EU prepares “plan B” as Hungary blocks € 500 mn of Ukraine aid

Hungary continues to block €500 million from a fund envisioned for long-term defense support for Ukraine. Hungary keeps blocking the allocation of funds for months because the Ukrainian National Agency for Corruption Prevention (NAZK) included the largest Hungarian bank - OTP Bank - in its list of war sponsors. Hungarian Foreign Minister Péter Szijjártó said this at a press conference in Brussels following a meeting of EU foreign ministers, Hirado reported. Szijjártó complained that Hungary was under "extreme pressure" to agree to the allocation of €500 million from "Of course, I didn't support this, because we still adhere to the position that until we get guarantees from the Ukrainian anti-corruption agency that OTP or any Hungarian company will not be included in the list of international sponsors of war on the basis of trumped-up charges, we cannot move forward on this issue," Szijjarto said. Szijjártó recalled that the mentioned €500 million do not go directly to Ukraine but to EU states to compensate for the supply of their weapons, so "no one is stopping anyone from supporting Ukraine." On 4 May 2023, the NAZK added Hungarian OTP Bank to the list of international war sponsors. The decision was made due to the position of the bank’s management to continue operations in Russia and the de facto recognition of the so-called Donetsk and Luhansk “republics,” Russia's puppet statelets in Ukraine. After Hungary started blocking the aid, NAZK temporarily removed OTP bank from the list, along with 5 Greek shipping companies, while negotiations were ongoing.

Ukraine removes Hungarian OTP bank from sanctions list, hoping to get military aid unblocked

Plan B for Ukraine

The EU countries are discussing the option of financing military assistance to Ukraine with the participation of not all member states, if the planned format through the European Peace Facility cannot be agreed. "There are proposals for countries that do not want to participate to refrain from doing so. This means that my and other participating countries will take on a greater burden. We, Lithuania, are ready for this... That is, it will not be 27 member states, but a smaller group of countries," explained Lithuanian Foreign Minister Gabrielius Landsbergis ahead of the EU Foreign Ministers meeting on Monday. In addition, in December, the EU will send to Kyiv a mission with a proposal for security commitments for Ukraine. "My deputy on security and defense issues will come to Ukraine with a presentation of proposals that member states are still discussing," EU High Representative for Foreign Affairs Josep Borrell said following the meeting of the EU Council of Foreign Ministers. The idea of EU's long-term security commitments to Ukraine was first floated on 30 June 2023, when EU leaders decided to support Ukraine for “as long as it takes” at a European Council summit. The idea was further developed at a European Council meeting on 27 October, when member states committed to developing the EU's " future security commitments" to Ukraine.

Hiccups in the €20 billion fund for military aid to Ukraine

In October, Euractiv reported, citing sources in EU circles, that negotiations on a special fund within the European Peace Facility worth €20 billion to help Ukraine were being delayed, and the EU did not expect a decision to be agreed upon before the EU's multi-year budget is revised at the summit in December. In October, foreign ministers also failed to agree on the next 500 million of the European Peace Fund's existing funds. According to media reports, the decision was blocked by Hungary. Hungarian Prime Minister Viktor Orban later said that he would like a Ukrainian delegation to visit Budapest before the EU decides on the next tranche of the European Peace Fund for military aid to Ukraine. Josep Borrell has previously spoken about plans to allocate the €20 billion for the European Peace Fund as part of these "security guarantees." However, according to media reports, his intentions were met with resistance from some EU countries and may not be realized in their current form.