EU prepares 90 billion euro Ukraine loan amid Hungary veto

By Ahmet Taş | Wise News Press

BRUSSELS, BELGIUM — The European Commission is accelerating technical and legal preparations for the first installment of a 90 billion euro loan package to Ukraine, anticipating the potential lifting of Hungary's ongoing veto.

Brussels aims to protect Ukraine's war-torn budget from severe cuts and sustain its military infrastructure, though EU officials acknowledge the diplomatic crisis will likely not be resolved until after Hungary's parliamentary elections on April 12.

Election-shadowed veto diplomacy

Hungarian Prime Minister Viktor Orban continues to block the European Union's financial lifeline over a dispute involving the Druzhba oil pipeline, an issue not directly related to the loan package. The Kyiv administration argues that the pipeline's disruption is due to severe infrastructure damage from a Russian drone strike that requires extensive repairs. In contrast, Budapest claims the pipeline was deliberately shut down to influence the upcoming Hungarian elections.

Officials in Brussels predict that Orban's veto, which heavily features anti-Ukraine rhetoric central to his fierce election campaign, will persist at least until the polls close. Current surveys indicate Orban is trailing his younger opposition rival, Peter Magyar, by a double-digit margin. Meanwhile, the Commission is attempting to keep all mechanisms ready to initiate payments as soon as the crisis is resolved. The first of four foundational documents for the aid program was recently published, with the remaining three expected to be completed in the coming days.

Loan details and drone exemption

Under the planned financial program, a total of 45 billion euros will be allocated for 2026. Of this amount, 16.7 billion euros will be used for direct financial support, while 28.3 billion euros are earmarked for military assistance. The remaining 45 billion euros are planned for the 2027 budget.

A notable technical detail in the package is the exemption of unmanned aerial vehicle (UAV) purchases from the "Made in Europe" criteria, allowing Ukraine to procure cost-effective drone components globally. European Commission President Ursula von der Leyen emphasized the bloc's commitment to the process.

"We will deliver the 90 billion euro loan to Ukraine. We stand fully and resolutely behind the brave Ukrainian people and their fight for freedom," von der Leyen stated.

Hungary, Slovakia, and the Czech Republic have received exemptions from the loan contributions, meaning they will not participate in the standard voting process. While this is expected to ease internal approvals, the primary legal hurdle remains the required unanimous consent for adjustments to the EU's common budget, where Hungary is leveraging its veto power.

The 'no oil, no money' ultimatum

EU officials are keeping various diplomatic scenarios on the table for the day after the April 12 elections. If opposition leader Magyar wins, there is hope the veto will be quickly lifted; however, if Orban secures another term, there are fears he may harden his stance. Earlier this month, Orban made his position unequivocally clear, declaring, "No oil, no money," signaling he would block the aid until the pipeline is fully reopened. Should the veto be lifted, the Commission has the necessary liquidity to make the first disbursement within days.

Zelenskyy's harsh criticism

If the veto persists, alarm bells will begin to ring for the Ukrainian economy. Based on current expenditure levels, Ukraine's foreign aid is projected to run out by mid-May. This shortfall could lead to severe cuts in public services and bring domestic weapons production to a standstill.

Ukrainian President Volodymyr Zelenskyy sharply criticized Orban, without naming him directly, stating that the political deadlock is already significantly delaying the country's winter preparation plans.

"One person in Europe is standing against all of Europe just to please Moscow. This is nothing but a deal made with Moscow," Zelenskyy remarked.

Following a meeting with Zelenskyy in Kyiv over the deadlock, EU High Representative Kaja Kallas hinted that if the veto cannot be overcome, the controversial proposal to utilize frozen Russian assets could be revived. However, this alternative remains uncertain due to the complex legal and financial risks it entails.

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