During a European Union (EU) Economics and Finance Ministers’ (EcoFin) meeting in Brussels on Tuesday, Hungary obstructed the bloc’s nearly $19 billion in financial aid to Ukraine. In retaliation, Brussels decided to postpone its decision to approve Budapest’s $6 billion post-pandemic Recovery and Resilience Plan (RRP) and the $7.8 billion cohesion funds.
Calling it “fake news,” Hungarian Prime Minister (PM) Viktor Orbán said, “Hungary is ready to give financial assistance to Ukraine, on a bilateral basis.” However, he maintained that “huge piles” of common EU debt is not the solution. “If we continue to go down the road towards a debt community, we will not be able to turn back,” he asserted.
2/3 We do want to convince #EU member states however that common EU debt is not the solution. If we continue to go down the road towards a debt community, we will not be able to turn back.
— Orbán Viktor (@PM_ViktorOrban) December 6, 2022
The EU plans to provide over $1.5 billion to Ukraine per month next year to help manage Kyiv’s budget deficit, which needs about $40 billion to ensure the functioning of its public services.
In this regard, Hungarian Finance Minister Mihály Varga confirmed, “Hungary is not in favour of the amendment of the financial regulation,” adding, “We have had bad experiences with joint borrowing, for example, this type of EU decision during the coronavirus pandemic did not help Hungary to access the funds.”
Let’s be precise on Hungary and Ukraine. Orban blocked the funding method EU proposed for raising money for Ukraine. For now. He may lift that veto if he gets the EU money. We’ll find out. But he can’t stop EU delivering EUR18B and says he doesn’t want to.
— laurence norman (@laurnorman) December 6, 2022
Hungarian Minister of Defense Kristóf Szalay-Bobrovniczky told German newspaper Berliner Morgenpost that Budapest had taken in one million Ukrainians. He also accused Brussels’ decision to freeze funds as “a merely political tool,” highlighting that the government has declared zero tolerance against corruption. “We have made a lot of progress, but there is more work to be done, we will make additional efforts to fight corruption,” Szalay-Bobrovniczky said, adding that he is sure that “in the end, the EU funds will flow.”
Meanwhile, European Commission Executive Vice President and Commissioner for Trade Valdis Dombrovskis said Ukraine “desperately needs our support and we just cannot allow one member state to delay and derail this EU financial support.” “There are millions of people without water, heat or electricity. So we really need to move forward,” he affirmed, adding, “We must deliver it, one way or another, and we will do it.”
We regret no #ECOFIN decision today on proposed @EU_Commission €18 bln funding for Ukraine in 2023.
— Valdis Dombrovskis (@VDombrovskis) December 6, 2022
I have seen with my own eyes how desperate the situation is. We must make a first payment next month so #Ukraine can survive winter. There’s no alternative - we’ll find a way 🇺🇦 pic.twitter.com/3czYzHbaVx
Similarly, German Finance Minister Christian Lindner expressed regret at being unable to decide on financial aid for Ukraine. “That we could not express our solidarity through our financial help is the responsibility of Hungary,” he stated, emphasising, “This is a war where our European values and interests are also being defended.”
In a similar vein, Dutch Finance Minister Sigrid Kaag noted, “It would undermine the credibility of the European Union if we cannot deliver. So it is essential.”
The bloc requires unanimous approval to provide the nearly $19 billion fund to Ukraine. Nevertheless, European Commissioner for Budget Johannes Hahn said the bloc will look at how to “provide the necessary solution to Ukraine already as of January,” including a different mechanism to provide funds. However, it would require every country’s parliament to approve and ratify the money, which would take up more time.
Hungary has just blocked EU's aid to Ukraine again. They clearly show whose side they're on. And we also have to show whose side we're on.
— Inna Sovsun (@InnaSovsun) December 6, 2022
Take away the right of veto from Hungary! TEU Article 7 must be applied!
And for the future: unanimity must come to end! The EU needs reform!
“We were not able to adopt the package as a whole but we will not be discouraged. […] Whether it is Plan A or Plan B, at whatever price, we have to do that,” Czech Finance Minister Zbyněk Stanjura noted, and asked the European Council to find “a solution supported by 26 member states” to overcome Hungary’s veto.
The Czech Republic, which holds the rotating EU presidency currently, may convene another EcoFin meeting next week, likely on 12 December, to decide on a possible solution.
#Orban really did it: #Hungary just blocked the EU's #Ukraine aid package of 18 bn euros in order to blackmail the rest of the #EU to free funds blocked because of #RuleofLaw issues. EU now looking for solution among 26 member states to pay funds to Ukraine in January.
— Markus Becker (@MarkusBecker) December 6, 2022
In retaliation to Budapest’s stance, Brussels decided to postpone voting on the European Commission’s proposal to freeze $7.8 billion under its cohesion policy for failing to “adequately implement central aspects” of the 17 reforms related to rule of law it agreed to fulfil by the 19 November deadline. It also delayed taking a call on the $6 billion COVID-19 recovery funds.
“Hungary considers it a dangerous precedent that the payment of EU funds to Hungary is linked to other, completely unrelated issues,” Hungarian government spokesman Zoltán Kovács stressed, adding that Budapest had met all conditions to access EU money. “We refuse to make EU funds conditional on changing our position,” he affirmed.
But Orban needs member states’ approval of its €5.8bn recovery fund by end-year or risks losing 70% of the money. Plus markets are looking very closely. So even if he plays the victim role (EC’s disproportionate decision on €7.5bn etc…) he cannot overplay his hand.
— Jorge Valero (@europressos) December 6, 2022
Some members of the bloc believe that Hungary is using its veto as leverage in order to get the EU to disburse the funds. In this respect, German Member of European Parliament (MEP) and Green Party member Daniel Freund asserted, “Viktor Orbán is abusing the veto like no one before him. […] He even takes funds for Ukrainian hospitals hostage for this.”
In fact, Hungary has also vetoed the 15% tax on multinational corporations proposed by the Organisation for Economic Co-operation and Development (OECD), calling it a danger to jobs in the bloc.
Make or break moment ⚠️ Orbán blackmailing more and more files
— Guy Verhofstadt (@guyverhofstadt) December 6, 2022
Call his bluff: instead of giving in double the money blocked w every threat !
1 veto = €5.8 billion
2 vetoes = €11,6 billion
3 vetoes = €23,2 billion
🛑 EU sovereignty is not for sale !https://t.co/rDPn4iFzjo
United States (US) Ambassador to Hungary David Pressman said he would “consult with Hungarian officials and senior European Union and NATO counterparts on a range of pressing issues of shared concern.”
“Maintaining unity of purpose at this critical moment is of paramount importance,” he stressed.