We have a deal!, announced the President of the European Council, Charles Michel, on the occasion of the negotiations on changing the EU budget and granting the new financial aid to Ukraine, which was blocked by Hungary until now.
All 27 heads of state and government approved the provision of an additional 50 billion euros to Ukraine from the European budget, he added.
We have a deal. #Unity
All 27 leaders agreed on an additional €50 billion support package for Ukraine within the EU budget.
This locks in steadfast, long-term, predictable funding for #Ukraine.
EU is taking leadership & responsibility in support for Ukraine; we know what is…
— Charles Michel (@CharlesMichel) February 1, 2024
Hungary has so far held back on backing a deal on changes to the EU budget over Ukraine, and there were fears that Prime Minister Viktor Orbán could block the deal again.
Budapest first resisted, then proposed that budget transfers to Ukraine be approved every year.
With today’s decision, it is planned that the specified amount will be paid in the next four years.
“This ensures stable, long-term and predictable funding for Ukraine. The EU takes a leading role and responsibility in supporting Ukraine. We know what is at stake,” Charles Michel pointed out.
The President of the European Commission, Ursula von der Leyen, said that today is “good day for Europe”.
According to diplomats, in exchange for the “green light” for aid to Ukraine, the bloc did not commit to unblocking funds worth billions of euros for Hungary, which have been frozen by Brussels due to concerns about the state of human rights and the rule of law in the country.
Ukrainian President Volodymyr Zelensky thanks for EU help.
“It is very important that the decision was taken by all 27 leaders, which once again proves the strong unity of the EU. The EU’s continued financial support for Ukraine will strengthen long-term economic and financial stability, which is no less important than military aid and sanctions pressure on Russia”, Zelensky pointed out.
What’s the plan?
The financing plan for the next four years should provide Kyiv with a predictable budget policy. About half of Ukraine’s budget for this year, or almost $40 billion, is set aside for defense; they must be covered by taxes. To finance the other half, it is necessary to raise about $37 billion from external sources, according to IMF estimates.
Part of the funds will be provided by the IMF. The European Union will provide 12.5 billion euros ($13.6 billion at the current exchange rate) per year. This amount will consist of loans and grants.
On Wednesday morning, Brussels made the latest proposal – to consider the allocation of funds every year, but without the possibility of blocking. Representatives of Hungary, however, said they would not give in to blackmail, especially after the Financial Times earlier reported on a document in which the European Commission threatened Hungary with economic consequences – fall in the value of the forint, outflow of foreign investors, if Orban does not allow aid to Ukraine again.
Depriving Hungary of the right to vote was also discussed: Article 7 of the Treaty on European Union allows this to be done in relation to countries that do not follow EU values.
“It’s not even about Ukraine anymore, from my point of view”a senior EU diplomat told the FT ahead of the meeting.
“Orbán is using this opportunity to blackmail the institutions and the rest of the EU.”
As a result, EU leaders agreed to discuss annually how the program is being implemented. After two years, they can ask the European Commission to draw up an interim report on the progress of its implementation.
The compromise was reached after Orbán held closed meeting at the beginning of the summit with Michel, the President of the European Commission Ursula von der Leyen and the leaders of the three leading countries of the union – Germany, France and Italy.
“Orbán came to his senses”a diplomat briefed on the talks told the FT.
Funds for Hungary remain frozen
At the same time, European funds for Hungary remain frozen despite the aid deal for Ukraine, an EU diplomat said.
According to the diplomat, Hungary must fulfill its obligations to meet the requirements for receiving EU funds.
Orbán did not speak to journalists today when he arrived for the summit. Instead, he posted photos of himself on social media showing him walking around tractors ahead of a farmers’ protest in Brussels.
The EU’s decision comes at a time of uncertainty over future US aid to Ukraine. Some EU officials have said that without new budget support, Kiev will run out of money in March.
2024-02-01 11:50:53
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