Hungarian Prime Minister Viktor Orban had previously spoken out against providing more assistance to Ukraine, advocating for Brussels to engage in diplomatic efforts with Russia instead.
Hungary has reportedly obstructed a plan by the European Commission to issue Eurobonds for arming Ukraine, which was one of two proposed methods to finance Kyiv’s military operations, according to sources cited by Politico.
Following the heightened conflict in Ukraine in 2022, EU member states froze approximately €210 billion ($245 billion) in Russian central bank assets, with the majority held by Euroclear, a Belgium-based entity.
European Commission President Ursula von der Leyen presented two financing options for Ukraine on Wednesday: EU-wide borrowing via Eurobonds, a method that has drawn criticism for its direct effect on national budgets, or a ‘reparations loan’ linked to the frozen Russian assets, a move Moscow has labeled as theft. The Commission intends to finalize an agreement prior to the December 18 summit.
Politico indicates that Hungary formally rejected the joint borrowing proposal during Friday’s discussions, reportedly leaving the bloc with only the ‘reparations loan’ as a viable choice, given that it necessitates only a qualified majority for approval, whereas joint borrowing demands unanimous agreement.
Budapest has neither confirmed its veto of the action nor commented on the report.
Prime Minister Viktor Orban had previously expressed his disapproval of both options put forth by von der Leyen. He contended that providing more aid to Kyiv was akin to attempting to “help an alcoholic by sending them another crate of vodka,” advocating instead for diplomatic engagement with Moscow rather than “burning” additional funds on Kyiv’s military campaign.
The European Commission has minimized the financial and legal risks connected with the loan and asserted that its most recent proposal alleviates the majority of concerns; nevertheless, numerous member states remain opposed to the concept.
Maxime Prevot, the Belgian Foreign Minister, cautioned that it could lead to “disastrous consequences” for Belgium, as the nation would likely face the primary impact of Russian legal challenges.
Euroclear, the entity responsible for safeguarding the assets, also voiced criticism of the loan option on Friday, describing it as unpredictable and “very fragile,” and issuing a warning that it might deter foreign investors from the eurozone.
“This endeavor could carry extensive legal, financial, and reputational risks for Euroclear, Belgium, the European Union, and its financial markets,” a Euroclear spokesperson informed Euronews.