By invoking Article 122 of the
E.U.’s basic law, a clause that had been used most significantly during the Coronavirus
pandemic and in the 2022 energy crisis, the E.U. in December, 2025 finally
circumvented the twice-threatened veto by the state of Hungary and indefinitely
froze €210 billion of assets of the Russian Central Bank that had been within
the E.U.’s territory since Russia began its unprovoked invasion of Ukraine
nearly four years earlier. I contend that the European Court of Justice, the E.U.’s
supreme court, could apply a rational basis in a judicial review of the triggering
of the emergency-conditioned article, especially because the Commission
invoked the article in order to obviate Hungary’s threatened veto. Because every
E.U. state except for Belgium and Hungary were for freezing the assets until Russia
such time as Russia ends its militaristic aggression and compensates Ukraine
financially for damages the Belgian and Hungarian state governments were
violating the informal norm of consensus in the European Council and the
Council of Ministers. Like the U.S. Senate, the European Council, which also
represents the states, is like a club of sorts. The problem facing the
Commission is that violating a norm is not a legal basis for obviating a
threatened state-veto by invoking an emergency clause of the E.U.’s basic law, especially
if no emergency actually exists after nearly four years of the invasion. Even
though I am personally in favor of the E.U. obviating Hungary’s serial obstructionism
that may be, at least in part, retaliation against President Von der Leyen’s
Commission for having penalized the Hungarian government financially for having
violated E.U. law, legal reasoning should not succumb to the gravity of the “black
hole” of personal opinion. There may be nothing
so much like a god as a general on a battlefield, with power over life and
death, but neither the European Commission nor myself is a general. In short,
the Commission’s legal justification in invoking Article 122 is tenuous at
best, even though countering Hungary’s Viktor Orbán’s abuse of his state’s veto-power
in the European Council and the Council of Ministers was needed for the E.U. to
be able to function within its enumerated competencies (i.e., powers).
The reason for indefinitely
holding the Russian central bank’s financial assets that have been in the E.U.
since the beginning of the invasion is so the E.U. could use those assets as a
basis for making loans to Ukraine to bolster the sovereign state’s military
position without the E.U. having to issue its own debt. “We are sending a
strong signal to Russia that as long as this brutal war of aggression
continues, Russia’s costs will continue to rise,” President Von der Leyen said.[1]
The objective was to “make sure that our brave neighbour beomes even stronger
on the battlefield and at the negotiating table.”[2]
According to Euronews, the E.U. was able to shore up “its mightiest leverage,”
push back against “external interference” and insulate “the money from the
Kremlin’s war machine—all at once.”[3]
The external interference was not really external, as this refers to the financially
self-interested objection of the state of Belgium and the pro-Russian objection
of Viktor Orbán of Hungary. Obviating self-interested states whose governors
are willing to go against the other 25 states in the Council is laudable even
though this objective can be traced back to the E.U.’s federal system, which must
be taken as a given to the ECJ. To be sure, finding a way to do it by invoking
an article of the E.U.’s basic law was not an easy task for the Commission.
“At first, the Commission
suggested activating Article 31.2 . . . to switch the [6 months] renewal of
sanctions from unanimity to qualified majority.”[4]
The sanctions include holding the Russian financial assets. The article is
vaguely, and thus problematically from the standpoint of constitutional
language, based on “strategic interests and objectives.”[5]
This wording could potentially enable the E.U., by qualified majority voting,
to encroach excessively on governmental sovereignty retained by the states.
That any state government could invoke “vital and stated reasons” of “policy”—again
too vague—to veto any such bills that are in the strategic interests and objectives
of the E.U. as a whole meant that the governor of Hungary could easily invoke its
ties to Russia as vital reasons to veto the proposal to freeze the Russian
assets indefinitely.
So, the Commission turned to
Article 122, which applies qualified-majority voting rather than unanimity in
the European Council (and the Council of Ministers) “in a spirit of solidarity .
