FirstFT: EU fails to agree €50bn Ukraine funding after veto from Hungary’s Orbán

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Good morning.

The EU has failed to agree a critical €50bn financial aid package to Ukraine after Hungary’s Prime Minister Viktor Orbán vetoed the proposal, throwing into doubt Europe’s ongoing support to Kyiv.

The collapse of talks on the funding, seen as crucial for Ukraine’s financial stability into 2024, follows repeated failures by the US Congress to agree a $60bn aid package proposed by the White House. That has raised fears of weakening western resolve to sustain the country as it continues to battle against Russia.

EU leaders, who were locked in negotiations over the package until early this morning, will return to Brussels in early 2024 for talks on the financing, with possible options to provide cash to Kyiv without Orban’s input.

The failed efforts were announced hours after the leaders agreed to open accession talks with Ukraine — a milestone on Kyiv’s path to join the EU once the war with Russia is over and an endorsement by the bloc of the country’s western trajectory. Here are more details from the summit in Brussels.

Here’s what I’m keeping tabs on today and over the weekend:

• Economic data: The UK reports November insolvency figures, and S&P Global publishes manufacturing and services purchasing managers’ indices for the EU, France, Germany, Italy, the UK and the US today.

• Results: Darden Restaurants and H&M report today.

• Hanukkah: Today marks the last day of the Jewish festival of lights.

• South Africa: The country marks its Day of Reconciliation on Saturday.

• Serbia: Snap parliamentary and local elections will be held on Sunday.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Exclusive: The EU is set to extend its truce with the US over steel tariffs imposed by Donald Trump until after presidential elections next year. European trade commissioner Valdis Dombrovskis told the Financial Times he was in favour of postponing the reimposition of retaliatory tariffs on US goods such as bourbon whiskey and Harley-Davidson motorbikes. Washington has also agreed to suspend its levy on steel and aluminium, as the two sides work towards solving the years-long dispute, he said.

2. Exclusive: St James’s Place is planning to raise up to £1bn by 2030 to buy the businesses of retiring partners, as it tackles challenges wrought by its increasing scale and higher interest rates. The funds will support succession planning within its network of 2,622 partner firms, who manage the group’s relationship with its 914,000 clients. Here are more details on the FTSE 100 wealth manager’s plans.

3. The European Central Bank and Bank of England damped a market rally sparked by the US Federal Reserve’s signal that it would cut interest rates next year. While holding rates steady, the BoE and ECB heads refused to declare victory over inflation, with the ECB’s Christine Lagarde cautioning “we should absolutely not lower our guard” against price pressures.

4. Exclusive: Elon Musk privately told some lenders who funded his Twitter buyout that they would not lose money, according to people familiar with the matter. The verbal guarantees were made to bankers who lent him $13bn as a way to reassure them after the social media platform, now called X, fell sharply in value after he bought it. Read the full story.

5. The US has told Israel to lower the intensity of its war with Hamas “in the near future”, the White House said yesterday. US national security adviser Jake Sullivan spoke to Israeli Prime Minister Benjamin Netanyahu during his trip to the Middle East this week, right after the Jewish state warned that the war could take months.

News in-depth

Europe’s central bankers insisted yesterday it was too soon to let down their guard against high inflation despite a volte-face by US Federal Reserve chair Jay Powell. While the European Central Bank and the Bank of England appear determined to push back against rate-cutting speculation, their protests risk being drowned out as investors bet they will follow the Fed in signalling cuts to borrowing costs in 2024.

We’re also reading . . . 

• Ivory Coast: Tidjane Thiam, who ran Aviva, Prudential and Credit Suisse, is taking the first step in a campaign to become president of the west African country.

• Paris Saint-Germain: A deal with US investor Arctos valuing the football club at more than €4bn signals a commercial push by PSG’s Qatari owners.

• Property outlook: With rising borrowing costs, racing rents and high house prices, many first-time homebuyers put their plans on hold this year. Will 2024 offer any solutions?

• Investing in 2024: Artificial intelligence mania, animal spirits and “dry powder” — here’s what FT Money’s panel chewed over at its annual investment lunch.

Chart of the day

Opting to focus disproportionately on immigration policy relative to the cost of living and housing affordability, the UK Conservative party has endured 14 months of polling deficits of about 20 points. John Burn-Murdoch explains why an all-out assault on overseas arrivals is not the vote-winner it once was.

Take a break from the news

Lana Del Rey’s epic exercise in Californian mythmaking, Ryuichi Sakamoto’s mesmerising instrumentals and Kelela’s dance-floor-reclaiming campaign are featured in FT critic Ludovic Hunter-Tilney’s round-up of the best pop albums of 2023.

Additional contributions from Benjamin Wilhelm and Tamara Kormornick