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Thursday, February 29, 2024

EU Mulls Funding Cut to Hungary for Ukraine Aid Veto

A leaked document obtained by the Financial Times on January 28th reveals that the European Union (EU) plans to press its member states to halt all EU funding to Budapest if Hungary does not withdraw its veto on the proposed $55 billion military aid package for Ukraine. The European Council is set to convene a special summit on February 1st to discuss the four-year, 50-billion-euro ($55 billion) funding package for Ukraine. The EU had previously failed to reach a consensus on its long-term budget, which includes funds for Ukraine, during a December summit, primarily due to opposition from Hungarian Prime Minister Viktor Orban, whose Fidesz government is widely considered the most pro-Russian within the EU.

The leaked document, prepared by EU officials, criticizes the “unconstructive behavior” of the Hungarian Prime Minister and outlines a strategy to permanently cut EU funding to Hungary. The intention is to create economic uncertainty, potentially causing a run on Hungary’s forint currency and an increase in borrowing costs, as reported by the Financial Times. The document also suggests that Brussels aims to impact investor confidence in Hungary’s ability to generate employment and foster economic growth.

The authenticity of the leaked document has not been independently verified by The Kyiv Independent.

Hungary’s EU Affairs Minister, Janos Boka, informed the Financial Times that Budapest was unaware of the document but emphasized that Hungary does not yield to pressure and does not establish a connection between supporting Ukraine and access to EU funds.

Also Read: Russian Drone Strikes Injure 10+ in Southern and Eastern Ukraine

European Commission President Ursula von der Leyen, in January, expressed the EU’s intention to pass the aid package with the approval of 26 members, bypassing Hungary’s consent if necessary. However, the process for achieving this without unanimous support remains unclear.

In response to Hungary’s potential veto, the EU has considered the option of revoking Hungary’s voting rights, described as the “nuclear option,” if the veto persists at the upcoming European Council summit. This move, if implemented, would mark the first instance of an EU member having its voting rights restricted.

There are indications that Hungary may consider lifting the veto if the aid package undergoes annual review. However, some EU countries remain skeptical, fearing that Hungary might repeatedly block funding while seeking additional concessions.

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