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The European Commission is set to unfreeze €10bn of Hungary’s EU funds blocked over rule of law concerns on the eve of a summit where Viktor Orbán has vowed to block financial and political support for Ukraine.
The Hungarian prime minister has for weeks threatened to veto the bloc’s plans to allocate €50bn to Kyiv over the next four years as well as a decision to start EU membership talks with Ukraine, as long as his country’s funding is not unblocked in full.
Pressure on EU leaders to throw a financial lifeline to Ukraine nearly two years since Russia’s full-scale invasion is mounting after Volodymyr Zelenskyy’s unsuccessful bid to secure US funding during his trip to Washington earlier this week. The Ukrainian president met Nordic leaders in Oslo on Wednesday and was expected to make an appearance at the summit in Brussels on Thursday, which he described as “not an easy meeting”.
Zelenskyy said he was aware of Hungarian opposition but stressed: “We have done absolutely everything . . . to prevent one or another state blocking the beginning of this negotiation.” If Ukraine did not receive a green light from the EU summit, it would show “that Putin has vetoed this decision”, Zelenskyy warned in Oslo.
Orbán on Wednesday signalled willingness to “make financial deals on financial matters” but suggested he continued to oppose the start of EU membership talks with Kyiv. Ukrainian officials insist that both decisions are equally important for morale in the war-torn country and trust in continued support from western allies.
If the pugnacious Hungarian prime minister — the EU’s longest serving leader — does strike a quid pro quo deal before the end of the week, it would match his typical style of using the country’s veto power in the unanimity-driven bloc to extract last-minute concessions from maximalist demands.
It is unclear if the €10bn, which Brussels is unblocking on the grounds of a justice reform carried out by Hungary, will be sufficient to convince Orbán to lift his veto. A Hungarian top official has indicated that his country is owed more than €30bn.
Still, officials and diplomats are hopeful that a deal can be reached by Friday at least on the financial support package for Kyiv. “We’re getting there,” said a senior EU official, referring to negotiations over the Ukraine funding. “I think we can make something happen this week.”
The Hungarian premier’s political director Balazs Orbán (not related) late on Tuesday told Bloomberg that Hungary would “consider contributing” to Ukraine funding, if the commission unlocked the entirety of Budapest’s frozen funds amounting to €31.2bn.
But that is a political non-starter for Brussels, given that the rest of the funds remain blocked until Hungary fulfils a number of other conditions linked to anti-corruption efforts, auditing EU funds, its treatment of refugees and the LGBT+ community and academic freedom.
In a last-ditch attempt to stop any money going to Budapest, the leaders of the largest political groups in the European parliament were on Wednesday morning preparing a letter to Ursula von der Leyen, the commission president, to express “deep concern” because they believed Hungary had not fulfilled the conditions.
The draft letter, seen by the FT, and co-signed by von der Leyen’s own political group, the centre-right European People’s party, said there was evidence of government interference in the elections of a new judicial council set up to oversee courts, which conclude next month.
They also attack a proposed “defence sovereignty law”. “This would allow the prime minister to create a new authority directly under his control, equipped with sweeping powers without any democratic supervision.”
Additional reporting by Andy Bounds and Henry Foy in Brussels.