E.U.

Reaches Deal on Fund for Ukraine

The Hungarian leader, Viktor Orban, had been the sole holdout to the 50-billion-euro plan aimed at keeping Ukraine’s economy
afloat during the war with Russia.

By Matina Stevis-Gridneff and Monika Pronczuk

Reporting from Brussels
Feb. 1, 2024 Updated 11:43 a.m. ET

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After weeks of standoff, European Union leaders brought Prime Minister Viktor Orban of Hungary on board and agreed on Thursday
to create a 50-billion-euro fund for Ukraine, providing a critical lifeline to a country at risk of financial meltdown in the midst of war
with Russia.

The breakthrough was an especially significant one for both Ukraine and the European Union. For Ukraine, which desperately needs
the money to keep basic services running, it offered stability and assurance as American aid is held up in Congress.

For the E.U., it demonstrated European resolve to stand united in support of Ukraine against Russia, even if the United States
wobbles, as well as a determination to bring an often obstructionist Mr. Orban to heel.

Small as his country is, the Hungarian leader has made himself a big antagonist against E.U. rules and norms, drawing both rebukes
and monetary punishments from his partners. Mr. Orban has also been an outsized obstacle to many of Europe’s ambitions, including
some sanctions against Russia and even Sweden’s bid to join the NATO alliance.

He has repeatedly used the E.U. requirement for unanimity to push Brussels for concessions, including the unfreezing of money that
has been withheld to prod him to make democratic reforms.

Before Thursday’s meeting, Mr. Orban had been demanding an annual chance to veto the disbursement of money to Ukraine, which is
to be dispensed in the form of loans and grants over the next four years. But that demand was rejected. Instead, leaders agreed to a
regular review of the way the money was being spent to assuage concerns about diversion or corruption, E.U. officials said.

Under the agreement reached on Thursday, the European Commission, the E.U. executive arm, will draft an annual report on how the
Ukraine fund is being used. European leaders will have a chance to debate its performance and raise any concerns about it.

The European Parliament needs to approve the fund by simple majority, a bar that should be easily cleared, and the vote could take
place as early as this month.

It appeared that Mr. Orban did not receive anything material in exchange for giving up his veto for the fund, valued at about $54
billion.

“All 27 leaders agreed on an additional €50 billion support package for Ukraine within the EU budget,” the president of the European
Council, Charles Michel, said on social media just an hour into Thursday’s meeting. “This locks in steadfast, long-term, predictable
funding,” he added. “EU is taking leadership & responsibility in support for Ukraine; we know what is at stake.”

Talks had been gridlocked, and the mood toward Mr. Orban, the closest ally in the European Union of the Russian president, Vladimir
V. Putin, had been souring since Mr. Orban blocked the first attempt to introduce the fund for Ukraine in December.
 Prime Minister Viktor Orban of Hungary in Brussels on Thursday. He appeared to
receive little in return for giving up his veto. Ludovic Marin/Agence France-Presse — Getty
Images

Mr. Orban’s long-term obstruction of the European Union’s support of Ukraine has been riling his European partners. He has held up
or watered down support for Ukraine, including some sanctions against Russia, since the war began.

The Hungarian leader, who appears to relish his spoiler role, has claimed that his resistance comes down to a fundamental
disagreement with other European leaders: He does not believe Russia poses a security threat to Europe, nor does he think that the
European Union should be throwing its weight behind Ukraine.

But Mr. Orban regularly uses his levers within the bloc — often his ability to veto decisions that require unanimity, such as the
introduction of the Ukraine fund — to push for funds that he has lost access to over a longstanding dispute with the commission over
his domestic policies.

The European Union and Hungary have long clashed over policies on the rule of law, corruption and minority rights.

The commission has taken Hungary to task over, among other issues, the hijacking of judicial appointments, which it says interferes
with the courts’ independence; laws that discriminate against L.G.B.T.Q. people; and the defanging of anticorruption authorities.

The commission has blocked Hungary from gaining access to some €20 billion until it can demonstrate that it has altered those
policies to bring them in line with E.U. rules and values.

If Mr. Orban’s demand for an annual veto for the Ukraine fund was a play to get access to more funding, it failed.

Officials on Thursday said that he had only managed to extract a vague reference in the joint conclusions that leaders would issue at
the end of their summit on Thursday. That reference would urge the European Commission to be “proportionate” in the way it froze
funding for member states it punishes for violations, as is the case with Hungary.

The swift decision on Thursday was welcomed with relief by some E.U. leaders weary of the endless fights with Mr. Orban and eager
to avoid another showdown that would harm the appearance of unity toward Ukraine.

Shortly after the agreement was announced, Prime Minister Mark Rutte of the Netherlands wrote on social media: “I’m delighted
that we have reached agreement on support for Ukraine. This 50 billion euro package will help us achieve more structure,
transparency and predictability in our financial aid to Ukraine.”

The message was clear, he added: “Ukraine can count on our support, both now and in the future.”

The news was warmly welcomed in Ukraine.

“It is very important that the decision was made by all 27 leaders, which once again proves strong EU unity,” President Volodymyr
Zelensky of Ukraine wrote on social media. “Continued EU financial support for Ukraine will strengthen long-term economic and
financial stability, which is no less important than military assistance and sanctions pressure on Russia.”

Matina Stevis-Gridneff is the Brussels bureau chief for The Times, leading coverage of the European Union. More about Matina Stevis-Gridneff

Monika Pronczuk is a reporter based in Brussels. She joined The Times in 2020. More about Monika Pronczuk