Hungary has vetoed a €90 billion loan from the European Union intended to support Ukraine’s financial stability amid ongoing conflict. This decision, made during a meeting of EU ambassadors, effectively halts the funding process, which requires unanimous approval from all 27 member states.
According to reports, the Hungarian representative opposed the issuance of joint debt backed by the EU budget to finance Ukraine. The loan is crucial for Ukraine, which faces a potential budget deficit as early as April. Additionally, the disbursement of these funds is linked to ongoing negotiations with the International Monetary Fund for an €8 billion program.
The political backdrop in Hungary is significant, as the country approaches elections. Prime Minister Viktor Orbán, whose party is currently trailing in polls behind the opposition force, has intensified anti-Ukrainian rhetoric. He has accused Ukraine of halting the operation of the Druzhba oil pipeline, despite the fact that the pipeline has been damaged by Russian attacks.
State media in Hungary have echoed sentiments that financial support for Ukraine merely prolongs the conflict at the expense of Hungarian taxpayers. This narrative has contributed to the political climate surrounding the veto.
If the decision remains unchanged, experts warn that Ukraine could face a financial collapse as early as the second quarter of the year. The loan was seen as an alternative source of funding after EU countries failed to reach an agreement on utilizing frozen Russian assets to meet Ukraine’s financial needs.
Hungary's veto of a €90 billion EU loan to Ukraine halts critical financial support, raising concerns about Ukraine's fiscal stability amid ongoing conflict. The decision reflects internal political dynamics in Hungary as elections approach.
Source: Financial Times