Patience wears thin with Hungary as EU leaders look towards tough Ukraine summit

As EU leaders prepare to push ahead with a €50 billion Ukraine support package this week, with or without Hungary, many in Brussels realise the step could come with a high cost.

Topics on the table for Thursday’s summit (1 February) will include renewed financial and military support for Ukraine and greenlight for the EU’s annual budget.

After Hungary’s Prime Minister Viktor Orbán in December impeded the joint decision on the four-year aid package, EU leaders will be prepared for a fight as they try again to reach a deal.

Over the past week, Budapest has doubled down on its aid demands despite a compromise proposal being put on the table earlier this month.

EU officials and diplomats expect that it will come down to a similar ‘last minute’ decision at the summit itself like last time.

Back then, Orbán left the room to let the other 26 EU leaders decide to launch membership talks with Ukraine, something his nationalist and pro-Moscow government strongly opposed but did not formally block.

But many in Brussels fear this time around, it could come at a bigger political cost.

Hungary increasingly ‘unflexible’

Senior EU officials late last week said talks on giving Ukraine €50 billion in financial aid have been getting “more complicated” since Hungary has not been flexible ahead of this week’s summit.

“The negotiation is getting a bit more complicated (…) the position of Hungary has not really been flexible on this,” a senior EU official said on Friday, speaking on condition of anonymity.

Earlier this month, EU officials had started to signal they might be open to including a mid-term review of the four-year support package next year, in 2025, which would allow him to object to the funding package, according to people familiar with the discussions.

This would have also included a so-called “emergency brake” mechanism that any member state could activate if it has concerns and request a debate on the matter, they said.

Some ideas proposed by Orbán – such as having aid to Ukraine subject to unanimous approval every year – were not acceptable to many EU member states, they said.

“No member state wants to embark on a situation where you would have to go through unanimity to deliver support to Ukraine,” the EU senior official said.

Currently, most EU member states still believe a deal at EU27 could be possible.

“For now, we’re still aiming to go for Plan A [with EU27], but there should be no illusions that if necessary, we’re willing to move with EU26,” one EU diplomat said.

Another option to send money to Ukraine outside the EU budget would require national parliaments’ ratification, causing delays and possibly more uncertainty.

“We’re very conscious that a ‘Plan B’ solution would require some member states – such as Germany – to go to their parliaments, but we’re willing to accept that if it’s the only option left,” they added.

Hitting where it hurts

There is increasing frustration with Hungary among the other EU member states, which wanted to give more aid to Ukraine as funding is slowly running dry on both sides of the Atlantic, a senior EU official involved in preparations for the summit added.

Should Thursday’s summit again end in feuds and the EU26 leaders be forced to move forward alone, having to circumvent Hungary in a complicated workaround, some EU diplomats expect the mood to shift permanently against Budapest.

A few member states have said Orbán is now breaking the basic duty of any EU member, that of “sincere cooperation”, EU diplomats say.

Brussels has outlined a strategy in which EU26 leaders would publicly vow to permanently shut off all EU funding to Budapest to spook the markets, the FT reported on Sunday (28 January).

According to the FT report, this would explicitly target Hungary’s economic weaknesses, imperil its forint currency and drive a collapse in investor confidence in a bid to hurt “jobs and growth” if Budapest refuses to lift its veto against the aid to Kyiv, Brussels stated in the document.

Shadow of Article 7

Over the past week, some European diplomats also have been giving signals that in such a case, it would not be unthinkable to look in the long-term at the potential use of Article 7, the bloc’s so-called “nuclear option”, which could ultimately see Hungary suspended in the EU voting process.

Several EU countries would be ready to make a move on Article 7 against Budapest, several EU diplomats said, though adding realistically say such a procedure would take months to go through.

“We just need to look at the treaty article itself, it speaks of a ‘serious and persistent breach’ of EU values – if the current situation isn’t one, then I don’t know what is,” a second EU diplomat told Euractiv.

“If he’d overplay his card at this summit, it could backfire, also because the anger is coming from too many corners to ignore,” a third EU diplomat said.

However, while most EU member states stressed this would not be a direct connection to the EU summit, there would be enough substance in the rule of law context than in the past, they added.

“Hungary has annoyed quite a few countries across the board by now – the Easterners over Ukraine, some Southerners over his veto putting obstacles to their migration funding under the EU’s not-yet-agreed budget,” according to a fourth Western European diplomat.

“If he would overdo it this time, those voices would become much louder,” they added.

However, EU diplomats say that many member states have said they would be uncomfortable with a 26-vs-1 dynamic in such a case, wary of being next in line.

[Edited by Alice Taylor]