On Tuesday, Hungary vetoed an 18 billion euro ($19 billion) loan from the European Union to Ukraine as its dispute with the organization over undermining democracy raged on and the other 26 members of the union put off making a decision regarding the release of billions of dollars of aid to Budapest.
Hungarian Minister Mihaly Varga reaffirmed his government’s objection to a loan for Ukraine financed by joint EU borrowing at a meeting of EU economic and finance ministers in Brussels. Budapest has stated that it will assist Kiev on a bilateral basis.
Varga’s Lithuanian colleague, however, told Reuters ahead of the talks that it was “immoral” for Hungary to hold up EU aid for Ukraine. She said Hungary was using this as a bargaining chip to get other member states to agree to handing billions of euros from their joint EU budget to Budapest.
On Tuesday, the chairman of the ministerial meeting said Hungary’s position would not stop the other members from aiding Ukraine.
“We will not be discouraged. Our ambition remains that we’ll start the disbursement of our aid to Ukraine in January,” said the Czech Republic’s Finance Minister Zbynek Stanjura.
“This means we will be looking for a solution supported by 26 member states,” without Hungary, he added.
Without Budapest’s approval however, raising the funds is bound to be more complicated and could take longer.
Locked in a tug-of-war with Hungary, the ministers decided to take off Tuesday’s agenda any decision about 7.5 billion euros in EU funds earmarked for Hungary.
The ministers had been supposed to vote on a recommendation last week by the bloc’s executive European Commission to freeze the money, worth 65% of cohesion funds assigned to Hungary from the EU budget until the end of 2027, over corruption risks.
The ministers also delayed any decision on Budapest’s spending plan for another 5.8 billion euros envisaged for Hungary from the bloc’s economic stimulus fund, set up to help economies recover from the COVID pandemic.
Together, the funds add up to nearly 9 percent of Hungary’s estimated 2022 GDP.
“Hungary considers it a dangerous precedent that the payment of EU funds to Hungary is linked to other, completely unrelated issues,” Hungarian government spokesman Zoltan Kovacs said, adding that Budapest met all conditions to access EU money.
“We refuse to make EU funds conditional on changing our position,” he said.