Estonian Foreign Minister Margus Tsahkna has stated that Hungary’s blocking of the renewal of sanctions against Russia would force G7 and EU countries to cover multibillion-euro loans to Ukraine that were backed by Russian assets.

Source: Tsahkna in a comment to Financial Times, as reported by European Pravda

Details:Tsahkna said that if Hungarian Prime Minister Viktor Orbán follows through on his threat to block the renewal of EU sanctions, the financial burden of the multibillion loans to Ukraine will fall on the G7 and EU countries. This is because the loans are secured by profits from frozen Russian assets.

"The problem [is] that these assets which are guaranteeing this loan will be gone," Tsahkna noted.

Most of the frozen assets are held at Euroclear, a financial intermediary based in Belgium.

"If they are going to block it, then the sanctions will be down. And the central bank assets will be delivered to Russia, to [Vladimir] Putin, as an award. We cannot let it happen," Tsahkna stressed.

The European Commission is reportedly working on a backup plan in case the sanctions are not extended, but most of the legal options come with serious complications.

Tsahkna believes that the EU needs "some kind of legal frame or some kind of procedure".

Estonia advocates for the complete confiscation of Russian assets by the G7 countries, rather than merely freezing them.

"It would be the most clear and most understandable solution," Tsahkna said.

He added that negotiations with Hungary must continue, as Orbán is dependent on EU funds.

Background:

• Earlier, the Financial Times reported that the EU is growing increasingly impatient with Hungary, which consistently blocks key EU decisions, with some calling for its voting rights to be revoked.
• Recently, it was reported that lawyers in Brussels are preparing a plan B to help override Hungary's veto of the June extension of sanctions against Russia.

Read more: Hungary defies sanctions: Trump ally moves to unfreeze billions in Russian assets

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