The European Commission is laying the technical and legal groundwork to make the first payment to Ukraine under the €90 billion loan as soon as Hungary lifts its veto, hoping to shield the country’s war-battered budget from painful cuts.
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Hungarian Prime Minister Orbán is blocking the financial lifeline over an unrelated dispute with Ukraine regarding the Druzhba oil pipeline. Kyiv says the infrastructure is badly damaged and needs to be repaired after a Russian drone attack, while Budapest says it is deliberately shut down to influence the outcome of the elections on April 12.
In Brussels, officials expect the veto to last until at least after the elections, given that Orbán has made opposition to Ukraine a central issue in his hard-hitting campaign. The incumbent trails his younger rival, Péter Magyar, by double digits in opinion polls.
In the meantime, the Commission intends to put in place all the necessary elements to start disbursements under the €90 billion loan immediately after the dispute is resolved.
The executive unveiled on Wednesday the first of four documents that underpin the assistance program, with the other three expected in the coming days.
The allocation for 2026 will be €45 billion, with €16.7 billion for financial support and €28.3 billion for military support. Expenses for drones will be saved from the “Made in Europe” criterion to help Ukraine secure low-cost components worldwide.
The remaining €45 billion will be allocated for 2027, even if disbursements could continue beyond the cut-off date.
“We will deliver on the €90 billion loan to Ukraine,” Commission President Ursula von der Leyen said in a statement. “We remain fully and firmly behind the brave people of Ukraine and their fight for freedom.”
All four documents have to be finalized before the first payment can be made. The internal process is expected to go smoothly because Hungary, Slovakia and the Czech Republic secured an opt-out from the loan and are therefore excluded from voting.
The main obstacle remains a separate regulation amending the bloc’s common budget to allow joint borrowing for a non-EU country. This is the piece of the complex puzzle that Hungary is blocking because it is the only one that depends on inanimity.
The veto is widely considered a violation of the agreement that the 27 leaders, including Orbán, reached in a make-or-break summit in December.
“We expect all the 27 member states to live up to this commitment,” a Commission spokesman said on Wednesday. “Not respecting this commitment would indeed constitute a breach of the principle of loyal cooperation.”
The day after the elections
EU officials are considering several scenarios for the day after the elections.
If Magyar wins, Brussels hopes the veto will be quickly lifted. If Orbán wins, he could either relent or dig in his heels. The prime minister has vowed to obstruct the loan until oil flows resume through Druzhba. “No oil, no money,” he said earlier this month.
Should the veto be lifted, either by Magyar or Orbán, the first payment to Ukraine could happen in just a few days because the Commission has a reserve of borrowed cash at hand. What is missing is the legal blessing to make the transfer to Kyiv.
“Once we have all the relevant elements in place, we can draw on the funds that we have in our liquidity pool and make the first disbursement,” the spokesperson explained. “So this is really not going to hold up the procedure.”
However, if the veto is not lifted after the elections, alarm bells will start ringing loudly.
Under current spending levels, Ukraine could run out of foreign assistance by mid-May and be forced to make painful cuts to its public services. The country also needs a fresh injection of money to ramp up its domestic production of weapons and drones.
On Tuesday, Ukrainian President Volodymyr Zelenskyy said the political impasse had already delayed a plan to prepare the country for the next winter.
“As long as the blockage remains, the threat remains. And this is happening because one person in Europe is standing against all of Europe – simply to please Moscow,” Zelenskyy said, talking about Orbán but without mentioning his name.
“Everyone can already see the evidence: that this is nothing more than a deal with Moscow,” he added, seemingly referring to media revelations of private conversations between the foreign ministers of Hungary and Russia.
That same day, High Representative Kaja Kallas, who met Zelenskyy in Kyiv, floated the possibility of reviving a highly innovative proposal to tap into Russia’s immobilized assets if the veto on the €90 billion loan proves insurmountable. But the proposal, which fell apart last year, remains marred by legal, financial and reputational concerns.