Hungary has filed a lawsuit against the Council of the European Union’s decision at the Luxembourg-based General Court. The Hungarian government claims that it is unlawful to allocate almost all yields from frozen Russian central bank assets to support Ukraine. The legal case may last for years, but could set a precedent for future decision-making.

Hungary initiates lawsuit

As reported by Portfolio, Hungary has submitted an application to the General Court of Luxembourg contesting decisions of both the Council of the European Union and the European Peace Facility (EPF). The government objects to the fact that yields from frozen Russian central bank assets are being almost entirely used (99.7 percent) for military support to Ukraine.

According to Hungary, the Council’s resolution adopted in May 2024 and the EPF’s implementing decision from February 2025 violate the EU’s fundamental principles of lawful decision-making. The official lawsuit was launched on 25 August, when the case was listed in the Official Journal of the European Union. Although the proceedings are only at an early stage, the outcome could have far-reaching implications for the future application of veto rights.

Billions at stake

The stakes are high: around EUR 200 billion of Russian assets are frozen in EU member states, generating annual yields of EUR 3–5 billion. According to current regulations, these resources are directed partly toward military support and partly to civil objectives.

So far, the EPF has awarded more than EUR 11 billion to Ukraine, and a permanent source of revenue could be opened. However, Hungary objects that its vote was disregarded in the process, on the grounds that it was not considered a “contributing Member State”. The Hungarian side claims this violates the decision-making procedures codified in the EU’s foundational treaties.

Political and legal consequences

The political weight of the case is considerable. In recent years, Hungary has repeatedly exercised its veto power over financial packages supporting Ukraine, including the EUR 50 billion aid package approved at the end of 2023. As a result, several member states have sought mechanisms to bypass obstacles created by unanimous decision-making.

According to the European Council’s legal service and the majority position, the use of yields from frozen assets does not constitute a new budgetary commitment, thus not requiring unanimous approval. If the court sides with Hungary, future Council decisions of this kind may be subject to stricter legal oversight.

Lengthy process ahead

Proceedings before the General Court may take years. The written phase will be followed by the Advocate General’s opinion, then hearings, and ultimately a ruling, with potential appeals to the Court of Justice of the European Union. In the meantime, the contested decision remains in force, allowing continued support financed from asset yields.

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