08:26 13 Dec 2022

EU compromises with Hungary to unlock 18-bln aid package for Ukraine

Brussels made concessions to remove Budapest's veto on some critical issues, including 18-billion macro-financial aid for Ukraine, and will unfreeze part of the funds allocated for Hungary.

Reuters reports that the ambassadors of the European Union unanimously approved the decision to provide Ukraine with 18 billion euros of macro-financial assistance.

The publication reports that "the complex deal, which came after months of wrangling between EU institutions, governments, and Hungary, means Ukraine will get 18 billion euros from the EU budget next year in stable and predictable financing that will allow Kyiv to plan ahead."

Reaching an agreement on this package in this format was in question until the end, mainly because of Hungary's position.

Budapest also agreed to lift its veto on a global minimum corporate tax of 15% agreed upon by the Organization for Economic Co-operation and Development.

Viktor Orban formally stated that Budapest was against the joint provision of funds from the bloc. Therefore, Brussels began to prepare a "plan B" so that Ukraine could still receive these funds without the consent of Hungary. It included the provision of funds through individual guarantees of 26 member states instead of a pan-European warranty.

They wanted to avoid this and not demonstrate differences in the EU regarding support for Ukraine.

In return, the EU will also approve Hungary's plan for how to spend €5.8 billion of the bloc's recovery funds. It should be noted that the money will not arrive until Budapest fulfills numerous additional conditions.

"But the approval, due by the end of 2022, means the money will not be irrevocably lost, as it would be otherwise," the publication emphasizes.

EU governments also agreed to cut from 7.5 to 6.3 billion euros in EU funds for Hungary, which the European Commission wanted to freeze because of Budapest's rule of law problems.

Earlier, the European Commission confirmed again that the recent changes aimed at improving anti-corruption guarantees in Hungary did not eliminate concerns about the state of democracy in the country and will not be the basis for transferring 13.3 billion euros to it.

Hungarian Prime Minister Viktor Orbán opposed implementing the ninth sanctions package against russia.

Hungary's policy is generating calls within the European Union to move away from the principle of unanimity for approval of decisions.

It should be noted that the agreement looks like a victory for Hungarian Prime Minister Viktor Orbán, who for months hoped to get funds thanks to the possibility of favorable decisions at the EU level, which are adopted unanimously.

Also, the desire of the EU countries, against the background of the russian federation's war against Ukraine, to maintain the appearance that the countries "speak with one voice" could have played in favor of such a compromise.

However, the question remains whether Hungary can fulfill the 27 conditions for receiving the money and whether what has been done will be considered sufficient.

On December 10, the Council of the EU approved allocating 18 billion macro-financial aid to Ukraine for its support in war conditions during 2023. The proposal of the European Commission was agreed upon through a written procedure and will be submitted to the European Parliament for consideration and approval on Tuesday.


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