that it was deeply concerned about the move and claimed that the emergency mechanism was not correctly applied and reserved the right to bring the matter before the European Court of Justice (ECJ).

Russia's central bank filed a lawsuit on Friday against the Belgian firm Euroclear in response to the EU's move to permanently freeze Russian state assets held in Europe.

Brussels-based Euroclear manages roughly €185 billion of the total €210 billion in Russian assets frozen in the EU.

The central bank's lawsuit relates to "the unlawful actions of the Euroclear depository, causing losses to the Bank of Russia" as well as "the mechanisms officially considered by the European Commission," a statement published on the bank's website on Friday said.

A Moscow arbitration court will hear the case, it said.

Experts see the move as Russia's first step in preparing countermeasures targeting European capital still remaining in the country.

Belgium continues to oppose the reparations loan

Belgium, as the country where the lion's share of the Russian funds are held by Euroclear, still opposes the loan.

The Belgian government has so far blocked the plan, citing legal and financial risks.

It fears in particular that Moscow could retaliate against European private individuals and companies, for example through expropriations in Russia.

German Chancellor Friedrich Merz, one of the most vocal proponents of the loan, has been hopeful that he can win over Belgian Prime Minister Bart De Wever for the proposed scheme.