BRUSSELS — The European Union’s ambition to provide a substantial €90 billion loan to Ukraine is encountering significant obstacles as Hungary remains resolute in its opposition. Initially, Hungarian Prime Minister Viktor Orbán had signaled approval for the financial assistance, which is crucial for Ukraine to address its funding shortfall. However, he has since reversed his stance, creating a complex situation for EU leaders.
Legal challenges and diplomatic tensions
According to EU regulations, unanimous consent from all 27 member states is required for the loan to proceed, which complicates the current scenario given Hungary’s dissent. Discussions are ongoing among European Commission officials about potential pathways to secure the funds for Ukraine without Hungary’s support, but a definitive solution has yet to be identified. Commission President Ursula von der Leyen has expressed a strong commitment, stating,
“We will deliver on the loan one way or the other. Let me be very clear, we have different options, and we will use them.”
Despite these assurances, a senior diplomat has highlighted the challenges of circumventing Hungary, noting that there is no straightforward legal or procedural mechanism to do so. Hungary’s continued insistence on leveraging its position stems from ongoing disputes with Ukraine regarding a broken pipeline that previously facilitated the transport of inexpensive Russian oil to Central Europe.
Diplomatic maneuvers and potential solutions
The EU is racing against time to resolve this issue before a scheduled summit of EU leaders on March 19. An early draft of the summit’s conclusions emphasizes the collective desire to support Ukraine, eagerly anticipating the initial disbursement of funds by early April. However, Orbán’s unwavering stance complicates the EU’s unity and effectiveness, raising concerns about the implications of one nation’s dissent on collective decision-making.
European Council President António Costa has urged the Commission to utilize all available treaty mechanisms to address this situation, reminding the group that
“we have tools in the treaties.”
However, effectively employing these tools to override Hungary’s veto is fraught with legal complexities, as actions such as invoking Article 7 of the EU treaty or pursuing enhanced cooperation both face significant hurdles.
As a potential remedy, the European Commission is considering dispatching a fact-finding mission to examine the Druzhba pipeline, the focal point of the dispute. Hungary and Slovakia have called for this oversight, claiming it could ease tensions surrounding the loan. Nevertheless, logistical challenges and security concerns have made organizing such a mission difficult. Both countries have expressed interest in appointing delegates to accompany the mission, which complicates the already sensitive situation.
Ukrainian President Volodymyr Zelenskyy has indicated a willingness to restore the pipeline, albeit reluctantly, acknowledging that doing so might be necessary to access the critical funds. He stated,
“To be honest, I would [rather] not restore it. But since the EU loan for Ukraine for €90 billion will be blocked without the restoration of the oil pipeline, the restoration of Druzhba is possible within a month and a half.”
As the EU continues to navigate this intricate diplomatic landscape, the outcome remains uncertain, with all eyes on the upcoming summit and the potential for a breakthrough in the negotiations.