EU Ready to Play Hardball With Hungary Over Blocked Ukraine Aid

Michael Nienaber and Zoltan Simon
·2 min read
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(Bloomberg) -- European Union leaders are ready to play hardball with Hungary if Prime Minister Viktor Orban should continue to block a €50 billion ($54.5 billion) support package for Ukraine at an extraordinary summit next week, people familiar with the preparations said.

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Hungary on Monday opposed a bid within the bloc to create a new fund to ensure a more reliable way of delivering crucial military aid to Ukraine. The move comes after Orban torpedoed a joint European decision on the four-year financial package for Ukraine in mid-December.

Member states are poised to pass the Ukraine package at the Brussels summit on Feb. 1 regardless of Hungary’s backing, said the people, speaking on condition of anonymity because the discussions are private.

If Orban continues to block the support package, there will be a decision of the remaining EU 26 to pass it and preparations for such a scenario are well advanced, the officials added.

A potential back-up option that has been floated is having the remaining member states funnel money to Kyiv outside of the EU budget process. The proposal would involve national guarantees to raise funding in the markets if Hungary continued to bloc a joint decision.

Broader Clash

Should Orban decide to go down this road, an escalation is possible — including the EU launching the next stage of penalty measures against Budapest that could lead to the withdrawal of its voting rights as a member state, the officials said.

Such a scenario could lead to a broader clash: Slovakian nationalist Prime Minister Robert Fico last week already warned other leaders that he would shield Hungary from any potential moves to strip Orban’s government from exercising its rights in the bloc.

Following a meeting of the EU’s chief diplomats in Brussels on Monday, Hungarian Foreign Minister Peter Szijjarto said in a Facebook video post that his country doesn’t support revamping the current funding mechanism — known as the European Peace Facility, or EPF — where member states are reimbursed for weapons they send Ukraine.

His comments are in line with Hungary’s continued obstructionism on Ukraine, which is trying to maintain western support to fund its military campaign against Russia’s invasion.

The size of the facility has been expanded several times but decisions to allocate and disburse funds require unanimous backing from member states.

Hungary, led by the most Russia-friendly government in the EU, has consistently rejected weapons deliveries to its eastern neighbor. It’s currently blocking the disbursement of the latest, €500 million tranche from the EPF.

Szijjarto said the issue will be discussed when he meets his Ukrainian counterpart Dmytro Kuleba on Jan. 29. Budapest will consider lifting its blockage if Ukraine offers “guarantees” that Hungarian companies won’t be added to its list of international war sponsors.

--With assistance from Katharina Rosskopf.

(Updates with new EU strategy from the first paragraph.)

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