Ukraine, EU seeks agreement on aid to Kiev: Orban obstacle

In tomorrow’s Council, the European Union is aiming for an agreement between the 27 members: Hungary is an unknown

The Orban obstacle between the EU and aid to Ukraine. A 27-party agreement on the mid-term review of the European Union’s Multiannual Financial Framework 2021-27 (MFF or MFF) “is not yet there”. Viktor Orban’s Hungary is still blocking the agreement between EU leaders on the revision, whose ‘main dish’ is 50 billion euros in aid to Ukraine (33 billion in loans and 17 billion in non-repayable grants) for a long time term, the macro financial assistance necessary to ensure the functioning of the State, engaged in an exhausting defensive war against Russia.

The extraordinary European Council is convened for tomorrow in Brussels, to try to find an agreement, after in the December summit the Hungarian prime minister, by leaving the room, had allowed his colleagues to give the green light, to 26, to the accession negotiations with Ukraine and Moldova.

This time however, explains a European diplomatic source, it will not be enough for Orban, who is now the oldest member of the European Council (he has been prime minister since May 2010), to leave the room for a coffee: while in December it was “a political decision “, in this case it is a “legal issue and unanimity is needed at 27“. To be adopted, the revision of the MFF requires the unanimity of the Council and the approval of Parliament. There is also a problem of time, because Kiev risks going into default, without financial support: “The aid to Ukraine cannot wait”, says the source, because if European aid does not arrive “from March they will start to find themselves in difficulty”.

Aid to Ukraine, what’s waiting for Kiev

The negotiating box for the revision of the MFF approved in December provides for an additional financial envelope of 64.6 billion euros, which should be spent on new priorities: in addition to the 50 billion euros for the instrument for Ukraine, it provides 2 billion for migration and border management, €7.6 billion for Neighborhood and Global, €1.5 billion for the European Defense Fund under the new Step Facility, €2 billion for the Step Facility of flexibility, 1.5 billion euros for the solidarity and aid reserve.

A senior EU official explains that “naturally” there is a “plan”, only to note that Orban has blocked other dossiers in the past, such as sanctions against Russia: “He says no, no, no, then moves on,” he observes. The priority is to seek an agreement at 27, because finding one at 26, outside the MFF, would be “complicated”, although not impossible. Hungary has asked to be able to approve the annual budget as well, not just the MFF, unanimously (the annual one requires a qualified majority, while the MFF, which sets the spending ceiling, requires a unanimous vote), in so you can block it every year in case of disagreement. The other countries said no, because “certainty is needed” to plan expenses.

A possible solution, explains a diplomatic source, could be to commit to discussing the EU’s annual budget every year in the European Council, whose conclusions require unanimity. In this way, Hungary could block the conclusions (but without necessarily blocking the budget). It is a question of understanding whether Orban poses a technical problem (he said he wants assistance to Ukraine to be on a bilateral basis, provided individually by each member state), or a political one: “You can always find technical solutions to technical problems – he observes a European diplomatic source – but political solutions to political problems cannot always be found.”

Negotiations with Budapest “are intensifying – explains a senior EU official – but we are not there yet. I don’t know if we will succeed.” Even for a diplomat “a result of 27 is not guaranteed”, so it is not certain that the summit will not fail, as happened in February 2020, when a European Council convened to agree on the Mff 2021- 27 failed, just as the alleged ‘patient zero’ from Covid-19 was identified in the Lodi area (the MFF was then approved in July, together with Next Generation Eu). “If there isn’t an agreement at 27, it won’t be possible to say that the summit ended with a success”, acknowledges a diplomatic source.

The publication in the Financial Times of a document from the Council secretariat which predicted big trouble for the Hungarian economy in the event of a failure to reach an agreement at 27 does not seem to have helped to unblock the situation. “It wasn’t a very good idea”, according to a diplomatic source, because it would have allowed Orban to corroborate his thesis about “blackmail” by Brussels towards Hungary. In addition to the mid-term review of the MFF, which is the main focus of the Council, two leaders’ discussions are also planned, one on military aid to Ukraine and the other on the Middle East.

The latter also includes the naval mission between the Suez Canal and the Strait of Hormuz, which will be on the table of the Defense Ministers in tomorrow’s informal Council at the Palais d’Egmont, under the Belgian presidency: “I expect that the issue must be addressed” also at leader level, says a senior EU official. The extraordinary European Council, which will begin around 10 in the morning, will be preceded this evening by an informal dinner among the leaders in the Council headquarters, in which the Heads of State and Government will have the opportunity to speak to each other bilaterally. Even before that, at 5pm, a commemoration of the former president Jacques Delors, who recently passed away, will be held at Palazzo Berlaymont, headquarters of the Commission. Several heads of state and government and other personalities will also participate.

It is not expected, at least for now, that the Council will deal with the farmers’ claims: French President Emmanuel Macron will discuss it bilaterally with the President of the Commission Ursula von der Leyen, but he has no intention of raising the issue at the summit, also because he does not has been adequately prepared. Belgian farmers, however, are also on a ‘war footing’: today over 300 tractors invaded Namur, the capital of Wallonia; Access to the port of Zeebrugge, an important port on the North Sea and the largest EU terminal for liquefied natural gas, is blocked. Therefore, it cannot be ruled out that the topic will be raised at the summit by Belgian Prime Minister Alexander De Croo.