Almost two years after Russia invaded Ukraine, the war has reached a virtual stalemate. However, the country is in desperate need of support to keep its economy afloat. Unfortunately, political infighting within the European Union (EU) and the United States is depriving Ukraine of the financial lifeline it requires.
One of the main obstacles in providing aid to Ukraine is Hungarian Prime Minister Viktor Orban, who continues to oppose a 50 billion-euro ($54 billion) support package for the war-torn country. Orban's government has been criticized for its democratic backsliding, leading the EU to freeze Hungary's access to tens of billions of euros in joint funds. In response, Hungary has been vetoing EU political decisions, including those concerning Ukraine.
The 27 EU heads of state and governments are set to gather later this week for a crucial meeting regarding the future of Ukraine. While the majority of the member states are in favor of unlocking the financial assistance for Ukraine, Orban has remained uncompromising, provoking growing frustration among his counterparts. This has raised concerns about the ongoing stalemate and the effects it may have on Ukraine's prospects for economic stability.
Orban has consistently clashed with the EU since Russia's invasion of Ukraine. He has criticized the effectiveness of EU sanctions on Russia and advocated for immediate peace talks between Moscow and Kyiv. However, he has not provided clear details about the impact such negotiations would have on Ukraine's territorial integrity. Hungary has also accused Ukraine of mistreating its ethnic Hungarian minority in western Ukraine, further straining relations.
Despite Orban's previous agreement to not prevent the EU from starting membership negotiations with Ukraine, his decision to veto the aid package has exasperated many. For several member states, providing support to Ukraine is a matter of survival and strategic interest, as it would help prevent the war from spreading further into Europe.
The proposed financial aid for Ukraine includes grants and loans, forming part of the EU's budget plans until 2027. It aims to replace existing support programs provided to Ukraine. The EU has already granted Ukraine 18 billion euros ($19.5 billion) in macro-financial assistance for 2023. However, the lack of approval from Hungarian officials and the failure of U.S lawmakers to approve an additional multi-billion-dollar aid package have further complicated the situation.
To unlock the 50 billion euros ($54.1 billion) aid package, decisions within the EU's long-term budget must be unanimous among all 27 member countries. Hungarian officials have suggested splitting the aid into annual tranches with a review mechanism. However, this proposal has been met with skepticism, as it could potentially allow Orban to block the aid in the future.
As the stalemate persists, EU officials have been exploring alternatives, including delivering aid on a voluntary basis by decoupling it from the EU budget. This option would require approval from national parliaments, adding more uncertainty to the process. If no agreement can be reached, there is the possibility of extending the 18 billion euros in aid provided to Ukraine in 2023.
Orban's unclear intentions and the growing frustration among EU partners have led to speculation about potential sanctions against Hungary. The EU has the power to activate a mechanism that could result in Hungary's suspension from EU voting rights if there is a 'serious and persistent breach' of the bloc's values. Additionally, the European Commission can withhold approximately 20 billion euros ($21.7 billion) earmarked for Hungary from cohesion funds and post-pandemic aid in an effort to encourage cooperation.
The situation surrounding the financial aid package for Ukraine remains uncertain. Ukraine urgently needs the support to rebuild its economy and secure its future. However, the political infighting within the EU, particularly involving Hungarian Prime Minister Viktor Orban, is impeding progress. As the meeting in Brussels approaches, the hopes of finding a resolution to provide much-needed assistance to Ukraine remains uncertain.
