Putin ally tells CNBC using frozen Russian assets is a ‘dead end’

One of Russia’s last remaining allies in the European Union told CNBC he believes there is no way forward for proposals to fund the rebuilding of Ukraine via frozen Russian assets.

The European Commission – the EU’s executive arm – is considering using seized Russian assets held in Europe to provide further financial support to Ukraine.

Speaking to CNBC as officials arrived at the European Council meeting, Hungarian Prime Minister Viktor Orbán said proposals to use the immobilized assets as a means to assist Ukraine had been “killed.”

“It’s [a] dead end. It’s over,” he said. “There is no sufficient level of support behind it.”

Orbán is widely seen as Russia’s closest ally within the EU, and has been a vocal critic of plans to use potentially hundreds of billions of euros of frozen assets to fund reparations loans for Kyiv. Hungary isn’t alone in having doubts over the measures, however.

Belgium, whose support is critical given that huge amounts of frozen assets lie in the Brussels-based clearing house Euroclear, has expressed concern over possible legal and financial risks. Italy and Bulgaria have also supported Belgium’s resistance to the proposals.

For its part, the Kremlin has said such a move would be tantamount to justification for war, and Russia’s central bank announced last week it was suing Euroclear in a Moscow court “for recovery of losses caused to the Bank of Russia.”

The European Council meeting, due to conclude on Friday, will have funding options for reparations loans to Ukraine high on the agenda.

“Without new additional financial support from the EU and other international donors, Ukraine is expected to run out of funds early in 2026,” the European Parliament said in a briefing on Wednesday, adding that Hungary had already blocked the option to use the headroom in the EU budget to provide funding to Kyiv. Decisions on use of the EU’s own finances require a unanimous vote from all 27 member states to be passed.

“If both options proposed by the Commission are blocked, a ‘coalition of the willing’ could be the option of last resort,” the European Parliament said Wednesday.

Asked ahead of Thursday’s meetings if he was acting in Europe or Russia’s interests by working to block the use of Russian assets by the EU, Orbán said he was “just working for peace.”

“I think what we have to do [is] to make some steps to peace, not to war,” he said.

Russian and Ukrainian forces are entering their fourth winter of fighting as peace talks drag on. Negotiations are expected to continue into this coming weekend, possibly in Miami, following weeks of talks between delegations from the U.S., Russia, Ukraine and Europe.  

Despite Orbán’s take on the subject, Kaja Kallas, EU high representative for foreign affairs and security policy, told reporters in Brussels on Thursday that the bloc was pushing for peace alongside Ukraine, but that it was “one sided.”

“We haven’t seen any willingness from the Russian side to move or seriously talk about peace,” she said. “We need to put pressure on Russia, so that they go from pretending to negotiate to actually coming to the table to negotiate.”

Unlike Orbán, she struck an optimistic tone on pushing the proposals around the reparations loan and frozen assets through.

“The proposals we are working on are addressing Belgium’s concerns,” she said. “The issues that Belgium has raised have been addressed, so I hope we get this over the finishing line. Putin is banking on us to fail, so we shouldn’t give him that.”

A spokesperson for the Kremlin did not respond to CNBC’s request for comment.