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EU unblocks 10 billion euros for Hungary, but Orban's support for Ukraine still unclear

by Alexander Query December 13, 2023 8:22 PM 11 min read
Ukrainian President Volodymyr Zelensky (L) near Hungarian Prime Minister Viktor Orban (R) about Ukraine's aspirations to join the EU during the inauguration of Argentinian president-elect Javier Milei in Buenos Aires on Dec. 10, 2023. (Fernando Gens/picture alliance via Getty Images)
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The EU Commission unlocked 10.2 billion euros ($11 billion) in frozen funds to Hungary ahead of the EU’s final summit on Dec. 14-15 where the bloc will decide on 50 billion euros in financial assistance to Ukraine and whether to open negotiations with Kyiv on EU accession.

In the months leading up to the summit, Hungarian leader Viktor Orban had repeatedly threatened to block both decisions, using the blocked EU funding — which totals 30 billion euros withheld over Hungary’s democratic backsliding in recent years — as leverage in the upcoming votes on support for Ukraine.

The EU Commission said that Hungary had fulfilled a specific set of judiciary reforms necessary to access the 10 billion euros in funding.

“After a thorough assessment, and several exchanges with the Hungarian government, the Commission considers that Hungary has taken the measures it committed to take,” allowing the EU’s executive to free up the funds, the Commission said in a press release.

“Overall, the funding that remains locked for Hungary amounts to around 21 billion euros,” the Commission said.

Several European lawmakers have decried the move. German Green MEP Daniel Freund said in a statement that “by releasing 10 billion euros to Orban, (European Commission Ursula) von der Leyen is making the biggest mistake of her time in office,” the Guardian reported.

Finnish lawmaker Petri Sarvamaa, the center-right European People’s Party group’s spokesperson for budget issues, called the European Commission’s move a “catastrophic decision.”

It remains unclear if Hungary is ready to vote for additional financing for Ukraine and its EU accession. The country wanted the total sum in exchange for supporting Ukraine’s accession talks, Orban’s political director told Bloomberg on Dec. 12.

Orban has also consistently said he is not ready to back Ukraine’s EU accession.

The Hungarian leader has claimed that Ukraine isn’t ready to join the EU, despite the European Commission announcement on Nov. 8 that Ukraine was ready for talks to begin.

He has also used the pretext that Ukraine is infringing upon the rights of its Hungarian minority to stymie Kyiv’s EU aspirations.

Orban's plans go further than extortion, Daniel Hegedus, a senior fellow expert on Central and Eastern Europe from the German Marshall Fund think tank, told the Kyiv Independent.

His master plan is to sabotage Ukraine because its successes could challenge Orban’s autocratic rule.

“If Ukraine can be successful in being democratic and Western-orientated, it will shed a critical light on Orban's eastern-oriented and authoritarian project,” he said.

A billboard showing European Commission President Ursula von der Leyen and Alexander Soros, son of Hungarian-US billionaire George Soros, with the lettering "Let's not dance to their tunes! National consultation," in Budapest, Hungary, on Nov. 22, 2023. (Photo by Attila Kisbedenek /AFP via Getty Images)

Blackmail tactic

Orban has a long history of opposing the EU’s policies to blackmail the bloc’s institutions.

“His strategy is to show that the EU is powerless,” political expert Ramona Coman told the Kyiv Independent.

The EU had blocked a total of over 30 billion euros between the EU Cohesion Policy fund, worth 22 billion euros, more than 6 billion euros in funding, and almost 6 billion euros in grants for Covid recovery.

Budapest wanted the total in exchange for unblocking help for Ukraine, but Hungary has only made cosmetic changes, Coman said, quoting the Hungarian Helsinki Committee, an NGO that regularly denounces Orban’s grip on the country.

Bloomberg: Orban may unblock Ukraine aid package in exchange for release of EU funds for Hungary
Hungary is open to unblocking a huge EU funding package for Ukraine in exchange for the release of EU funding for Budapest, Hungarian Prime Minister Viktor Orban’s political advisor told Bloomberg on Dec. 12.

In 2011, Orban passed a new constitution, eliminating the system of checks and balances by curbing the powers of the top court in budget and tax matters, as well as allowing the president to dissolve parliament if a budget is not approved.

