EU faces delicate balancing act as Hungary blocks Ukraine loan

The European Commission is exploring ways to resolve the deadlock caused by Hungary’s refusal to approve a €90 billion loan for Ukraine, while officials warn that applying pressure on Prime Minister Viktor Orbán during the election campaign could have unintended consequences.

In Budapest, the government is reportedly leveraging the Ukraine loan and the EU standoff as a political strategy against the opposition ahead of the April 12 elections. EU officials say Orbán’s obstructive behavior appears to be influenced by the upcoming vote, POLITICO reports.

Negotiations over the loan are ongoing within the European Commission and between EU capitals. The next meeting of EU ambassadors is scheduled for February 25, but progress remains uncertain.

EU sources note that the situation is complicated by multiple factors, including the gas pipeline, Hungary’s elections, and Ukraine’s urgent need for funding, making the outcome difficult to predict. Officials also emphasize that Hungary has become more unpredictable than usual.

There is concern among EU officials that Orbán rarely reneges on agreements once they are concluded. In correspondence with European Council President António Costa, Orbán described himself as a disciplined and consistent member of the Council. However, the approaching elections may affect his behavior, according to the officials.

As a result, the EU faces limited options. Pressuring Hungary during the campaign could strengthen Orbán’s domestic position. Invoking Article 7 to restrict Hungary’s voting rights on Ukraine-related matters could bypass the opposition, but may boost the prime minister’s standing in the election. Another potential option—suspending EU funding to Hungary or initiating infringement proceedings—would take time, which Ukraine currently cannot afford.

By Vafa Guliyeva