EU funds 12 December 2023, 9:21am

EU explores alternative solutions to overturn Hungarian veto

Portfolio

European Union diplomats are working on a series of technical proposals to bypass the Hungarian government, which has threatened to veto all Ukraine-related issues. One plan is to provide emergency funding for Ukraine outside the common EU budget. At Monday's foreign ministers' meeting, they actively tried to persuade Hungarian MoFA Péter Szijjártó not to block the start of accession talks with Ukraine and the disbursement of €50 billion in financial aid for the war-torn country, but reportedly failed to reach a deal.

Prime Minister Viktor Orbán has repeatedly stated in recent weeks that Hungary will veto any decision on Ukraine at the EU summit starting on Thursday, including a EUR 50 bn financial aid from the shared EU budget and the opening of accession negotiations.

Council President Charles Michel paid a visit to Orbán to at the end of November, trying to convince him to change his mind. Last week, French President Emmanuel Macron tried to persuade the PM privately in Paris. Over the weekend, Ukrainian President Volodymyr Zelensky himself tried to influence Orbán, while on Monday EU foreign ministers held talks to this end with Péter Szijjártó.

EU officials urgently seek solutions to circumvent Hungary's possible veto. With time running out ahead of the summit, diplomats have initiated closed-door talks on the feasibility and technical details of an alternative financial package among the remaining 26 EU member states.

This emergency funding plan would provide financial support to Kyiv for at least one year. The talks are being kept confidential so as not to undermine efforts to override Hungary's veto, the Financial Times reported.

While Hungary is rejecting supporting Ukraine from the shared EU budget, Orbán has said he has no objection to other EU countries providing aid. An off-budget instrument would take more time and cost more money in interest and other costs, EU officials told the paper. One added:

Nobody wants to do this if we don’t have to . . . But it would be reckless not to have a plan B.

Orbán's EU minister János Bóka said that a decision on Ukraine's membership negotiations should wait until after the European Parliament elections in June 2024. In response, Ukrainian Deputy Prime Minister Olha Stefanishyna underlined the consequences of not deciding on the €50 billion aid, saying that an interim solution would leave Ukraine on “the edge of survival with zero [financial] predictability for the whole year”.

Although it has been repeatedly linked to the Ukrainian case in the Western media that the European Commission may decide on Tuesday or Wednesday to partially close the procedure on horizontal enabling conditions, thus allowing Hungary to receive more than €10 billion in cohesion funds, Brussels categorically denies that this is an attempt to bribe the Orbán government.

As we have reported several times, the EC has said that Hungary has largely fulfilled its obligations in judicial reform, that the process has been agreed throughout, that the Commission cannot set new requirements and that there is little time left to complete the assessment process.

Viktor Orbán's government also denies that this is why decisions important to Kyiv are being blocked, with his cabinet arguing that Ukraine has failed to meet the conditions required for EU accession. The PM therefore opposes further aid to Ukraine and argues for an off-budget assistance instrument financed from member states' contributions, with a shorter planning period.

An inability to agree the support package and to open membership talks would be seen by Kyiv as “a failure of the whole EU”, Stefanishyna told the FT. The situation remains fluid, with diplomatic efforts under way to find a solution before the crucial summit. Several other proposals are reportedly on the table to circumvent the Hungarian veto.