EU Leaders Fail to Convince Hungary's Orban to Lift Block on Ukraine Loan

EU Leaders Unable to Sway Hungary’s Orban on Critical Ukraine Loan Block

Standoff at Brussels Summit Over Ukraine Loan

By Lili Bayer and Kate Abnett

BRUSSELS, March 19 (Reuters) - European Union leaders failed to convince Hungarian Prime Minister Viktor Orban on Thursday to lift his blockade on a vital 90-billion-euro ($103 billion) EU loan to Ukraine, officials said.

"They tried. They failed," one European official said of the efforts by other EU leaders to convince Orban at a summit in Brussels.

Background of the Loan Blockade

EU leaders agreed to the loan in December but Orban, who has cordial ties with Russia and has clashed with Ukrainian President Volodymyr Zelenskiy, has blocked its implementation, citing a dispute over a war-damaged pipeline.

Orban's stance has angered other EU leaders as Kyiv could run short of money in weeks if it does not receive new funding and his U-turn has called into question the credibility of the European Council, the EU's highest decision-making body.

Summit Discussions and Tensions

"It was intense, a lot of pressure on Orban that (EU summit) decisions are respected by all," another European official said after the leaders discussed the Ukraine loan.

A third European official, referring to Orban, said: "Discussion was tough and rough, but Viktor is still not budging." A fourth said: "Everyone is increasingly angry with Orban."

The officials spoke on condition of anonymity to discuss confidential discussions between leaders.

Reactions from EU Leaders

Dutch PM Says Orban's Veto is 'Unacceptable'

As they arrived at the summit on Thursday morning, many of the leaders had piled pressure on Orban.

"We have to be clear: Hungary's veto is unacceptable, the extra support for Ukraine has to be delivered as quickly as possible," Dutch Prime Minister Rob Jetten said.

"He’s using Ukraine as a weapon in his election campaign, and it's not good," Finnish Prime Minister Petteri Orpo said, referring to the April 12 election in Hungary and accusing Orban of betraying fellow EU leaders.

Orban’s Political Position and Opt-Outs

Orban, a nationalist ally of U.S. President Donald Trump, has often been a thorn in the side of mainstream EU politicians but had not previously gone back on a deal agreed among EU leaders, diplomats say.

Many EU officials are particularly exasperated by Orban's blockade as he secured an opt-out from paying for the costs of the loan, along with the Czech Republic and Slovakia.

But Orban signalled he was in no mood to back down.

"We are waiting for the oil, the rest is fairy tales," he said as he arrived at the summit, referring to the damaged Druzhba pipeline.

The Druzhba Pipeline Dispute

The pipeline carried Russian oil through Ukraine to Hungary and Slovakia but was damaged by a Russian attack in January, officials say. Ukraine says it ​will take some time to ​repair. Hungary says it is ⁠already ready to operate.

Belgian Prime Minister Bart De Wever raised the prospect that the EU may have to wait until after Hungary's election to implement the loan.

Ukraine’s Financial Situation

No Other Option, Says Ukraine

With Russia's war in Ukraine in its fifth year, Kyiv is grappling with a ballooning budget deficit and has said there were no alternative financing options if the 90 billion euro loan remained blocked.

Ukraine's government spends the bulk of its revenues on defence and depends on foreign financial aid to pay pensions, public sector wages, and other social spending.

Consequences of Delayed Funding

If the loan is not approved soon, the government will have to start cutting expenditures and resort to printing money, political analysts said.

"This money is not charity; this is an investment in countering Russian aggression and maintaining peace in Europe," Ukrainian Foreign Minister Andrii Sybiha said on X.

($1 = 0.8726 euros)

(Additional reporting by Andrew Gray, Bart Meijer, Miranda Murray, Essi Lehto, Gianluca Lo Nostro, Gergely Szakacs, Andreas Rinke, Olena Harmash, Julia Payne; Writing by Andrew Gray and Ingrid Melander; Editing by Stephen Coates and Timothy Heritage)