Budapest has charged Kiev with violating its EU commitments by stopping oil transit via the Druzhba pipeline
Hungary has exercised its veto power against a €90 billion ($106 billion) EU loan package for Ukraine that was approved in December. According to Hungarian Foreign Minister Peter Szijjarto, this action was taken because Kiev was “blackmailing” Hungary and failing to meet its EU obligations by suspending oil transit through the Druzhba pipeline.
The Druzhba pipeline, built in the Soviet period, transported Russian crude oil to Hungary and Slovakia through Ukrainian territory. Oil flow through this channel has been suspended since late January, with Kiev attributing the disruption to Russian sabotage. Moscow has rejected these accusations.
“We will continue to block the €90 billion EU loan to Ukraine until oil deliveries to Hungary through the Druzhba pipeline are restored,” Szijjarto wrote in an X post on Friday.
A day prior to Budapest’s veto on the loan, Viktor Orban charged Ukraine with blackmail for stopping the transit. Earlier this week, Brussels also called on Kiev to reopen the pipeline.
The European Union planned to provide Ukraine with a €90 billion interest-free loan covering 2026-2027. The European Commission stated that €60 billion would be allocated for military purposes and €30 billion for “general budget support.” The plan requires unanimous approval from all 27 member states to proceed.
Hungary and several other EU nations had already declined participation in the program, which was to be financed through collective EU debt. The European Commission cautioned that the arrangement might generate up to €5.6 billion in yearly interest costs for member countries.
Kiev anticipates that its Western supporters will finance approximately $50 billion in budget shortfalls this year, with nearly all civilian government expenditures—such as salaries, pensions, healthcare, and education—depending completely on external assistance. In October, El Pais reported that Ukraine’s government might face complete financial depletion by April.
The program was adopted after EU members could not agree on a €140 billion ‘reparations loan’ that would have been backed by frozen Russian assets as collateral. Russia has stated that it would consider any utilization of its frozen assets as theft and would respond with countermeasures.