EU hails “unity” in support for Ukraine with approval of €50bn
The money will help Ukraine cover a massive wartime deficit, but military aid is also needed
European Union leaders on Thursday overcame objections from Hungary to spend €50bn on Ukraine for the next four years.
EU leaders officially invited Ukraine to become an EU member in December, but Hungary vetoed the €50bn Ukraine Facility, saying it should not be grafted onto the EU multiannual budget.
It consists of €17bn in grants and €33 in loans, and is designed to help Ukraine rebuild and recover from the war, well as undertake reforms on its path to eventual EU membership.
“The EU showed commitment to the continuous support of Ukraine under difficult geopolitical and internal circumstances... and despite alleged public impatience with this support,” European Institute lecturer George Tzogopoulos said.
Ukraine’s deputy prime minister, Yuliya Svyridenko, wrote on Facebook that Ukraine had “come one step closer to economic stability for the next four years”.
Ukraine faces a $43bn budget deficit this year and expects the EU aid to cover just under half of it.
“This locks in steadfast, long-term, predictable funding for Ukraine. EU is taking leadership & responsibility in support for Ukraine; we know what is at stake,” wrote European Council president Charles Michel on X, formerly Twitter.
European Commission president Ursula von der Leyen called it “a good day for Europe”.
The agreement seemed to unite EU members that are rearming against Russia, like the Baltic States, and traditional EU heavyweights wary of alienating Russia.
“The EU stands behind you long-term, until victory,” wrote Estonian prime minister Kaja Kallas.
“Ukraine’s security is Europe’s security,” wrote Italian prime minister Roberta Metsola.
Leaders also agreed on an addition to the EU budget of €2bn for border security, €7.6bn for regional aid and €1.5bn for the European Defence Fund.
A new naval victory
The news of Ukraine’s funding agreement came just as Ukraine, desperate to show that Western money is helping it win the war, scored a new victory in the Black Sea.
Footage released by its armed forces showed surface drones repeatedly striking the Ivanovets, a 480 tonne missile corvette, crippling it and then destroying it completely. Footage sent by at least two of the drones as they approached the ship showed gaping holes in the hull from previous strikes. A distant shot shows a massive explosion suggesting the ship may have gone down with all hands. One shot shows the bows of the ship sticking out of the water, confirming it sank stern-first.
Ukraine has been attacking Russia’s Black Sea Fleet since the beginning of the war, and more intensively since last summer, to protect a safe corridor through which it exports its grain. Agricultural goods brought Ukraine more than $23bn last year, its agriculture ministry said.
Hungary’s beef with Ukraine
Key aspects of the deal remained murky. It appeared that leaders had not also approved a separate budget for military aid worth €20bn on this year, and it was unclear when this might happen. Nor was it clear if they had approved €5bn in military aid proposed by the EU’s foreign policy chief, Josep Borrell, last September.
And it wasn’t clear what concessions had been made to Hungary.
“We need to closely monitor the details of the compromise because the EU does not need to show that it accepted Orban’s demands, given how sensitive an issue the rule of law remains,” Tzogopoulos said.
EU leaders have suspended €20bn in support funds to Hungary over concerns about media freedom and rule of law in Hungary.
They had also suspended €10bn due to concerns about judicial independence, but released those last December. The European Parliament wants them to reconsider that decision.
In the days leading up to the summit the Commission had reportedly threatened to “sabotage” Hungary’s economy if it didn’t agree.
Hungary was also offered concessions, in the form of an opportunity to veto the Ukraine Facility next year, if Ukraine fails to live up to its conditions.
Those included upholding “effective democratic mechanisms”, such as multi-party parliamentary democracy, the rule of law and respect for minorities.
A 150,000-strong Hungarian minority had become a point of friction between Ukraine and Hungary in 2017 and 2019, when Ukraine passed laws forbidding the teaching of minority languages in schools and their use in local government.
“It was of course directed against the Russian language but… all minorities suffered,” Eastern Europe expert at the University of Helsinki Katalin Miklossy told Al Jazeera.
“Ukraine in 2023 backed off the minority laws as a favour to Hungary, to facilitate its application to the EU… they reframed the law so that it was again possible to study minority rights in schools,” said Miklossy.
Romania also protested against the laws, because it has a minority of slightly over 100,000 in Ukraine. But Romania’s overall reaction to Ukraine has been entirely different to Hungary’s. It has been a major export route for Ukrainian grain, both by sea and through the Danube River. Whereas Hungary has refused to contribute weapons to Ukraine or to allow them to pass through its territory, Romania has sent weapons to Ukraine and been a conduit.
Hungary has been a fly in the ointment of EU foreign policy before. In early 2003, shortly after it secured EU membership, it sided with the US administration of George W Bush to back the Second Gulf War, against the EU consensus at the time. Poland and the Czech Republic did the same, but they have fully backed EU and US policy in Ukraine.
Individual EU members retain the right to veto budgetary and foreign policy decisions, which require unanimity. Attempts to introduce qualified majority voting for them failed at an EU summit in 2002, and in French and Dutch referenda in 2005.