Hungary has blocked an agreed EU loan to Ukraine of 90 billion euros, aimed at stabilizing the finances of the war-torn country, just days before the fourth anniversary of Russia's full-scale invasion. This was reported by the Financial Times, writes UNN.
Details
According to four people familiar with the situation, on Friday, the Hungarian ambassador to the EU expressed objections to the bloc lending this amount to Ukraine by issuing debt obligations guaranteed by the EU budget. The decision requires unanimity from all 27 EU member states.
The loan was agreed upon in December by EU leaders as a lifeline for Kyiv, as a budget deficit is looming in April. At that time, Hungary, Slovakia, and the Czech Republic agreed to support Ukraine only on the condition that they would not be responsible for interest costs or loan repayment — it was to be provided by the other 24 EU countries.
However, for the European Commission to be able to use the so-called EU budget reserve for borrowing and further lending to Ukraine, a unanimous decision is still required.
The IMF program of 8 billion euros, currently under negotiation, is also tied to Kyiv receiving the EU loan and could be jeopardized by the Hungarian veto. Tuesday marks the fourth anniversary of Russia's full-scale invasion of Ukraine.
According to the FT, if the decision is not unblocked, Ukraine risks financial collapse as early as the second quarter of the year.
Hungary's move to block the loan comes as the country prepares for elections in April, which could unseat Prime Minister Viktor Orban — a long-time opponent of Brussels and an ally of Russian President Vladimir Putin. Polls show that the opposition Tisza party, led by Péter Magyar, is ahead of Orban's Fidesz by about 10 points.
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