One of the most important agenda items of European politics in recent times has been the economic aid package planned by the European Union (EU) for Ukraine. In this context, following the European Council meeting held on 20-21 October 2022, the council proposed a support package of 18 billion euros to Ukraine for 2023.[1]
The package aims to ensure that Ukraine continues to pay basic wages and pensions and maintain basic public services such as hospitals, schools, and housing for people forced to relocate. At the same time, this package is aimed at ensuring the economic stability of Ukraine and enabling the country to restore its energy infrastructure, water systems, and transport networks destroyed by Russia.[2]
While the military point is gaining weight in the support packages of the United Kingdom (UK) and the United States (US) for Ukraine, it is observed that the EU is aiming for improvements to the country’s infrastructure and logistics more comprehensively. Therefore, it can be said that Brussels is more focused on the reconstruction of Ukraine.
On the other hand, it can be said that the EU is facing some challenges in its aid plan for Ukraine. Hungary, in particular, has opposed the aid package. Hungary’s opposition to EU aid to Ukraine comes as no surprise. Budapest claims that the loan to be given to Ukraine is highly privileged. However, it can be stated that the main reason for Hungary’s objection is the funding problem between the EU and Hungary.
In 2022, Brussels’ blocking of EU funding for Budapest has increased tensions between the parties. The European Commission has also recommended the suspension of 7.5 billion euros in funding allocated to Budapest in September 2022.[3] Brussels has asked Budapest for some reforms to benefit from EU funds and has given time Hungary until December 19, 2022.[4] Therefore, as the deadline for Hungary to benefit from EU funds approaches, Budapest wants to use Brussels’ aid plan for Kyiv as a trump card to strengthen its hand.
Due to the situation, it can be said that the EU may have difficulty in implementing the aid package for Ukraine. Decisions are taken unanimously in the EU and Hungary has declared that it will oppose this package. For this reason, Hungary wants to use its veto power. Therefore, the EU may need to take steps to convince Hungary to deliver aid to Ukraine. Besides, after Hungary announced its opposition to the package, an EU official stated on November 11, 2022, that Budapest had taken important steps in terms of receiving the funds.[5]
In this context, it is seen that there are positive developments in terms of Hungary’s access to EU funds. It is no coincidence that after Budapest announced that it would oppose the aid package for Kyiv, the EU said that Hungary had taken “important steps.” Therefore, it can be foreseen that the EU will find a solution to its disputes with Hungary to send an aid package to Ukraine.
As can be understood, the Budapest administration is trying to turn the aid package for Ukraine into an opportunity to find a solution to the fund problem with the EU. Hungary will receive 7.5 billion euros if it gains access to this aid. This will lead to a significant relief in the Hungarian economy. Therefore, Brussels has begun to soften its attitude towards Budapest.
On the other hand, Germany, which is the most politically and economically powerful country in the EU and advocates the abolition of veto power, reacted to Hungary’s attitude. Although some circles accuse Hungary of being pro-Russian, the main reason for Budapest’s stance is that it wants to be able to access EU funds that will relieve it financially by following a policy in line with its national interests.
As can be seen, if the EU wants to implement its aid plan for Ukraine, it must first convince Hungary. This could therefore result in the EU giving Hungary the funds it froze. Given the financial size of the aid to be provided to Ukraine by the EU, it will play a critical role both in Ukraine’s reconstruction and in its fight against Russia. Therefore, the EU will prioritize the urgency of aid to Ukraine. Therefore, it can be argued that it would not be surprising if Brussels made concessions to Budapest.
In conclusion, Hungary is not expected to back down from its position. In this context, Budapest sees the support plan as an opportunity to benefit from EU funds. Given the urgency of aid to Ukraine, one could argue that Brussels will try to reach an agreement with Budapest on EU funds.
[1] “Commission Proposes Stable and Predictable Support Package for Ukraine for 2023 Of Up to €18 Billion”, European Commission, ec.europa.eu/commission/presscorner/detail/en/ip_22_6699, (Date of Accession:20.11.2022).
[2] Ibid.
[3] Gabriela Baczynska-Jan Strupczewski, “EU Poised to Unblock Billions in Funds For Hungary-Sources”, Reuters, www.reuters.com/world/europe/hungary-seen-track-unlocking-billions-euros-eu-funds-this-year-eu-sources-2022-11-17/, (Date of Accession:20.11.2022).
[4] “EU Extends Deadline for Hungary to İmplement Anti-Corruption Reforms”, France 24, www.france24.com/en/europe/20221012-eu-extends-deadline-for-hungary-to-implement-anti-corruption-reforms, (Date of Accession:20.11.2022).
[5] “EU Says Hungary Made ‘Significant Step’ to Get Recovery Funds-Source”, Reuters, www.reuters.com/world/europe/eu-says-hungary-made-significant-step-get-recovery-funds-source-2022-11-11/, (Date of Accession:20.11.2022).
