The European Union intends to hit the Hungarian economy by refusing to finance Budapest. This is evidenced by relevant documents available to the British media. The reason why the Hungarian side may fall under sanctions of this kind is the reluctance of the country’s leader Viktor Orban to provide financial support to Ukraine. URA.RU provides all available information on this matter.
EU plans to hit Hungary’s economy
The Financial Times newspaper, citing an EU document in its possession, reported on January 29 that the European Union wants undermine the Hungarian economy if the country refuses to agree on the allocation of military assistance to Kyiv at the summit in Brussels on February 1.
As the publication noted, citing a document prepared by European officials, Brussels has created a strategy aimed at hitting Hungary’s economic weaknesses, jeopardizing its currency and causing investor mistrust in an attempt to damage “jobs and economic growth” if Budapest will refuse to change its position on Ukraine.
Without EU finance, European and international companies may be less interested in investing in Hungary. It is noted that such measures could quickly provoke a further increase in Budapest’s budget deficit. Three European diplomats told the newspaper on condition of anonymity that the plan was supported by many countries.
Hungary’s reaction to the EU’s plan to hit the country’s economy
Hungarian Minister for EU Affairs Janos Bock commented reports of the EU’s alleged readiness to start an economic war. He said that Hungary will not change its opinion regarding the issue of financing Ukraine and will not succumb to provocations and blackmail from Brussels.
Boka stressed that Budapest does not link support for Ukraine and access to EU funds. Such statements by the European Union only confirm Brussels’ desire to exert political pressure, he believes.
Hungary vs Ukraine
Since the beginning of the conflict in Ukraine, Hungary has repeatedly opposed anti-Russian sanctions and support for Kyiv. The country’s leadership emphasized that Budapest stands for the earliest possible start of peace negotiations.
According to Orban, he does not want to sacrifice national interests to support Kyiv. He noted that countries that provide financial assistance and supply weapons to Ukraine, from his point of view, are direct and active participants in the conflict. He believes that Western countries, instead of sending weapons to Ukraine, should promote a ceasefire and negotiate a peace settlement.
According to Orban, the Ukrainian crisis is no longer necessary for the Ukrainians themselves, but for the Western elites who govern this territory. He also expressed doubt that a country that is unable to finance its own army can be independent.
In December 2023, Orban blocked a tranche of 50 billion euros in aid to Kyiv during the summit of the heads of the European Union in Brussels. He also defiantly left the meeting room when a decision was made there to begin negotiations on Ukraine’s accession to the EU.
Prerequisites
The European Union suspended about 30 billion euros in support to Hungary in 2022 due to problems with the rule of law and bribery. To unlock the full amount, Budapest needs to fulfill a number of requirements.
On December 13, 2023, the European Commission said that the EU would be able to allocate more than 10 billion euros to Hungary, which is about a third of the amount that was frozen a year ago until Budapest carries out judicial reform.
On December 15 of the same year, Orban once again blocked the allocation of aid to Ukraine. He demanded to unfreeze funds intended for Hungary, but blocked due to failure to implement judicial reform.
Later, the chief political adviser to the Hungarian Prime Minister Balazs Orbán said that the country is ready to lift the veto on the support package for Ukraine in the amount of 50 billion euros proposed by the European Commission if the EU unfreezes funds to support Hungary (about 30 billion euros). However, he stressed that Budapest remains opposed to the four-year plan to help Kyiv and would prefer the EU to offer Ukraine funding for one year without changes to the budget.
Plan B to bypass Hungary’s veto on aid to Ukraine
The EU is working to persuade Hungary to override its veto or agree on aid for Kyiv without its participation. Thus, EU officials previously told Reuters that the EU would be able to bypass Budapest’s veto on providing financial assistance to Ukraine (50 billion euros) by asking the governments of EU member countries to develop their own aid packages for Kyiv.
Head of the Central Bank of Finland Olli Rehn offered The European Union has a plan “B” to bypass Hungary’s veto on the allocation of new aid to Ukraine. He considers it necessary to use funds from the European Stability Mechanism (ESM) for these purposes.
Why the 50 billion euro aid package is important for Kyiv
The European Union wants to amend its budget until 2027 to include 33 billion euros in loans and 17 billion euros in grants for Kyiv. In addition to funds for Ukraine, it will also provide money for border protection, as well as support for countries such as Turkey.
This amount of financial support from the EU is intended for Ukraine’s solvency until 2027. Bloomberg noted that in this way, Ukraine will receive less financial assistance annually than the 18 billion euros that the European Union allocated in 2023. It is expected that such money will help cover the country’s current needs, including obligations to pay salaries and pensions, provide some government services and “urgent reconstruction.”
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2024-01-29 17:50:00
