EU leaders enter showdown with Viktor Orbán over €50bn Ukraine package

EU leaders have returned to Brussels for a second showdown in two months with Hungary’s Viktor Orbán over his refusal to sanction a new €50bn assistance package for Ukraine.

A mixture of frustration and anger prevailed in the city as leaders arrived for dinner on Wednesday night on the eve of the emergency summit, with aides lamenting the failure of the Hungarian PM to shift position since December, when he first blocked the funds.

“We are really at a crossroads,” said one EU official.

Diplomats in Brussels stress that Ukraine will not run out of funding for military equipment and ammunition as this comes through individual member states through the European Peace Facility.

But they are worried about liquidity in the Ukrainian economy and the signal a lack of unity will give to Putin.

This EU fund, combined with support from the International Monetary Fund and the European Bank for Reconstruction and Development, has allowed the salaries of teachers, doctors and soldiers to be paid, cash machines to continue working and buildings to be reconstructed where possible in the past two years.

Efforts to persuade Orbán to budge have redoubled in the past 24 hours, with representatives of the other 26 EU states agreeing to insert a compromise paragraph in the draft text of the agreement being sought at the summit on the budget.

In recent days Hungary said it would lift its veto but only if the budget was revisited every year of the four-year funding period.

On Wednesday morning member states’ ambassadors proposed an annual debate rather than a vote on the Ukraine fund facility.

The new draft text of the official agreement being sought pledges an annual European Commission review of the implementation of the funds facility.

On that basis “the European Council will hold a debate each year on the implementation of the facility with a view to providing guidance on the EU approach”, the draft text says.

Weighing on leaders’ minds is the prospect of Ukraine running out of money in the spring to pay civil servants, teachers, doctors and to keep pension funds topped up.

There are also increasing concerns among some member states that Russia, which has intensified its ammunition production, could win the war against Ukraine.

The EU’s chief diplomat, Josep Borrell, said on Wednesday that the EU expected to reach just 52% of its target to send 1m rounds of shells to Ukraine by March this year, according to the latest production data compiled by the commission.

The data had been collected after Germany put pressure on the EU’s External Action Service to try to nail down reliable data on each member state’s contributions.

Some say it was out of a sense of frustration in Germany, which has so far contributed €17bn (£14bn) with another €7.4bn committed for 2024, that other member states, particularly the large economies of France, Italy and Spain, were not doing enough.

Diplomats confirmed the survey had been completed but “some member states did not provide data”.

They expect it will be raised by the German chancellor, Olaf Scholz, and the Dutch prime minister, Mark Rutte, at the summit on Thursday.

Speaking after an EU ministers’ meeting in Brussels, Borrell also said EU countries planned to train another 20,000 Ukrainian soldiers, on top of 40,000 already trained.

On Wednesday five EU prime ministers including Scholz issued a blunt warning in an open letter that the EU had already fallen short of its ammunition promises.

skip past newsletter promotion

Scholz, Rutte and the leaders of Denmark, Estonia and the Czech Republic said: “Russia doesn’t wait for anybody and we need to act now. If Ukraine loses, the long-term consequences and costs will be much higher for all of us.”

One diplomat said the letter had a “dual message” to pile pressure on member states to increase military support but also to send a message to Vladimir Putin that time was on the EU’s side as it would not waver in its support for Ukraine.

A final push on Wednesday to win over Orbán at a meeting of EU representatives appeared to have failed.

One source said the Hungarian representative, who spoke first, told counterparts Hungary was “working intensively and constructively towards a solution that would be acceptable for everyone within the MFF [multi-annual financial framework]”.

But the representative then went on to request an annual review accompanied by a “unanimous vote on the funding” which one diplomat said would “in other words be establishing a yearly veto mechanism”.

This was “a clear red line mentioned by almost all delegations”, said a source.

They pressed upon Hungary that the annual review was a workable compromise.

Officials have expressed perplexity with Hungary’s hardline position.

The emergency summit was called just before Christmas, after Hungary blocked the package arguing more funds would prolong the war in Ukraine.

One senior official said: “We really are at a deadlock. We will not know what he thinks until we are inside the room.”

Officials have worked up a plan B, which would involve the 26 member states agreeing the money outside the EU budget.

Raising the money, a mixture of loans and state contributions, that way is more complicated, requiring parliamentary approval in some cases.

“It is not the end of the world, but it’s a very difficult situation,” said a source.

The Guardian