EU unblocks €90 billion Ukraine loan after Hungary lifts veto

EU ambassadors have approved the disbursement of a promised €90 billion ($106 billion) loan to Ukraine, along with a new package of sanctions against Russia, after Hungary lifted its veto, the bloc’s Cypriot presidency said, Reuters reports.

The European Union’s 27 member states are now expected to formally sign off on the deal by April 23 afternoon, a spokesperson for the Cypriot presidency added.

The EU had agreed last year on the loan to keep Ukraine liquid through 2026 and 2027. However, Hungary blocked approval, with Russia-friendly Prime Minister Viktor Orban accusing Ukraine of sabotaging the transit of Russian oil through a pipeline damaged by Russian attacks.

The dispute also delayed adoption of the new sanctions package against Russia, which the EU had initially aimed to approve to coincide with the fourth anniversary of Russia’s full-scale invasion of Ukraine on February 24, 2022.

The deadlock was resolved after Hungary’s oil group MOL Group said it had been informed that the Ukrainian operator of the Druzhba pipeline was ready to resume crude oil transit to Hungary and Slovakia.

MOL stated it expected the first shipments via the pipeline to arrive in Hungary and Slovakia by April 23 at the latest. Both countries remain heavily reliant on Russia for a significant portion of their energy supplies.

Ukraine’s prospects for receiving the loan had already improved after Orban’s defeat in Hungary’s parliamentary election on April 12. The leader of the winning party, Peter Magyar, has said he will no longer block EU funds for Kyiv, although he is only expected to take office next month.

By Vafa Guliyeva