The new constitution allowed Orban’s party Fidesz appointees to control key public institutions such as the budget supervisory Fiscal Council.

The powers of the constitutional court, the most important counterweight of the government, were curtailed, while the new constitution created institutions to limit the power of judges and their independence.  

Politically controlled oligarchs also took over a large part of Hungary’s economy, Hegedus said, while the government muzzled the media, according to the International Press Institute.

Orban was recently accused of passing a law to silence critical voices, creating a “sovereignty protection office” investigating “foreign influence” in advocacy activities, activities aimed at influencing democratic debate, and organizations that use foreign funding to influence voters.

He said in a speech that “dark forces” were undermining the country’s sovereignty to justify the law, but critics said he was using fear-mongering rhetoric ahead of EU elections and municipal voting in the country next year.

The long-term solution would be suspending Hungary's voting rights in the EU Council, Hegedus said. “It should have been done at least a decade ago,” he said.

However, EU member states always wanted to avoid conflict, so they tried to compromise with Orban, which ultimately empowered him.

“He saw that this extortion strategy was successful, so he came back for more,” Hegedus said.

Prime Minister of Hungary Viktor Orban talks to the press before the European Council, the EU leaders meeting at the headquarters of the European Union, on Oct. 26, 2023 (Nicolas Economou/NurPhoto via Getty Images)

Powerful veto

Kyiv desperately needs financial support from its Western allies in the face of renewed Russian offensives. The country’s survival depends on the bloc’s 50 billion euro financial aid, part of the bloc’s budget review in the summit’s agenda.

If Orban vetoes the help for Ukraine, the bloc could allocate a smaller amount to cover a shorter period, or the other 26 EU countries could extend their national contributions bilaterally to Kyiv, anonymous sources told Reuters.

The EU Council’s agenda includes the start of Ukraine’s official membership negotiations, which Orban appears hell-bent on derailing.

Orban said on Nov. 18 that he believes that talks would be a mistake because Ukraine is "light years away" from being ready for membership.

Unanimous approval of all 27 members is required, which means Orban has a powerful veto that allows him to paralyze the entire bloc’s decision-making process. The EU will not be able to circumvent this veto, experts said.

“Blocking the start of the accession negotiations is such a valuable bargaining chip that I don't see why he would give it up,” Hegedus said.

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If the EU Council doesn’t vote to approve the beginning of accession talks, there will be "devastating consequences" for the country, Foreign Minister Dmytro Kuleba said on Dec. 11.

Kuleba met his Hungarian counterpart, Peter Szijjarto, in person for the first time since the start of Russia's full-scale invasion on Dec. 11 to try and convey the message in a “sincere conversation.”

Kuleba said on air on Dec. 12 that after the conversation, Hungary’s foreign minister had “clearly removed the threat that Hungary opposes Ukraine's membership in the EU in principle.”

Szijjarto appeared to be less certain after the meeting, saying, “The European Commission has almost no idea what effect Ukraine's membership in the EU will have on the entire association.”

Hungary’s final decision will stay unclear until the EU Council vote.

Still, Hegedus believes those meetings need to continue. It creates a situation where the Hungarian government has to explain its position and make it obvious how ridiculous its arguments are, he said.

“If you want to make Orban uncomfortable, don't blame Hungary, blame him, and insist that you know it's not the collective decision of the Hungarian people.”

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False claims

Hungary has kept pushing unfounded claims to justify its opposition to the EU’s support for Ukraine.

Budapest has repeatedly accused Kyiv of oppressing the rights of Hungarian minorities living in western Ukraine after a language law was passed in 2017, calling Kyiv's language policies discriminatory.  

Kyiv argued that it did not intend to crack down on its minorities but to ensure that every Ukrainian citizen has sufficient knowledge of Ukraine's official language.

Ukraine's parliament adopted on Dec. 8 an updated draft law on national minorities, thwarting Orban’s argument.

“It was the right move because it made clear that the Hungarian approach was a pretext,” Hegedus said.

The updated law allows schools in Hungarian-speaking areas to teach all classes in Hungarian except Ukrainian language, literature, and history.

After the law passed, the leaders of the Hungarian community in Ukraine wrote a letter calling Orban not to block the launch of Ukraine's EU accession.

