Impasse continues over Hungarian veto on EU military aid for Ukraine

Hungary has kept a firm veto on the aid since May and has not budged despite the repeated pleas by Josep Borrell, the bloc’s foreign policy chief, who has tried to mediate in the bilateral dispute in a bid to maintain a united front.

“By coming to Kyiv the European Union foreign ministers send a strong message of solidarity and support to Ukraine in the face of this unjust and illegitimate war,” Borrell said at the end of Monday’s meeting, which was attended by President Volodymyr Zelenskyy.

“The strongest security commitment that we can give to Ukraine is European Union membership.”

Borrell made no mention of the Hungarian position and simply said EU support for Ukraine would continue “in all dimensions.” Péter Szijjártó, Hungary’s representative, did not participate in the ministerial gathering and was represented by a deputy official.

Hopes that the veto would be lifted increased after Ukraine’s National Agency on Corruption Prevention (NACP) temporarily suspended the designation OTP Bank, Hungary’s largest bank, from its public list of “international sponsors of war.”

The bank was first added in early May, triggering Budapest’s fury and a protracted impasse in the bloc’s decision-making.

The “sponsors” list is a compendium of companies and executives who, the NACP says, continue to do business in Russia, pay taxes to the central government, and prop up the federal budget that bankrolls the war against Ukraine.

Being added to the list has no legal implications but entails serious reputational damage.

The Hungarian government has repeatedly denounced the inclusion of OTP Bank as “unacceptable” and “outrageous,” and has been wielding its veto power to hold up the latest tranche of EU military support as a means to twist Kyiv’s arm. (Any foreign policy decision requires the unanimous vote of all 27 member states.)

After months of refusing to make any concessions, the NACP announced on Friday the temporary suspension of OTP Bank from the list of war sponsors, together with five shipping companies from Greece.

The definitive removal will only take place when the blacklisted firms demonstrate they have cut all ties with Russia for good. Until recently, OTP Bank’s website said it had 2.4 million clients in the country. (The site’s Russian section is no longer accessible.)

“This decision was made as a result of negotiations between the Agency’s representatives and representatives of companies and governments in these countries to terminate cooperation with the Russian Federation,” the NACP said in a statement.

“The Agency hopes that this decision will lead to Hungary’s unblocking of €500 million of vital EU military aid for the Ukrainian people.”

But despite the breakthrough, Hungary did not yield, arguing the modification was insufficient to meet its demands.

“No material change has happened,” a spokesperson for the Ministry of Foreign Affairs said over the weekend. “As long as OTP Bank is not removed from the list, Hungary will not participate in further EU funding for arms supplies to Ukraine.”

The refusal prevented Borrell from making the long-awaited announcement after the meeting in Kyiv, the first time ministers get together outside the bloc’s borders. According to an official transcript, President Zelenskyy made a direct plea for releasing the €500 million during his intervention in the gathering.

“We remain united. I don’t see any member state faulting on their engagement,” Borrell told reporters in Kyiv. “We will do more of the same.”

Borrell said he would propose a new package of EU military assistance for Ukraine worth “up to €5 billion” in order to cover the country’s needs for 2024. The tranche, he said, would be part of the €20-billion programme that he pitched in the summer.

The aid is channelled through the European Peace Facility, an off-budget scheme that partially reimburses the expenses incurred by member states as a result of their continued supplies to the war-torn nation, which is in the midst of a gruelling counteroffensive against the invading Russian troops.

“More will come. I hope we can reach an agreement before the end of the year,” Borrell said, referring to the €5-billion envelope.

The proposal, however, could soon fall victim to a fresh veto. The winner of Slovakia’s parliamentary election, Robert Fico, has adopted a pro-Russia agenda and vowed to end military assistance to Ukraine.