EU extends olive branch to Viktor Orbán to unlock Ukraine aid

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Brussels has made a last-minute offer to Hungary’s prime minister in a bid to secure his support for the bloc’s €50bn financial aid to Ukraine, amid frenzied diplomatic efforts to reach a deal at a summit of EU leaders on Thursday.

In December, Viktor Orbán vetoed the aid package, throwing into question EU support for Kyiv at a time when US military assistance is also stalled in Congress. Since then, pressure has been mounting on the Hungarian leader to drop his resistance to the funding.

According to the draft seen by the Financial Times, the new proposal involves holding annual reviews of the next four years’ worth of aid to Ukraine. However, contrary to Orbán’s demands, no single country would be able to veto the continued flow of aid following each review.

Instead, EU leaders “will hold a debate each year on the implementation of the [Ukraine] Facility with a view to providing guidance on the EU approach towards the situation stemming from Russia’s war of aggression against Ukraine”.

The proposal was agreed at a meeting of EU member-state ambassadors a day before the leaders gather in Brussels to agree on the aid and a broader top-up of the bloc’s common budget.

On Sunday the FT reported that Brussels planned to strong-arm Orbán into agreeing by exploiting his country’s economic vulnerabilities. The report prompted fierce backlash from Budapest and frantic diplomacy from other EU officials.

Failure to unanimously back the €50bn, four-year package would force the rest of the bloc to seek out more costly and time-consuming alternatives to secure the continued flow of EU aid to Ukraine.

Hungary’s representative at an EU ambassador meeting on Wednesday responded to the latest proposal by reiterating that Budapest demanded an annual veto on the Ukraine funding, according to a person briefed on the discussion.

Other EU ambassadors said they would not accept such a veto but were open to the proposed compromise, and were focused on finding a deal acceptable to all 27 countries.

“The level of nervousness is quite high,” said one EU diplomat involved in the negotiations with Budapest. “We will see in the [summit] room what flexibility [Orbán] has.”

“To date, we do not have this agreement,” said a second EU diplomat.

Asked on Wednesday about the possibility of reaching a deal on local television station ATV, Balázs Orbán, the Hungarian prime minister’s political director, said: “We are negotiating.”

Since the FT’s report on Sunday, Orbán has doubled down on his resistance to pressure from the EU. “We made a compromise proposal. In return, we were blackmailed by Brussels . . . We will defend our interests. Hungary cannot be blackmailed!” the Hungarian leader wrote on X on Tuesday.

One nuclear option for the EU would be to try to strip Orbán of his voting rights, which would require the agreement of all other countries in the bloc. However, other EU capitals are very cautious about triggering such a process, though officials say their level of frustration is high.

“If we enter a scenario where we have a member state blackmailing, it was OK once, twice, I’m not sure it will fly” in the long term, said a senior EU official.

Should Orbán refuse to drop his veto on Thursday, officials say the remaining 26 leaders will work on alternative solutions to fund Kyiv.

“It is clear that you have a commitment from 26 [member states] to deliver aid to Ukraine,” said the EU official.

The most immediate option would be to extend an existing loans scheme for 2024. This can be done by a qualified majority, allowing the unanimity requirement to be bypassed.

The 26 countries would have to set up two separate intergovernmental schemes to allow the bloc to transfer grants and loans to Ukraine for the rest of the period. This solution is costly and cumbersome, however, as in many countries it would require parliamentary approval.

A failure to adopt Ukraine aid unanimously would also throw into doubt whether an additional €4bn for migration and defence, part of the broader EU budget update, would be adopted by EU27 leaders.

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