EU Unity Fractures: Hungary Veto Leaves Ukraine’s Finances in Limbo

Hungary has maintained its opposition to a major EU financial package for Ukraine, leaving Kyiv facing a potential funding shortfall within months if no alternative solution is secured. At a European Council meeting in Brussels on March 19, Prime Minister Viktor Orban again refused to lift his veto on the €90 billion loan intended to support Ukraine through 2026–2027, linking his position to the resumption of Russian oil transit via the Druzhba pipeline.

The funding had originally been agreed unanimously by all 27 EU member states in December 2025 and is designed to cover roughly two-thirds of Ukraine’s financial needs over the two-year period. Ukraine remains heavily dependent on external assistance to sustain state functions and finance its war effort. However, the agreement is now effectively stalled, with Hungary insisting that oil flows through Druzhba must resume before it backs any further decisions favorable to Kyiv.

Tensions have been further fueled by damage to the pipeline infrastructure, which Ukraine says was caused by Russian air strikes in late January. Hungary and Slovakia, however, accuse Kyiv of delaying repairs. In response, a European delegation visited Ukraine to assess the situation on the ground. Naftogaz CEO Serhii Koretskiy said Ukrainian officials presented detailed assessments of the damage and a full reconstruction plan, stressing that the destruction was a direct consequence of Russian attacks.

Despite the deadlock, European Commission President Ursula von der Leyen insisted the EU would still deliver the financial support. She acknowledged that the package remains blocked by one leader failing to honor prior commitments but emphasized that the Union would find a way to proceed regardless. The arrangement had already accounted for the possibility that Hungary, Slovakia and Czechia would not participate directly in the loan.

French President Emmanuel Macron also underscored the importance of sticking to the original agreement, warning that abandoning it would undermine the credibility of the European Council. He argued there is no alternative scenario, insisting that commitments made at the level of EU leaders must be respected. Macron also welcomed Ukraine’s cooperation in allowing an EU technical mission to assist with pipeline repairs.

The dispute has widened beyond Hungary alone. Slovakia has aligned itself with Budapest, with Prime Minister Robert Fico warning of possible additional measures against Ukraine. He cited what he described as serious disruptions to Slovakia’s oil supply and accused Kyiv of deliberately delaying pipeline restoration. Fico went further, suggesting that Ukraine’s actions could be politically motivated and even linked to Hungary’s domestic electoral dynamics.

Ukraine has rejected these claims. Foreign Ministry spokesman Heorhii Tykhyi accused Hungary of turning the pipeline issue into a political tool while ignoring the broader context of ongoing Russian attacks. He noted that Ukrainian infrastructure, including multiple pipelines, continues to suffer regular damage, and that repairs are carried out under wartime conditions with limited resources.

The standoff has also impacted broader EU policy. Both Hungary and Slovakia have blocked the adoption of the bloc’s 20th sanctions package against Russia, which had been expected to pass last month. In parallel, the European Council adopted conclusions on Ukraine signed by 25 member states, excluding Hungary and Slovakia, highlighting a growing split within the Union.

Inside the summit, Orban reiterated his position with the message “first oil, then money,” arguing that restoring energy flows is a prerequisite for further support. His stance drew sharp criticism from several leaders. European Council President António Costa described Hungary’s actions as unacceptable, while some leaders also took issue with remarks made by Ukrainian President Volodymyr Zelenskyy, saying his tone toward Orban had complicated negotiations.

Italian Prime Minister Giorgia Meloni added another layer to the debate. According to diplomats, she told colleagues she understood Orban’s reasoning, particularly in light of upcoming elections, while still supporting the immediate disbursement of funds to Ukraine. Her office later denied the reported comments, but the episode reflected divisions even among governments broadly aligned with EU policy.

For now, Ukraine remains in a precarious financial position. Without access to the planned EU loan and with limited alternatives available, the risk of a budgetary gap by late spring is growing, as political disagreements within the bloc continue to delay a resolution.