EU pressures Viktor Orbán to lift Hungarian veto on funds for Ukraine

The European Union is running out of patience with Hungary. The “level of frustration” of the member states with the Hungarian Prime Minister Viktor Orbán and his blocking of the financial lifeline to keep Ukraine’s defense against the Russian invasion afloat has risen sharply. Several diplomatic sources have been quite blunt on the matter. In a key week for Kyiv, several leaders are launching what could be a final warning to Hungary to give the green light to the approval of €50 billion ($54 billion) over four years for Ukraine within the EU budget at a European summit convened to address the issue on Thursday. Brussels continues to pressurize and negotiate while Budapest, which showed signs Monday that — with conditions and concessions — it could accept an agreement, has criticized EU “blackmail,” an accusation that is mutual.

Several member states are already talking about applying extraordinary measures on Budapest if it maintains its blockade on funds for Ukraine and a policy of coercion that has already become its hallmark. Orbán has insisted on linking his decision to the release of European funds that Brussels has withheld for his violations of the rule of law: in December, on the eve of the European summit at which key issues for Ukraine were discussed, the European Commission unfroze €10.2 billion for Hungary, but withheld €21 billion.

As the tone against Hungary has hardened in the corridors of the negotiations, there has been talk of keeping that €21 billion withheld from Budapest. Or of skipping Hungary’s turn to chair the EU Council from July until December and going straight to Poland, the next member state on the list. But that is a difficult and purely symbolic process. In addition, some member states believe it is time to table in earnest the discussion of restarting proceedings against Hungary for violations of the rule of law, which could result in the EU’s most fractious and Russia-friendly partner losing its voting rights. But such a decision requires unanimity and that too is complicated.

The time has not yet arrived to push the red button, a senior EU source says. “For several member states, support for Ukraine is an existential and strategic question, and one of survival. Now there are more capitals that want to be tougher on Orbán, but there is still room for maneuver.” For the time being, if there is no agreement, it will be made clear that Hungary is a completely isolated country: 26 partners against one. And that would have not only political but also economic effects, for example on the country’s credibility, says a European diplomat.

Meanwhile, an internal European Council analysis paper on the Hungarian economy, describing its extremely high dependence on EU funds, the serious problems it would face if it cannot access them, and pointing to the option of leaders talking publicly about the possibility of withholding funds if there is no agreement on Ukraine on Thursday - something that would alienate investors - has added fuel to the fire of an already festering debate.

Budapest has branded the note, advanced by the Financial Times and to which EL PAÍS has had access, as evidence that the EU wants to sabotage it. European Council sources deny that the note, just over a page long, outlines a plan of action towards Hungary. " The document, drafted by #Brussels bureaucrats only confirms what the Hungarian Government has been saying for a long time: access to EU funds is used for political blackmailing by Brussels,” Hungary’s Minister of European Affairs János Bóka said on social networks.

“Some member states are finally waking up,” says Daniel Freund, Green MEP and one of the most vocal critics of Hungary’s violations of the rule of law. “The withdrawal of voting rights and the freezing of all funds are the EU’s sharpest swords,” notes Freund, who believes the signals from Brussels on Hungarian voting blackmail are “clear,” but also argues that they should not be used to break the veto on Ukraine, but for what they are designed for: to address Hungary’s breaches.

On Monday, Hungarian Foreign Minister Péter Szijjártó traveled to Kyiv for the first time since the start of the war with Russia. As announced by his Ukrainian counterpart, Dmytro Kuleba, the two agreed to set up a bilateral commission to resolve, within 10 days, the disagreements of both sides on the issue of Ukraine’s Hungarian minority. Kyiv hopes that the meeting in the western Ukrainian city of Uzhhorod will help break Hungarian resistance to approving the European aid package.

Emergency brake on aid to Kyiv

Hungary did not agree in December — when it did give the green light for the EU to open accession talks with Ukraine — to a broader revision of the multiannual financial framework to create a special €50 billion package for Ukraine, in addition to other funds for immigration and competition. Orbán, who is close to Russian President Vladimir Putin, has refused to allow the financial lifeline for Kyiv to be tapped from the EU budget. To do so outside that framework would hinder and slow down the process, according to the other 26 partners.

As a condition for accepting the formula, Budapest wants a year-by-year review of the funds being sent — or some kind of emergency brake — and the addition of more EU funds for surveillance of the bloc’s external borders, as well as some kind of clause that would allow member states more time to spend the funds allocated to the Covid recovery fund (the current deadline is the end of 2026). Such a measure would benefit Budapest if it manages to meet the requirements to receive it. The negotiation is now focused on that emergency brake, which could satisfy Budapest without handing it the ability to veto aid to Ukraine year-by-year.

There are no longer any pending political gestures on the table, such as the opening of accession negotiations with Ukraine. It is now a matter of keeping Kyiv afloat in its war against Russia. The €50 billion allocation over four years would mean the Ukrainian state has a chance to continue to function and not collapse, thus handing Putin victory. And that, explains another diplomatic source, is the point that explains why now the level of annoyance with Hungary has risen to such levels. Without European funds, Ukraine could have to cut the salaries of two million civil servants, according to an internal document published by EL PAÍS in December.

European leaders are reluctant to put a plan B on the table to send funds to Ukraine. There is the option of doing it without Hungary, EU sources acknowledge, but several member states would need the approval of their parliaments and that would slow the process down and complicate it further.

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