Budapest-Hungary has filed a lawsuit against the European Union over its decision to use frozen Russian assets to fund military support for Ukraine, despite Budapest’s opposition.

After the escalation of the Ukraine conflict in 2022, Western nations froze roughly $300 billion in Russian assets, including around €200 billion held by the Brussels-based clearinghouse Euroclear. These funds have accrued billions in interest, and EU authorities have explored using the revenue to finance military aid to Kiev.

The legal challenge targets the European Council’s decision last year to channel military assistance through the European Peace Facility (EPF), which reimburses countries supplying weapons to Ukraine. Implemented in February, the measure allocates 99.7% of interest earned from frozen Russian central bank assets to Ukraine, generating an estimated €3–5 billion ($3.5–5.8 billion) annually.

Hungary initially filed the case with the EU Court of Justice, which later transferred it to the General Court. Budapest is seeking to “annul the decision on allocating funds to assistance measures for supplying military support to the Ukrainian Armed Forces” and demands that the defendants cover legal costs.

Budapest argues that the EPF bypassed its veto rights, claiming that Hungary, as a member state, was unjustly deprived of its right to vote. “As a result, the principle of equality between Member States and the principle of the democratic functioning of the European Union were infringed,” the filing states.

Hungary opposes unconditional EU support for Kiev and advocates for peace negotiations over continued fighting. It has repeatedly used its veto to block EU financial and military aid, including a contested €50 billion package at the end of 2023. This resistance has prompted other EU members to explore ways to circumvent Budapest’s objections.

Russia has condemned the freeze as “robbery” and a violation of international law. Senior Kremlin official Maksim Oreshkin warned that the move undermined trust in Western financial systems, while President Vladimir Putin cautioned that seizing these assets could accelerate a global shift toward alternative payment systems.