Nearly two years after Russia’s invasion of Ukraine, the conflict persists, leaving Ukraine in dire need of financial assistance to stabilize its economy. However, political disagreements within the European Union (EU) and the United States are impeding the crucial delivery of financial support.
Hungarian Prime Minister Viktor Orban remains firmly opposed to a proposed €50 billion ($54 billion) support package allocated for Ukraine, causing frustration and discord among other EU leaders. Here is a comprehensive look at the current situation:
Worries about the erosion of democracy within Orban’s government have prompted the EU to suspend Hungary’s access to substantial joint funds. Hungary, grappling with its own economic challenges, has retaliated by vetoing EU political decisions, especially those related to Ukraine and the Middle East.
Orban’s block on the aid package in December has led to a second gathering of the 27 EU heads of state and governments scheduled for Thursday. While the other 26 leaders are eager to release the funds for Ukraine, Orban remains unwavering, stirring increasing dissatisfaction among his peers.
In a parallel development, U.S lawmakers have encountered difficulties in approving a multi-billion-dollar aid package intended to assist Ukraine in acquiring weaponry, adding further scrutiny to the EU meeting this week.
Cumulatively, EU support for Ukraine since the beginning of Russia’s aggression amounts to approximately €85 billion ($92 billion), according to EU statistics. This includes over €40 billion ($43 billion) allocated to strengthen Ukraine’s economy, roughly €27 billion ($29.2 billion) for military support measures, and more than €17 billion ($18.4 billion) to help EU member states assist Ukrainian war refugees.
Decisions regarding a review of the EU’s long-term budget, which incorporates the €50 billion ($54.1 billion) aid for the Kyiv government, require unanimous approval from all 27 member nations.
Hungarian officials have proposed an alternative approach: instead of endorsing the entire aid package, leaders should agree to disburse it in annual installments with a review mechanism. However, this idea has faced resistance, as it could potentially empower Orban to block the funding at a later stage.
Anticipating a prolonged deadlock, EU officials have explored potential alternatives, such as committing to deliver aid through voluntary contributions from 26 member countries, separate from the EU budget.
If an agreement remains elusive, EU leaders still have the option of extending the €18 billion in aid provided to Ukraine in 2023 for an additional year.
Orban is known for his political brinksmanship and has a history of strategic retreats, but his current intentions remain unclear to many of his counterparts.
In recent months, EU diplomats have hinted at the possibility of invoking a mechanism that could potentially result in Hungary’s suspension from EU voting rights. Under Article 7.2 of the Treaty on European Union, in cases of a “serious and persistent breach” of the bloc’s values, this procedure can be initiated either by one-third of member states or by the European Commission, the EU’s executive arm.
Meanwhile, the Commission retains the authority to withhold approximately €20 billion ($21.7 billion) allocated for Hungary from cohesion funds and post-pandemic aid, as a means to encourage cooperation from Budapest.
