Hungary blocks 'Plan B' for reparation loan to Ukraine - Politico
Photo: Viktor Orban (Getty Images)
Budapest’s stance has increased pressure on EU negotiations, where member states are still seeking a unified solution for financing aid to Ukraine and agreeing on a mechanism for using frozen Russian assets, according to Politico.
Prime Minister Viktor Orban’s refusal to support the issuance of joint EU bonds has heightened tensions around the proposed loan mechanism that EU leaders aim to finalise in the coming weeks.
This move has complicated preparations for an alternative source of financing in case the EU fails to use frozen Russian state assets to cover part of the large-scale loan for Ukraine.
Hungary's stance and EU reactions
According to reports, Hungary has ruled out its participation in issuing eurobonds, which were considered a backup option for raising 165 billion euros.
Because the decision requires unanimity, Budapest’s refusal has increased pressure on the negotiations. The announcement came ahead of a meeting between German Chancellor Friedrich Merz and Belgian Prime Minister Bart De Wever, focused on finding a compromise on frozen assets.
Merz stressed, "I take the Belgian prime minister’s concerns and objections very seriously. I don’t want to persuade him, I want to convince him of the correctness of the approach we are proposing."
Germany is prepared to guarantee repayment of 25% of the funds, but Brussels is demanding broader insurance mechanisms from all EU member states.
Two European Commission options and next steps
The Commission presented two instruments: issuing eurobonds and a loan backed by Russian assets. Both options are meant to prevent a drop in Ukraine’s reserves in spring 2025. Brussels says the proposed package takes into account the key risks and concerns raised by Belgium.
EU financial package for Ukraine
The proposed reparation loan includes 115 billion euros to support Ukraine’s defence sector and 50 billion euros to stabilise the state budget.
Belgium, which holds a significant share of frozen Russian assets, fears possible legal consequences and has not yet supported the plan.
Polish President Karol Nawrocki stressed that no real agreements can be reached with Russia, noting that historical experience from the 19th to 21st centuries shows that Russian policy consistently aims at domination and destruction.
Ukrainian officials welcomed Polish President Karol Nawrocki’s decision to cancel a meeting with Hungarian Prime Minister Viktor Orban, who is an ally of Russian leader Vladimir Putin.
