The EU plans to undermine the economy of Hungary, one of the EU member states, by cutting off its funding if Budapest blocks €50 billion in financial aid to Ukraine at an emergency summit of EU leaders on 1 February 2024, according to the Financial Times.
Hungary’s prime minister, Viktor Orbán, has vowed to oppose the allocation of funds from the EU budget for the Ukraine package, which is meant to support Kyiv against Russia’s full-scale invasion.
According to a confidential plan drawn up by Brussels that marks a significant escalation in the struggle between the EU and Hungary, its most pro-Russian member state, the EU may exploit Hungary’s economic vulnerabilities and dependency on EU funding to convince the Hungarian Prime Minister not to veto financial support for Ukraine, the Financial Times reported. Three unnamed EU diplomats told the Financial Times that many EU countries backed the plan.
“Brussels has outlined a strategy to explicitly target Hungary’s economic weaknesses, imperil its currency and drive a collapse in investor confidence in a bid to hurt jobs and growth if Budapest refuses to lift its veto against the aid to Kyiv, the Financial Times reported.
According to the Financial Times, the plan also suggests that other EU leaders should publicly declare their intention to isolate Hungary if it does not back down. If Viktor Orbán refuses to reach a compromise on financial support for Ukraine from the EU budget, other EU leaders may consider publicly vowing “to permanently shut off all EU funding to Budapest with the intention of spooking the markets, precipitating a run on the country’s forint currency and a surge in the cost of its borrowing,” Brussels stated in the document, according to the Financial Times.
“This is Europe telling Viktor Orbán ‘enough is enough; it’s time to get in line. You may have a pistol, but we have the bazooka’,” Mujtaba Rahman, Europe director at Eurasia Group consultancy told the Financial Times.
According to the Financial Times, in case Hungary blocks the agreement on the Ukraine aid at the EU summit on 1 February, other EU leaders may publicly declare that “in the light of the unconstructive behavior of the Hungarian prime minister,” they cannot agree to provide EU funds to Hungary anymore.
Without the EU funding, financial markets and European and international companies might be less interested in investing in Hungary, which will drop the Hungarian national currency, the Financial Times stated based on the confidential document drawn up by Brussels.
Hungary’s EU minister, János Bóka, told the Financial Times that Budapest was unaware of the financial threat and “did not give in to pressure.” He also said Hungary sent a new proposal to Brussels, offering “some concessions” concerning the EU financial aid to Ukraine.
A spokesperson for the Council of the EU refused to comment to the Financial Times on the leaks.