EU Initiates Accession Talks with Ukraine for Membership, Yet Hungarian PM Blocks Financial Aid to Kyiv
At the EU summit on December 14 of last year, European leaders reached an agreement to initiate accession negotiations with Ukraine. However, Hungarian Prime Minister Viktor Orban impeded the provision of 50 billion EUR in financial aid to Kyiv. Should Orban choose to exercise his veto once again, the EU has a contingency plan prepared to offer financial assistance to Kyiv.
Negotiations regarding Ukraine’s EU membership have hit an impasse, as all 26 leaders, excluding Orban, endorsed the initiation of talks. The German Chancellor, Olaf Scholz, discreetly suggested to the Hungarian Prime Minister to take a „coffee break“, allowing the main leaders to proceed with the vote without his presence. To make this decision, one-time support is required, a condition unattainable in the presence of Orban. This strategic move was collectively presented and played a pivotal role in approving Ukraine’s candidacy for EU membership.
The Hungarian prime minister justified his abstention from the vote by stating that he had spent enough time dissuading other leaders from engaging in negotiations. He added that those present were eager to commence accession talks with Ukraine, prompting him to step back and delegate responsibility to them.
Nevertheless, the process of joining the EU is a complex procedure replete with technical details. It will take years before Ukraine is prepared to become a member country. The Hungarian Prime Minister still has ample means to obstruct this process.
Orban believes that Ukraine’s EU membership would have a negative impact on all member states, particularly Hungary. He foresees adverse consequences for Hungarian farmers, fearing that funds from the Cohesion Fund, which addresses economic disparities among EU members, might be redirected to Ukraine. Orban views Ukraine not as a prospective EU member but rather as a buffer zone between the EU and Russia.
Nevertheless, Orban did not accede to all the requests made by European leaders during the summit. Negotiations concluded when Orban exercised his veto, obstructing a more concrete and pressing decision. Specifically, he vetoed financial assistance for Kyiv totalling 50 billion EUR for the years 2024-2027, an allocation that the rest of the member states aim to incorporate into the Union’s multi-year budget.
The Hungarian prime minister asserts that EU funding for Ukraine should not be derived from the EU budget, emphasising the necessity to establish a “reasonable” timetable for any financial support to Kyiv. Orban stated at a press conference, “I am convinced that giving Ukraine 50 billion EUR from the EU budget for five years… is a bad decision.”
Orban utilised his veto power to secure concessions for Budapest, refusing further financial assistance for Kyiv unless Budapest received funds from EU resources. A substantial portion of Hungary’s financial resources had been suspended by the European bloc due to violations of rule-of-law principles, human rights, and corruption in the country.
The political deadlock regarding additional financing for Ukraine in Washington, coupled with the setback of the Ukrainian counter-offensive, is also advantageous for Orban. According to him, the likelihood of Ukraine winning the war is low, and thus, allies should advocate for negotiations and an immediate ceasefire. He staunchly opposes providing military aid to Ukraine, believing that supplying arms to Kyiv prolongs the ongoing suffering.
EU officials have devised a backup plan to offer financial support to Kyiv in case Orban repeats his veto at the upcoming EU summit on February 1. Member states can provide Ukraine with bilateral financial aid in 2024 outside the EU budget. Participating member states can furnish guarantees to the European budget. These guarantees would enable the European Commission to secure up to 20 billion EUR for Kyiv on the capital markets in 2024. Though limited to loans, the plan assures Kyiv of funds by March 2024, minimising the risk of resorting to inflation-inducing monetary financing.
At the EU summit on February 1, 2024, at the end, Orban budged and let the adoption of the EU’s 50 billion EUR assistance to Ukraine pass without obstructions.