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The European Commission is willing to bow to some of Hungary’s demands in order to secure a €50bn support package for Ukraine, according to senior officials.
Brussels has been working to find a solution to the Hungarian blockade since Prime Minister Viktor Orbán vetoed the EU package in December. The issue is all the more pressing given that a stalemate in the US Congress means Washington’s support for Kyiv is also uncertain, at a time when Russia has been ramping up its aerial attacks on Ukrainian cities.
As a way to convince Orbán to drop his veto, the commission is open to giving Hungary’s premier an opportunity in 2025 to stop the funding deal midway through, three officials briefed on the matter told the Financial Times.
Under the potential concession, the EU would include a review of the four-year support package next year, when it will evaluate whether Ukraine still needs the cash and has met the requirements to receive EU aid. This would give Orbán the chance to veto its continuation.
The commission is also open to annual audits of the aid and the introduction of an “emergency brake” clause, whereby any country could put serious concerns about Ukraine payments up for discussion at a summit of EU leaders. It would not, however, give Hungary an additional opportunity to veto funding.
Asked if this would be sufficient for Orbán to drop his veto, a senior Hungarian official said: “Still uncertain, but I say most probably yes.”
The Hungarians “are in a negotiating mood”, said a person briefed on the discussions. Brussels unlocked €10bn of EU funding for Hungary in December that was previously frozen due to rule of law concerns, a few weeks after it approved a separate €900mn payout to the country.
The idea of a review clause was first proposed by Hungary in October, but other EU leaders resisted such a move because it would fail to give Ukraine certainty over its financial support.
The original aim of the package was to give Kyiv a predictable flow of support over four years, with a package including €17bn in grants and €33bn in loans. Some countries have said the midterm review would give Orbán the chance to veto aid further down the line.
But bowing to these concessions in order to unlock EU budget funding for Ukraine is still seen as preferable to alternative arrangements, which would require creating complex structures to bypass Hungary.
These include options to prolong the existing 2023 loan scheme for up to a year, raise common debt backed by national guarantees, or create a special financial vehicle to disburse grants.
All these options can be pursued without Hungary, but they are more costly and would take longer to set up and disburse funds to Ukraine. Kyiv is pushing for EU funds to reach Ukraine in March at the very latest, to avoid having to resort to printing money to finance costs.
“It will get tough at some point in March,” a Ukrainian government official said.
Some EU countries including Italy have also resisted the idea of narrowly agreeing additional EU funding for Ukraine while separating it from other proposals to top up the common budget in other areas.
The rest of the budget increase, which the commission linked to funding for Kyiv, includes €4bn for migration management and investments in defence.
With elections for the European parliament taking place in June, some capitals want to show that the EU is also increasing spending on domestic priorities as well as supporting Ukraine.
