EU leaders seek deal to fund Ukraine as Orban resists

EU leaders will face Hungary’s Prime Minister Viktor Orban at a crunch summit meeting in an attempt to overcome his veto on €50 billion in financial aid for Ukraine.

Mr Orban, Russia’s closest ally in the EU, prompted anger from his 26 counterparts in the bloc by thwarting a deal last December to keep funds flowing to Kyiv nearly two years into Moscow’s invasion.

The Hungarian leader has been accused of holding Ukraine’s funding hostage in a bid to blackmail Brussels into releasing billions of euros in frozen EU funds for Budapest.

EU officials have been trying to negotiate a compromise with Hungary to get agreement on the four-year package for Ukraine as part of a broader overhaul of the bloc’s budget.

Other leaders have rejected a proposal from Budapest that Mr Orban could approve the aid if he gets the chance to veto it again each year and are instead offering him only an annual debate on the issue.

If they cannot convince Mr Orban to drop his opposition, EU leaders have pledged to club together as 26 countries to keep aid flowing for Ukraine’s government to allow it to continue paying salaries and services.

But with Kyiv facing possible budget shortfalls by spring and doubts over support from the United States, that option would take more time to put in place and likely cover aid for only one year.

“One way or another, we will find some solution, with or without Orban, to support Ukraine,” Poland’s Prime Minister Donald Tusk said.

Mr Orban, a veteran of numerous run-ins with Brussels, will not be easy to convince and the summit in the EU capital is set to last for hours.

The Hungarian leader struck a combative note as he arrived in Brussels yesterday evening, posting a photo of himself with the caption “We Saddle Up!”.

Mounting frustration at Hungary has seen calls grow for other leaders to use the EU’s Article 7 to strip Budapest of its voting rights.

That would take unanimity from all other 26 leaders, and few have been willing to push publicly for this “nuclear option” just yet.

Several hundred farmers also planned to converge their tractors on Brussels to bring the grievances of the agriculture protest movement to the EU’s doorstep with the flood of cheaper Ukrainian imports triggered by the conflict high on their list of complaints.

The major leverage for Brussels is around €20 billion in frozen EU funds that it refuses to give Budapest because of its poor record on issues including corruption and LGBTQ rights.

In December, Mr Orban allowed through a decision to open membership talks with Kyiv a day after getting a separate €10 billion released from Brussels.

And there are strong suspicions that he is attempting a similar move now to try to get further funding, even if Brussels insists the two issues are not linked.

“It’s not about Ukraine, but basically Orban is using this opportunity to blackmail the institutions of the EU and other member states,” a senior European diplomat said.

While the focus will be on Mr Orban and the general funds for Kyiv, leaders are also set to debate the future of EU military support for Ukraine.

German Chancellor Olaf Scholz, whose country is the largest European donor to Ukraine, has called for others to lay out their military support and do more to help Kyiv.

“We will do everything to ensure that the joint contribution from Europe is so huge that Ukraine can build on it and that Putin would not be able to count on our support waning at some point,” Mr Scholz told the German parliament.

Accusations have been levelled that key EU economies such as France, Italy and Spain are not pulling their weight on arming Ukraine.

The EU’s diplomatic service is pushing for an extra €5 billion for the military fund but Germany has been arguing contributions should be offset against bilateral aid.