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The Hungarian government blocked a deal on an €18 billion aid package for Ukraine on Tuesday, forcing the European Commission and other EU countries to seek an alternative solution to ensure Kyiv gets the funds it needs. she needs so much in January.
The Commission will consider how to “bring the necessary solution to Ukraine as early as January”, EU Budget Commissioner Johannes Hahn told a public session of the bloc’s finance ministers. It would involve something akin to so-called enhanced cooperation, a legal route to avoid vetoes, EU officials have said.
But this solution would require EU countries to provide national budgetary guarantees which, in some cases, require parliamentary approval, which could take some time.
Hungarian Prime Minister Viktor Orbán has chosen to play hardball, using the need for his approval for Ukraine aid as leverage to secure his share of EU and stimulus funds. The EU has sought to withhold some funds intended for Budapest due to rule of law violations.
Hungary’s veto on Tuesday meant that decisions on all the other files on the finance ministers’ agenda – a minimum corporate tax rate, which Budapest is also blocking, the Hungarian stimulus package and related subsidies from 5.8 billion euros, and the decision to freeze 7.5 billion euros of EU funds for Hungary due to corruption concerns have been postponed.
“We were not able to adopt the package as a whole but we will not be discouraged,” Czech Finance Minister Zbyněk Stanjura said in his role as chairman of the meeting of finance ministers. “Our ambition remains to start disbursements to Ukraine in January,”
He instructed the Council to work on “a solution supported by 26 member states”, which would circumvent the Hungarian veto.
The Czech presidency must now decide which way to go: a possible new summit of finance ministers later in December – with 12 December as a possible date – or taking the matter to the EU leaders’ meeting in mid- december.
EU governments have until December 19 to take a position on the freezing of European funds intended for Hungary. Orbán must pass his recovery plan by the end of the year or risk losing 70% of the 5.8 billion euros in subsidies.