Hungary blocks €90bn loan for Ukraine – FT
Days before the fourth anniversary of Russia's invasion, Hungary has blocked a €90 billion EU loan for Ukraine that is intended to support the war-torn country's financial stability.
Source: Financial Times (FT)
Details: Four people familiar with the matter told the FT that Hungary's EU ambassador objected on Friday to the Union borrowing funds for Ukraine by issuing debt backed by the EU budget. The decision requires unanimous approval from all 27 member states.
EU leaders approved the loan in December to help Kyiv ahead of a looming budget deficit in April. Hungary, Slovakia and Czechia agreed to support Ukraine only if they were exempt from interest and repayment obligations, leaving the remaining 24 EU countries to shoulder the costs.
However, unanimity is necessary for the European Commission to use the EU budget reserve for borrowing and on-lending to Ukraine.
Hungary's veto could jeopardise an €8 billion International Monetary Fund programme that is currently being negotiated and is tied to Kyiv securing the EU loan. The fourth anniversary of Russia's full-scale invasion of Ukraine is on Tuesday 24 February.
Budapest's decision to block the loan comes as the country prepares for April elections that could unseat Prime Minister Viktor Orbán, a long-time critic of Brussels and ally of Russian leader Vladimir Putin. According to polls, the opposition Tisza party led by Péter Magyar is about 10 percentage points ahead of Orbán's Fidesz party.
Background:
- In December 2025, the European Commission proposed an unprecedented use of frozen Russian assets or international loans to finance Ukraine's military and essential needs during its war with Russia.
- Seven EU leaders sent a letter to European Commission President Ursula von der Leyen and European Council President António Costa, urging them to use frozen Russian assets to provide Ukraine with a "reparations loan".
- In December, Politico reported that the EU was considering a tougher approach towards Belgium, which had opposed granting Ukraine a "reparations loan" backed by frozen Russian assets. European officials were not ruling out the possibility of bypassing the Belgian government led by Bart De Wever.
- Russia's Central Bank said the EU's plans to use Russian assets were illegal and that it reserved the right to use all available means to defend its interests.
- It was reported that the European Commission had proposed splitting the "reparations loan" into two streams of support for Ukraine: funding for arms production and procurement, and budgetary support. The budgetary component would amount to €90 billion and be provided over a two-year period.
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