Orbán Makes New Year Offer on his Ukraine Funding Veto

The move would involve disbursing the EUR 50 bln aid package in increments of EUR 12.5 bln (USD 13.7 bln) over the course of four years, pending unanimous yearly approval. While, practically, this would mean that Orbán could feasibly block the EU funding each year in order to gain concessions from Brussels for withholding his veto, it also indicates that pressure on Orbán to accept the aid package by the coming EU summit on Feb. 1 could be coming to bear.

At the previous summit on Dec. 14-15, Orbán was the sole EU leader to withhold his approval for the funding, which requires unanimous agreement to pass, despite suggesting a day earlier that he might be open to compromise following an EU concession. On Dec. 13, the EU decided to release more than EUR 10 bln in funds to Hungary, roughly one-third of the money it has withheld over rule-of-law and graft concerns.

While the European Commission said in a statement that it released the funds because of its satisfaction with laws Orbán’s government had passed to strengthen judicial independence, the Prime Minister had insisted on Hungary receiving its own funding before he would consider backing support for Ukraine.

Financial, Strategic or Policy

“I’m ready to make a financial deal on financial issues,” Orbán told the Mandiner weekly podcast the same day. “But I’m not ready to make a financial deal on strategic or policy issues,” he said, suggesting he would torpedo Ukraine’s efforts at opening accession talks with the EU.

In fact, he did just the opposite. Although Orbán followed through with blocking the financial aid package for Ukraine, he tacitly allowed the EU to start membership negotiations with Ukraine by effectively abstaining. Following three hours of deadlock, Politico reported that German Chancellor Olaf Scholz had suggested to Orbán, among his EU counterparts, that if he really wasn’t open to compromise, he should consider briefly leaving the room. This solution would enable the other 26 member states in agreement to approve opening accession talks, while Orbán could still say he had not voted in favor, as according to EU rules, unanimity can still be fulfilled if one leader is absent.

Relating his own experience of the “long and difficult” debate over the course of eight hours, Orbán told Kossuth Rádió on Dec. 15 he had tried to convince his counterparts that Ukraine was “unprepared to become an EU member,” but “they couldn’t be persuaded. I tried to explain that helping badly is worse than not helping at all,” he added. Orbán said that by leaving the room, Hungary did not block the decision but would bear no responsibility for it, emphasizing that the “bad decision” would “not weigh on Hungary’s conscience.”

Yet, some EU officials are said to be growing fed up with Orbán’s obstructionism and are considering invoking Article 7 of the EU Treaty against Hungary, which could lead to the suspension of its voting rights, according to a report from the Financial Times. Although any single EU member state could veto this process, Hungary “no longer has a guaranteed protector,” as erstwhile ally Poland recently elected its liberal opposition to power, bringing it more in line with EU orthodoxy. However, many within the bloc remain apprehensive about wielding “the EU’s biggest weapon against a member state” and would still prefer to persuade Orbán to cooperate voluntarily or to seek alternative means of providing support to Ukraine without Hungary.

This article was first published in the Budapest Business Journal print issue of January 12, 2024.