Hungary won't unblock safeguards for G7 loan to Ukraine linked to proceeds from frozen Russian assets, vital for US

Corrected on 9 October: The headline and first sentence have been corrected

Hungary has decided not to endorse the EU's decision, which is important for US participation in the G7 loan to Ukraine, which will be repaid from the proceeds from frozen Russian assets, until after the US presidential election.

As reported by Euronews, according to Mihály Varga, Hungary's Finance Minister, the two US presidential contenders, Kamala Harris and Donald Trump, advocate opposing methods to settling Russia's war against Ukraine: "One, in the direction [of] peace. And [the other] continue to the war."

As a result, the Hungarian minister stressed that the EU should plan the following steps based on who the Americans choose.

"We believe that this issue should be decided – the prolongation of the Russian sanctions – after the US elections. That was the Hungarian position… We have to see in which direction the future US administration is going [on] this issue," he added.

This concerns the US$50 billion loan plan for Ukraine, agreed upon by G7 leaders, that will be repaid with profits from frozen Russian assets – meaning that Kyiv will not have to return the money.

The EU should provide €35 billion under the terms of the proposal, but this requires a reform in the sanctions mechanism, which allows for the freezing of assets in the EU.

Whether this extension should be formalised forever or for longer durations than the normal half-year was a source of contention in Brussels.

*Hungary's obstruction pertains to this decision within the EU, rather than the decision regarding the European portion of the loan.