A top European Council official refuted press reports that the EU was considering cutting off Hungary from EU funds if it again blocked a proposed €50bn aid package for Ukraine at a summit this week, IntelliNews reported.
A leaked briefing note to the press reflects growing frustration in European capitals with the tactics of Hungarian leader Viktor Orbán, local media reported on January 29. The document cited by the Financial Times is a background paper prepared by the Council Secretariat elaborating on the situation in the Hungarian economy. However, the paper has no connection with the current negotiations, a senior European Council official says.
Plans have been drawn up to “sabotage the Hungarian economy” by freezing Hungary’s funding for undermining EU foreign policy. According to the schemes, without funding, financial markets and foreign companies would be less interested in investing in the country, which could quickly trigger an increase in the cost of financing the government deficit and cause the currency to collapse.
Some capitals are also considering invoking Article 7, which would allow Brussels to strip Budapest of its voting rights, one diplomat said. However, Didier Reynders, the European Commissioner for Justice, stated on January 29 that the issue was not currently under discussion, as it would require unanimity.
There is no decision in the Commission at this moment in time to trigger the next step under Article 7. It’s not possible for the Commission to take a decision in the process.
Ahead of the summit on February 1, several suggestions have emerged on how the EU might react if Orbán blocked a joint initiative on Ukraine. The EU26 without Hungary could send money to Kyiv outside the EU budget on an intergovernmental basis. However, Plan B would require ratification by national parliaments and take much longer.
By changing its position, Hungary signalled that it could accept Ukrainian aid coming from the core budget and financed by the EU’s general loans. Hungary’s European Affairs Minister János Bóka stated that the government could be open and allow the use of the EU budget, provided that there was a possibility of revising it after two years. Orbán had originally proposed splitting the 50-billion-euro aid into four tranches to be approved annually.
Ukraine has also held talks with Hungary to resolve issues related to the language rights of its ethnic Hungarian minority, which Budapest has sometimes cited as a reason for withdrawing the aid.
At the same time, Orbán faces increased pressure from Washington over the delayed ratification of Sweden’s NATO membership.
