The EU has warned Hungary that if it does not lift its veto on aid to Ukraine at the February 1 summit, other EU countries will publicly declare that they will not provide financial assistance to Hungary.
This could lead to investors being less interested in investing in Hungary, which could cause the Hungarian forint to depreciate.
This could ultimately lead to economic problems in Hungary, such as job losses and slower economic growth. Under pressure from the EU, Hungary agreed to a compromise on the issue of assistance to Ukraine.
The European Union is concerned about Hungary’s economic vulnerability. The Hungarian economy is characterized by high government deficits, high inflation, a weak currency and high debt service payments. In addition, the Hungarian economy is largely dependent on foreign funding, including funding from the EU.
Hungarian EU Affairs Minister Janos Boka said Hungary is ready to support a €50 billion aid plan for Ukraine, but demands that it have an annual veto on payments.
Other EU countries rejected the proposal, fearing that Hungarian Prime Minister Viktor Orban would use it to block payments each year and push for further concessions. However, one diplomat said Orban did not have the power to veto the funding.
Some EU countries have considered invoking Article 7 of the Treaty on European Union, which allows the EU to strip a member state of its voting rights or block its funding. However, other countries have rejected the idea because it requires unanimous support and many countries do not want to impose such serious sanctions on Hungary.
Boca said it was important to maintain EU unity. He stressed that Hungary is ready to make compromises, but only if they do not affect its vital interests.
If compromises are not reached, Hungary will give preference to its original proposal for a separate fund for Ukraine outside the EU budget.
Hungarian veto to help Ukraine
In December 2023, Viktor Orban put forward a condition for supporting a new aid package for Ukraine from the European Union. To do this, the organization needs to pay all funds frozen for Hungary.
By the way, the European Union was unable to approve the allocation of 50 billion euros for Ukraine, since Hungarian Prime Minister Viktor Orban vetoed it.
2024-01-29 01:10:09
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