. . appropriate to the economic situation.”[6]
Here too, the constitutional language is too vague. Hungary’s Orbán had been
fragrantly violating the spirit of solidarity for years, and “economic
situation” is so vague that the article could potentially be used to expunge
unanimity from the federal level.
Furthermore, that Article 122 “bypasses
the European Parliament” is also problematic because that democratically
elected legislative chamber, the “lower house,” could otherwise act as a
check on the Commission and the councils exploiting the article to rid the E.U.
of the need for unanimity in the councils. Also, requiring a qualified majority
vote in the Parliament would not in itself give the state governments the power
to use their respective vetoes in the councils. One of the principal benefits
of federalism, as distinct from confederalism, is the mechanism of
state-federal checks-and-balances. Considering the American history of consolidation
at the expense of the governmental sovereignty retained by the states, the
vague constitutional language of Article 122 could be exploited. This is not to
say that retaining the state-veto mechanism in the councils is at all healthy
for the European federal system. Other means, such as requiring a qualified
majority in the European Parliament, are consistent with federalism.
Such a check would be of value
in terms of the indefinite freezing of Russian financial assets because the
Commission interpreted “appropriate to the economic situation” to be invokable
due to a “serious economic impact,” including in “supply disruptions, higher
uncertainty, increased risk premia, lower investment and consumer spending,” as
well as “non-economic drone incursions, sabotage and disinformation.”[7]
Again, higher uncertainty and lower investment and consumer spending provide
the Commission with virtually a wide-open door to obviate unanimity in the
councils.
Earlier in 2025, the
Commission had invoked Article 122 “to set up SAFE which allows member states
to directly approve a Commission proposal [by qualified majority rather than
unanimously] ‘if severe difficulties arise in the supply of certain produces’
or if a member state is ‘seriously threatened with severe difficulties caused
by natural disasters or exceptional occurrences beyond its control’.”[8]
Tellingly, it was the Parliament rather than a state government that objected,
which is a telling indication that the Parliament should not have been excluded
from the procedure to be followed according to the article.
With regard to the “emergency”
said by the Commission to justify invoking Article 122 to indefinitely freeze the
Russian financial assets in the E.U., the governor of Belgium, Bart De Wever, “questioned
the existence of any EU-wide emergency,” as Russia’s invasion was nearing its
fourth anniversary.[9] For
instance, only 10% of energy in the E.U. was by that time from Russia.[10]
Even though the E.U.’s evident economic woes, coupled with the vague wording of
Article 122 and its limited jurisprudence, gave the Commission enough leeway to
forge ahead,” using even “the economic situation” to invoke the article is
highly problematic, especially as the obvious intent was to undercut the
state-veto mechanism, which under the E.U.’s basic law at the time, was valid
even though Hungary and Belgium were, for self-interested political and
financial reasons, respectively, abusing the mechanism given the norm of
consensus in the councils.
The upshot is that the E.U.
could do better in tightening its constitutional, or basic-law, language, enlarging
the coverage of the Parliament (especially as a check on the Commission). In
the meantime, the ECJ should take a look at the Commission’s invoking of
Article 122, especially on the Commission’s interpretation that “economic
situation” really means “economic emergency,” which actually makes sense so to
avoid the article from being invoked for virtually anything, and that an
emergency was still the case almost four years after the commencement of the
Russian invasion, which does not seem to be a valid claim. In the background is
the consolidation by the U.S. of power at the expense of that of the member-states,
and the related switch from the state governments appointing U.S. senators to
them being elected by the citizens of the states. Citizens of a state may not
vote so to protect the remaining governmental sovereignty held by their state,
whereas senators appointed by state governors and/or legislatures would naturally
have an incentive to keep an eye on the federal division of governmental
sovereignty. Nevertheless, the veto power of the E.U.’s state governments,
especially as there were 27 at the time of the invocation of Article 122 to
freeze Russian assets, is arguably excessive and thus harmful to the E.U. level
as well as the federal system itself, which should allow for federal oversight “with
teeth” on abuses by state governments, especially in infringing on democracy
and liberty.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.
6. Ibid.
7. Ibid.
8. Ibid.
9. Ibid.
10. Ibid.
