EU looks to appease Hungary’s Orbán with funds payout before Ukraine summit

Brussels is expected to unlock €10 billion in EU funding for Hungary on Wednesday (13 December), on the eve of a decisive summit on support for Ukraine that Hungary’s Prime Minister Viktor Orbán has threatened to derail.

EU leaders will descend on Brussels from Thursday to discuss renewing their support for Ukraine, with a €50 billion financial aid package and a political decision on accession talks.

Hungary has threatened to veto both support measures, which would condemn the summit to failure and leave Ukraine – and its neighbour Moldova, also hoping for accession talks – out in the cold almost two years after Russia launched its all-out invasion.

Orbán insists it has principled objections to Kyiv’s push towards membership, arguing that President Volodymyr Zelensky’s wartime administration has not done enough to fight corruption.

Budapest demands a “strategic discussion” on ties with Kyiv before making any decisions.

However, many EU diplomats believe that Orbán is exploiting the summit and the power of his veto on enlargement to blackmail Brussels into resuming Hungary’s suspended EU funds payments.

Budapest is ready to retract its veto on a Ukraine ‘package deal’ if Brussels agrees to unblock all funds frozen by the bloc over concerns about the rule of law, Orbán’s political director Balazs Orbán told Bloomberg on Tuesday (12 December).

“Hungary’s EU funding and Ukraine’s financing are two separate issues,” the adviser said, unrelated to the Hungarian prime minister.

“But if the EU insists that Ukraine’s financing should come from an amended EU budget, then the two issues become linked,” he added.

His comments come as the European Commission is set to unblock €10 billion of EU funds – just under half the blocked funds – in exchange for judicial reforms Budapest has implemented to address the EU’s concerns over the independence of its judiciary.

The European Commission will argue that this is not to appease Orbán ahead of the summit but because Hungary has responded to some of its concerns.

Speaking to reporters in Brussels on Tuesday, European Commission Vice-President Vera Jourova said her house had received its final set of answers from Hungary under a mechanism to impose rule of law conditions on economic cohesion funds.

“Now, as we speak, the Commission is doing the final work on the assessment so that the decision can be taken. I will not tell you how the decision will look like at this moment,” Jourova said, not previewing the decision.

According to EU officials working on the file, the funds are expected to be unfrozen.

The EU’s executive is likely to be accused of backing down in its standoff with Orbán, and it remains unclear whether the step will avert a blockage of the summit.

The rest of the blocked funds — about €11.7 billion — are expected to remain frozen due to issues related to the protection of human rights, the awarding of public contracts, and the state of academic freedoms in the country.

In addition, Hungary is also waiting to access €10.4 billion in grants and cheap loans from the EU’s post-pandemic recovery fund, which should also remain blocked until Hungary implements a series of anti-corruption reforms.

On Tuesday, the Hungarian prime minister’s aide also said Budapest would lift its veto only if Brussels handed over the total frozen funds, amounting to about €30 billion.

Over the past few days, EU diplomats have wondered about the ‘price’ Hungary is to attach to his decision at the summit.

“It’s clear to many of us that this will have to be a trade-off of some sort, it was only yet unclear what price Orbán would name for it,” one EU diplomat said.

“And it’s still unclear whether money will be enough for him,” they added.

[Edited by Alice Taylor]

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