EU to proceed with €50bn aid for Ukraine despite Hungarian, assures von der Leyen

Ursula von der Leyen, President of the European Commission, asserted that the European Union is prepared to navigate around Viktor Orbán’s veto to greenlight the €50-billion special fund earmarked for Ukraine.

The aid package, aimed at sustaining Kyiv financially until 2027 and addressing the mounting public deficit, faces an impasse due to Hungary’s objection, leaving Brussels in a financial deadlock concerning assistance for the war-ravaged nation.

Following a thwarted unanimous vote in mid-December, EU leaders are scheduled to reconvene on February 1 for another attempt to secure approval for the so-called Ukraine Facility.

Speaking at the World Economic Forum in Davos, Switzerland, von der Leyen emphasized the importance of engaging with all 27 EU member states to operationalize the €50 billion fund. Despite the hurdles posed by Hungary, she expressed determination, stating, “It’s the preparation for the extraordinary European Council on the 1st of February. It’s hard work.

We have discussed many different issues.” The Hungarian government has put forward specific demands in exchange for lifting the veto, including dividing the Facility into annual tranches and extending the deadline for spending COVID-19 recovery funds.

Von der Leyen refrained from directly addressing these demands but made it clear that the EU would proceed with approving the €50-billion fund, with or without Hungary’s consent. She asserted, “My personal priority is to have an agreement by 27 (countries).

And if this is not possible, we are prepared for an agreement by 26.” While EU officials have not publicly discussed an alternative plan, it is evident that preparations are underway to avert a repeat of the December setback. The Financial Times previously reported on Brussels exploring an alternative involving the Commission borrowing €20 billion from financial markets.

In a bilateral meeting with Ukrainian President Volodymyr Zelenskyy in Davos, von der Leyen assured him that the European executive would strive to secure the means for Ukraine’s recovery, rebuilding, and reform through the proposed Facility. Zelenskyy echoed this sentiment, emphasizing Ukraine’s expectation for a consensus on the matter at the February summit.

In a speech at the World Economic Forum, von der Leyen highlighted the urgent need for predictable financing for Ukraine throughout 2024 and beyond, especially given the legislative deadlock in Washington hindering fresh funding. She emphasized the necessity of empowering Ukraine’s resistance with sustained weapons supply, capabilities to deter future attacks, and the assurance of a better future within Europe.