EU leaders enter showdown with Viktor Orbán over
€50bn Ukraine package
Member states hope to persuade Hungary to remove its
block on funding at Brussels emergency summit
Lisa
O'Carroll in Brussels
@lisaocarroll
Thu 1 Feb
2024 05.00 GMT
EU leaders
have returned to Brussels for a second showdown in two months with Hungary’s
Viktor Orbán over his refusal to sanction a new €50bn assistance package for
Ukraine.
A mixture
of frustration and anger prevailed in the city as leaders arrived for dinner on
Wednesday night on the eve of the emergency summit, with aides lamenting the
failure of the Hungarian PM to shift position since December, when he first
blocked the funds.
“We are
really at a crossroads,” said one EU official.
Diplomats
in Brussels stress that Ukraine will not run out of funding for military
equipment and ammunition as this comes through individual member states through
the European Peace Facility.
But they
are worried about liquidity in the Ukrainian economy and the signal a lack of
unity will give to Putin.
This EU
fund, combined with support from the International Monetary Fund and the
European Bank for Reconstruction and Development, has allowed the salaries of
teachers, doctors and soldiers to be paid, cash machines to continue working
and buildings to be reconstructed where possible in the past two years.
Efforts to
persuade Orbán to budge have redoubled in the past 24 hours, with
representatives of the other 26 EU states agreeing to insert a compromise
paragraph in the draft text of the agreement being sought at the summit on the
budget.
In recent
days Hungary said it would lift its veto but only if the budget was revisited
every year of the four-year funding period.
On
Wednesday morning member states’ ambassadors proposed an annual debate rather
than a vote on the Ukraine fund facility.
The new
draft text of the official agreement being sought pledges an annual European
Commission review of the implementation of the funds facility.
On that
basis “the European Council will hold a debate each year on the implementation
of the facility with a view to providing guidance on the EU approach”, the
draft text says.
Weighing on
leaders’ minds is the prospect of Ukraine running out of money in the spring to
pay civil servants, teachers, doctors and to keep pension funds topped up.
There are
also increasing concerns among some member states that Russia, which has
intensified its ammunition production, could win the war against Ukraine.
The EU’s
chief diplomat, Josep Borrell, said on Wednesday that the EU expected to reach
just 52% of its target to send 1m rounds of shells to Ukraine by March this
year, according to the latest production data compiled by the commission.
The data
had been collected after Germany put pressure on the EU’s External Action
Service to try to nail down reliable data on each member state’s contributions.
Some say it
was out of a sense of frustration in Germany, which has so far contributed
€17bn (£14bn) with another €7.4bn committed for 2024, that other member states,
particularly the large economies of France, Italy and Spain, were not doing
enough.
Diplomats
confirmed the survey had been completed but “some member states did not provide
data”.
They expect
it will be raised by the German chancellor, Olaf Scholz, and the Dutch prime
minister, Mark Rutte, at the summit on Thursday.
Speaking
after an EU ministers’ meeting in Brussels, Borrell also said EU countries
planned to train another 20,000 Ukrainian soldiers, on top of 40,000 already
trained.
On
Wednesday five EU prime ministers including Scholz issued a blunt warning in an
open letter that the EU had already fallen short of its ammunition promises.
Scholz,
Rutte and the leaders of Denmark, Estonia and the Czech Republic said: “Russia
doesn’t wait for anybody and we need to act now. If Ukraine loses, the
long-term consequences and costs will be much higher for all of us.”
One
diplomat said the letter had a “dual message” to pile pressure on member states
to increase military support but also to send a message to Vladimir Putin that
time was on the EU’s side as it would not waver in its support for Ukraine.
A final
push on Wednesday to win over Orbán at a meeting of EU representatives appeared
to have failed.
One source
said the Hungarian representative, who spoke first, told counterparts Hungary
was “working intensively and constructively towards a solution that would be
acceptable for everyone within the MFF [multi-annual financial framework]”.
But the
representative then went on to request an annual review accompanied by a
“unanimous vote on the funding” which one diplomat said would “in other words
be establishing a yearly veto mechanism”.
This was “a
clear red line mentioned by almost all delegations”, said a source.
They
pressed upon Hungary that the annual review was a workable compromise.
Officials
have expressed perplexity with Hungary’s hardline position.
The
emergency summit was called just before Christmas, after Hungary blocked the
package arguing more funds would prolong the war in Ukraine.
One senior
official said: “We really are at a deadlock. We will not know what he thinks
until we are inside the room.”
Officials
have worked up a plan B, which would involve the 26 member states agreeing the
money outside the EU budget.
Raising the
money, a mixture of loans and state contributions, that way is more
complicated, requiring parliamentary approval in some cases.
“It is not
the end of the world, but it’s a very difficult situation,” said a source.
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