"The new draft law adopted by the Ukrainian parliament significantly reflects the interests of national minorities and enjoys our full support," the representatives said.

"We believe that Ukraine deserves to be supported in its efforts in this direction."

Orban answered in a letter saying he would “do everything in his power to protect the rights of the Hungarian community in Ukraine,” suggesting instead of membership a strategic partnership.

Orban responds to Hungarians in Ukraine, offers substitute to EU membership
In his letter, Orban vowed that Hungary “will do everything in its power to protect the rights of the Hungarian community in Ukraine,” the Hungarian news portal reported.

For years, Orban’s government poured money into the local ethnic Hungarian community in Zakarpattia, a region in western Ukraine bordering Hungary, and gave them passports, an illegal procedure in Ukraine.

The move sparked Ukraine’s anger as it echoed the Kremlin’s forced passportization in occupied territories since 2014.

Hungary has also blocked 500 million euros in aid to compensate EU states for the weapons they sent to Ukraine. A key friction point was Ukraine placing Hungary's largest bank, OTP Bank, on the list of "war sponsors."  

While Ukraine bowed to Hungary's demands to take the OTP Bank off that list, Budapest continued to block the 500 million euro tranche, saying Kyiv had not guaranteed it wouldn’t happen again.

Russian President Vladimir Putin shakes hands with Hungary's Prime Minister Viktor Orban during their meeting at the Kremlin in Moscow on July 15, 2018. (Yuri Kadobnov/AFP Pool/AFP via Getty Images)

Putin’s ally

Orban has recently called Ukraine “one of the most corrupt countries in the world” without evidence, parroting the pro-Russian narrative depicting Ukraine as a failed state.

Hungary itself, however, has the worst public sector corruption record in the EU, according to Transparency International’s January report.

Meanwhile, Orban maintains close ties with the Kremlin while calling for an end to Russian sanctions and a ceasefire. He was the only EU leader to travel to China in October, where he met with Russian President Vladimir Putin.

“For Orban, Ukraine is an artificial state,” Dmytro Tuzhanskyi, director of the Institute for Central European Strategy, a Ukrainian think tank, told the Kyiv Independent.

“He has no clue about Ukraine, only a Russian narrative.”

However, his alignment with Putin is mostly over an anti-West stance, Hegedus said.

“Orban is not an ideologist, he's a political realist,” he said. “He believes in the demise of the West, but that's all.”

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Playing the long game

Orban is playing the long game ahead of 2024, according to political analysts.

Orban wants to receive guarantees that his authoritarian model based on corruption will stay untouched, according to Tuzhansky. “He wants to secure not just himself but also his power.”

Orban doesn’t plan on leaving the EU because he wants to change the bloc from the inside, Coman said.

He may also be betting on a right-wing shift in the EU elections in June 2024, with far-right parties and conservatives taking over enough seats in the EU Parliament to ensure support for his policies.

He’s also expecting former U.S. President Donald Trump to win the next U.S. Presidential elections in November 2024, an outcome dreaded in Kyiv over Trump’s ambiguous stance with Putin.

Some of Orban's allies were reportedly set to meet with U.S. Republicans in Washington for a closed-door meeting to lobby for the end of military aid to Ukraine, the Guardian reported on Dec. 10.

“Orban is confident that Ukraine aid will not pass in Congress," a diplomatic source told the Guardian. "That is why he is trying to block assistance from the EU as well.”

Republicans in the U.S. Senate blocked a supplemental funding bill that included $61 billion in military and humanitarian aid for Ukraine in a procedural vote held on Dec. 6, while funds for Ukraine may soon run out.

Orban is using the U.S. standstill to support his narrative that Europe should also stop helping Ukraine, which Hegedus called a “dangerous approach.”

“In his mind, if the U.S. does less, the EU also has to do less because the goal will be unachievable, and the bloc will have to rethink its strategy for Ukraine,” he said.

Zelensky trip to DC ends in disappointment as further aid remains at risk
President Volodymyr Zelensky ’s visit to the U.S. on Dec. 11-12 to convince members of Congress to approve further assistance to Kyiv left the president largely empty handed as Western aid on both sides of the Atlantic is at risk of drying up. Republicans in the Senate blocked a

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