Budapest is fuelling anti-Ukraine sentiment ahead of a key election.
BRUSSELS ― Hungary has thrown the EU’s planned €90 billion loan to Ukraine into crisis after threatening to block the deal until the flow of Russian oil resumes through the Druzhba pipeline.
The Hungarian government issued the warning on Friday evening, as Prime Minister Viktor Orbán tries to weaponize anti-Ukraine sentiment ahead of a key election where he risks losing power after more than 15 years.
“Ukraine is blackmailing Hungary by halting oil transit in coordination with Brussels and the Hungarian opposition to create supply disruptions in Hungary and push fuel prices higher before the elections,” Hungarian Foreign Minister Péter Szijjártó wrote on X. “We will not give in to this blackmail.”
Hungary’s threat to veto the loan is a major setback for Ukraine, whose coffers will begin running low on cash from April. Kyiv will struggle to sustain its war effort without fresh funds, leaving it at a disadvantage in ongoing peace talks with Russia.
The first signs of trouble began earlier in the day on Friday. Hungary’s ambassador to the EU demanded that its national assembly get the standard eight weeks to scrutinize EU legislation during a meeting of envoys in Brussels, three EU diplomats told POLITICO.
EU ambassadors were set to give their final approval for the loan ahead of Tuesday, which marks the four-year anniversary of Russia’s invasion of Ukraine.
In a fresh confrontation with Ukraine, Orbán is accusing the war-torn country of halting Russian gas to Hungary for political reasons. Kyiv rejects these claims, arguing that Russian strikes have damaged the energy infrastructure.
In a rebuke of Hungary’s accusations, Ukraine’s embassy to the EU suggested in a letter to the European Commission to continue supplying oil to Slovakia and Hungary “either through Ukraine’s oil transportation system or via a maritime route.”
“Ukraine consistently reiterates its continuous readiness to ensure transportation of the oil within available legal framework,” the embassy wrote in the letter sent on Thursday and seen by POLITICO.
The European Commission convened an emergency meeting earlier this week to solve the dispute over the Druzhba pipeline after Hungary and Slovakia retaliated by halting diesel supplies to Ukraine.
EU leaders, including Orbán, agreed to the €90 billion loan in December following months of fraught negotiations. In a major concession, the EU exempted Hungary, Slovakia and Czechia ― who oppose giving further aid to Kyiv ― from repaying the borrowing costs of the loan.
“We expect all [member states] to honor that political agreement in view of final adoption of the loan,” the Commission wrote in a statement on Friday.
Budapest on Friday refused to clear one bill that requires unanimity to expand the cash buffer, known as the headroom, of the EU’s long-term budget to issue the loan. EU ambassadors backed the other two bills underpinning the Ukraine loan that only needed a simple majority for approval.
As Russia’s firmest ally in the EU, Orbán has frequently threatened to block the EU’s financial support to Ukraine.
UPDATED: This story has been updated to reflect Hungarian Foreign Minister Péter Szijjártó’s comments online.
CORRECTION: This article has been corrected to note that oil flows through the Druzhba pipeline.