BRUSSELS — Ukraine will get money from EU countries to fund its war effort even
if Hungary and Slovakia continue to block a promised €90 billion loan, two EU
diplomats told POLITICO.
EU leaders will meet for a summit in Brussels next week, hoping to convince
Hungarian Prime Minister Viktor Orbán and his Slovak counterpart Robert Fico to
stick to their promise to approve the loan, which is supposed to provide
two-thirds of the money Ukraine needs to continue fighting the Russian invasion
until the end of 2027.
But if the pair refuse to back down, Baltic and Nordic countries have a plan to
give Ukraine enough money to keep it afloat through the first half of this year,
said the two EU diplomats familiar with the discussions. They were granted
anonymity to speak freely about the sensitive negotiations, as were others in
this story.
The total amount being considered is €30 billion, another person with knowledge
of the talks said. As these would be bilateral loans, they would not require EU
approval.
Separately, Dutch Finance Minister Eelco Heinen told his peers on Tuesday that
his government has made provisions to send Kyiv €3.5 billion a year in bilateral
support until 2029, two other diplomats told POLITICO.
Budapest, or any other EU capital, can block the €90 billion loan despite
already agreeing to it in December because one of the bills that needs approval
before the cash can be disbursed requires the approval of all member countries.
“It’s not the first time we are facing a similar kind of difficulties with
Hungary,” the EU’s Economy Commissioner Valdis Dombrovskis said in response to a
question from POLITICO on Tuesday. “We will deliver on this loan one way or
another.”
The idea of providing individual funding to Ukraine was already discussed before
the December summit, at which all member countries’ leaders agreed to press
ahead with one EU loan. The individual loans option was seen as unpalatable at
the time because it undermined the EU’s solidarity with Ukraine and exposed deep
splits in the bloc.
But if Orbán refuses to drop his opposition, that might be the only way forward.
UKRAINE HAS MONEY UNTIL MAY
Kyiv’s funding needs have eased after the International Monetary Fund approved
an $8.1 billion loan late last month, disbursing $1.5 billion straight away. The
country should have enough money to stay solvent until early May, four people
familiar with Kyiv’s finances told POLITICO.
Previous EU estimates had indicated Kyiv would go broke at the end of March,
putting it at a major disadvantage against Russian forces and amid ongoing
U.S.-led peace talks, and therefore increasing the urgency of the €90 billion EU
lifeline.
The loan seemed locked in until late January, when a Russian drone attack
damaged the Druzhba pipeline, which transports Russian oil across Ukraine to
Hungary and Slovakia. Budapest and Bratislava are exempt from EU sanctions on
Russian oil.
Orbán accused Ukraine of intentionally delaying repairs to the pipeline for
political reasons, and reneged on the commitment he made at the December summit
to wave the Ukraine loan through. The Hungarian leader also blocked the EU’s
20th sanctions package against Russia, which requires unanimous support from all
27 leaders to pass.
Orbán, who faces a crucial national election on April 12, has been campaigning
on an anti-Ukraine platform. His political party, Fidesz, is behind the
opposition Tisza in the polls by a wide margin.
Ukrainian President Volodymyr Zelenskyy, who has denied the accusation that Kyiv
is refusing to fix the pipeline for political reasons, last week told reporters
that while he did not want to do so, he could get oil flowing through the
Druzhba “in a month or a month and a half” — which would be just after the
Hungarian election.
Zelenskyy last month told reporters including POLITICO that Ukraine wasn’t
fixing the pipeline because Russia had targeted it repeatedly, including while
maintenance workers were on-site repairing it.
WAITING FOR THE HUNGARIAN ELECTION
The calculation in both Kyiv and Brussels is that if Orbán loses the election,
opposition leader Péter Magyar may be more amenable to approving the loan to
Ukraine, particularly if the Druzhba pipeline is fixed or if Hungary receives
some other carrot from the EU, according to three of the diplomats.
While Magyar has made critical statements about Ukraine during the election
campaign and — like Orbán — has ruled out troops or weapons deliveries, he has
also recognized Russia as the aggressor in the war. The diplomats said they
hoped he could be motivated by the desire to have frozen EU funds for Hungary
released.
Another potential carrot: Hungary has applied for €16 billion in loans from the
EU’s SAFE program, which provides cheap money to countries buying weapons in
bulk. The European Commission has yet to approve its application.
If Orbán defies the polls and wins the election, the EU is hoping that he will
step out of the way because he will no longer need to whip up anti-Ukrainian
sentiment to win over voters, three of the diplomats said.
Brussels views Slovakia’s Fico, who has teamed up with Orbán to block the loan,
as less of an obstacle, two other EU officials said. Fico on Sunday vowed to
block the loan unless the Druzhba pipeline is repaired, even if Orbán loses the
election.
Fico met with European Commission President Ursula von der Leyen in Paris on
Tuesday on the sidelines of a Nuclear Energy Summit, and appeared to backtrack
from his combative position. In a video on social media, he said the two had
“discussed the need to restore the transit of Russian oil through Ukrainian
territory to Slovakia,” adding: “I am glad that on this issue, we share the same
view with the European Commission.”
An EU official said when it comes to convincing Fico to play ball, “we’re
getting there.”
Gabriel Gavin and Esther Webber contributed reporting.
Tag - transports
A Brussels court ruled Thursday that the Flemish government must immediately
block transit to Israel of all goods that can be used in military equipment.
The decision represents a victory for four NGOs that accused the Flemish
government of failing to meet its obligations under international law when it
comes to the transfer of military gear from various originating countries
through the port of Antwerp.
The NGOs — Vredesactie, INTAL, 11.11.11 and the Human Rights League — took
action after a container with tapered roller bearings, headed to Israeli defense
company Ashot Ashkelon, was intercepted in the port for inspection.
According to the NGOs, the Israeli army uses the bearings for the production of
Merkava tanks and Namer armored vehicles, which are being deployed in Gaza where
Israel has been waging war on Hamas militants while besieging the coastal
enclave, sparking a dire humanitarian situation.
The court ultimately banned the shipment of dual-use goods from leaving and said
the Flemish government must “stop all transit to Israel of defense-related
products and other materials usable for military purposes for which there is no
concrete assurance that they are intended solely for civilian end-use.” The
Flemish government will face a €50,000 fine if it violates the court order.
POLITICO has contacted both the Flemish government and the Israeli government
for comment.
11.11.11, one of the NGOs involved, called the decision a landmark ruling.
“This historic decision recognizes the Flemish government’s heavy legal
responsibility for facilitating military missions in a state that commits war
crimes, even genocide. The Court affirms what politicians refuse to
acknowledge,” the organization said in a press release.
On Thursday, Israeli strikes hit the only Catholic church in Gaza, killing
people and injuring several others, according to the Latin Patriarchate of
Jerusalem. The death toll in the strip has surpassed 58,000, according to Gaza’s
Health Ministry.