Could Hungary have to pay dearly for a renewed veto against EU aid to Ukraine? This is the impression given by an analysis by EU officials shortly before the special summit on Thursday.
An analysis by EU officials of the economic situation in Hungary is apparently intended to put pressure on Prime Minister Viktor Orban before the special EU summit on further aid to Ukraine. The document revealed by the Financial Times points out that if the summit fails because of Orban, other heads of state and government could discuss stopping all EU payments to Hungary. This could then lead to falling foreign investment and a further increase in the financing costs of the government deficit and a currency collapse.
This is considered dangerous because Hungary is already one of the EU countries with the highest government deficits and is struggling with very high inflation. In October, the EU expected a public deficit of 5.8 percent of gross domestic product and an inflation rate of more than 17 percent for 2023.
Orban vetoes
A decision about new EU financial aid for Ukraine was supposed to have already been made at the EU summit last December. However, a consensus was needed there and Orban prevented the decision with a veto. He had previously questioned the usefulness of the plans several times and in this context also pointed out that, in his view, the EU had wrongly frozen funds from the Community budget intended for his country. EU financial aid totaling 50 billion euros is planned for Ukraine for the four years from 2024 to 2027.
In order to resolve the dispute with Orban, the special summit was scheduled for Thursday. If no solution can be found with Hungary, the other EU states want to act in a circle of 26 – i.e. without Hungary. In order to get Orban to give in, consideration is also being given to granting Hungary a contribution discount. Such special regulations have already been granted several times in the past – also in favor of countries like Germany.
Goal: Acceptable compromise for all member states
A spokeswoman for EU Council President Charles Michel said the analysis of the economic situation was merely background information and had nothing to do with the ongoing negotiations before the summit. There is no concrete plan for dealing with Hungary if the summit fails. The aim remains to find a compromise that is acceptable to all 27 EU member states.
Diplomats also pointed out that ultimately there would be little way to stop transferring any EU funds to Hungary. If so, Hungary should be threatened with further pushing forward the Article 7 procedure that is already underway due to alleged constitutional deficits. This could theoretically even be used to deprive Hungary of its voting rights in EU decisions.
Source: Stern
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