We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Prime Minister Viktor Orbán vetoed a deal €50 billion funding deal last night. Alamy
Viktor Orban

Explainer: Why did Hungary block the EU's €50 billion funding package to Ukraine?

The veto highlights the simmering tensions between the EU and Orbán’s Hungary.

THE EUROPEAN UNION failed to reach a deal overnight to send a €50 billion aid package to Ukraine after Hungarian Prime Minister Viktor Orbán vetoed the deal.

This move was slightly surreal: it had been widely expected that Orbán would be more likely to veto talks on Ukraine joining the EU, which was discussed earlier in the day – but he did not. 

Instead, as the leaders of many members states prepared to face off against Orbán, he raised and then dashed hopes, allowing Ukraine’s EU talks to begin but putting his foot down on the much-needed aid package. 

The veto highlights an already dwindling relationship between Hungary and its fellow EU countries since Orbán took office in 2010 and began power plays, verbal battles with the bloc and voicing his outright ideological differences.

Shortly after Orbán won re-election with an overwhelming majority last year, the EU launched a probe into the 2022 Hungarian elections, which led to the beginning of procedures to strip Hungary of funding over democratic standards concerns

A few months before the election, Hungary had introduced a controversial law forbidding the “representation or promotion” to minors of homosexuality or gender change.

The legislation was met with outrage by activists and European politicians who saw it as an attack on LGBTQ+ rights and recognition.

At the time, European Commission President Ursula von der Leyen spoke of the “shame” the law cast.

Orbán had spent his previous term frequently taking the opportunity to take part in ‘Brussels-bashing’ and accusing in the EU of backsliding on democratic norms.

However, after the election, the Commission fell to pressure by the parliament, who claimed there were no safeguards in place to protect EU funds being misused by Hungarian government. 

Since taking power in 2010, Orbán has tightened his government grip on NGOs, the media and activism in Hungary. This was followed by multiple claims he had also diverted EU funds away from the state and into the pockets of his close allies and family.

French MEP Gwendoline Delbos-Corfield at the time said: “The failure of the Hungarian government to manage public money transparently is well known and documented.

“How can a member state use EU funds properly when the independence of the judiciary has been destroyed and there are no sufficient safeguards against corruption?” she added.

The Commission then froze upwards of €20 billion structural funding to Hungary, including over €5 billion in Covid-relief funding, which hampered the state’s post-pandemic return and its fight against rising inflation in 2022.

This critical funding being frozen was one of the first major moves by the EU to push Orbán and his government to get in line with the rest of the bloc.

Instead, Orbán sent his commissioners to Brussels, who were unsuccessful in their bid to convince the Union to release the funding – instead pushing the Commission to launch a new authority to safeguard EU funds in Hungary and called for stronger anti-corruption bodies and space for NGOs to scrutinise government policy.

More blows to this relationship followed in July 2022 when the European Commission took Orbán and his government to the European Court of Human Rights for alleged failings to protect the rights of the LGBTQ+ community in his country.

In September 2022 the European Parliament declared that the country was no longer a “full democracy” and that the European Union needed to act.

In April of this year, fifteen of the 27 member states – including Ireland – followed suit with the executive branch and took legal action against Hungary over concerns around the country’s anti-LGBTQ+ laws.

Oil spouts

Another source of tension between the two is that Hungary faces a tough deadline – given to it by the European Commission last year – over a ban on Russian oil imports across the continent, which enraged Orbán’s cabinet. 

Commission President Ursula von der Leyen said in May 2022 that the EU would “phase out Russian supply of crude oil within six months, and refined products by the end of the year”.

According to statistics from the OECD, landlocked Hungary receives upwards of 80%, in some years 90%, of its gas and oil directly from Russia. At the time, Orbán said if the EU followed through with banning oil imports from Russia it was attacking Europe’s unity.

“The European Commission president, intentionally or unintentionally, has attacked the European unity that had been worked out,” Orbán said on state radio at the time.

“From the first moment we made clear that there will be a red line… they have crossed this red line,” he added.

The EU pushed on with its plan, despite the pleas from Hungary and Slovakia, and banned oil imports into the continent. The two countries – both highly dependent on Moscow’s oil exports – were exempt until the end of this year, when they’d have to find a new dealer.

Orbán has said that this extension was not long enough and having to find a new importer would be like “a nuclear bomb dropped on the Hungarian economy”.

The refusal of the EU to listen to the complaints from Hungary, Slovakia and Czechia did nothing to improve this already arduous relationship between Orbán and his European counterparts.


Since then, Orbán has been attempting to block key legislative agreements in a prickly move to try to get the funding from the EU reinstated. 

At the last summit of the European Council in October, Poland and Orbán clashed with EU leaders in a row over proposed changes to Europe’s migration rules which led to the pair preventing the council from including migration in a joint statement of the summit’s conclusions.

Among other things, this forced European Council president Charles Michel to issue a separate statement in his name about asylum policy and border protection.

Shortly after, Hungary’s European Commissioner ended up in the firing line of the EU after he went on what Irish MEP Barry Andrews labelled a “solo run” to The Journal, when he independently announced that financial aid to Palestine would be cut by the EU.

The commissioner, Oliver Várhelyi, went on to walk back his statement and faced calls for his resignation, followed by questioning by MEPs on this move.

Fianna Fáil’s Andrews told The Journal in October that he did not think Várhelyi would resign at the time but if he did, “the Orbán government would replace him with someone equally as critical of the European project”.

Várhelyi is also the commissioner in charge of overseeing Ukraine’s eligibility to join the European Union, although in June he said they were making good progress, later hinting that he was in favour of the EU expanding.

‘A great opportunity for Hungary’

In what some saw as a concession to coax Hungary to be more conciliatory, the Commission agreed on Wednesday to unblock €10 billion of cash for Budapest that it has frozen.

But another €21 billion remains out of Orbán’s grasp, which potentially had a big impact on the decisions he was to make later that week. 

Orbán matched Várhelyi’s promotion of the expansion of the EU, and did not use his veto to block the start of membership talks for Ukraine, later claiming that he was influenced by his fellow European leaders to do so. 

Orbán said: “Their decisive argument was that Hungary has nothing to lose by doing so, given that the final word on Ukraine’s membership must be given by the national parliaments, 27 of them, including the Hungarian one.”

However, with a portion of Hungary’s funding still frozen, Orbán decided not to allow €50 billion from the pot to go to another state who’s yet to be a member of the union.

After Orbán did not attempt to stop membership talks, it came as an even greater shock to member states when he vetoed the much-needed funding package to Ukraine and left the summit as the membership talks began.

Most EU leaders wanted this week’s summit to send a sign of solidarity with Ukraine 22 months after Russia launched its invasion. Any decisions must be unanimous – or at least unopposed – by the 27 member states.

Therefore, if Orbán abstains from the Ukrainian membership talks, they can continue without disruption. 

Orbán said on this decision: “I’ve always said that if someone wants to amend the budget law, and they want to for several reasons, this is a great opportunity for Hungary to make it clear that it should get what it deserves.

“Not half, then a quarter, but it must get the whole thing. We want to be treated fairly, and now there is a good chance that we can assert this.”

Taoiseach Leo Varadkar said this morning, as the second day of the EU summit got underway in Brussels, that Orban’s position was “disappointing” and put the EU in a “difficult position”.

Varadkar said: “In fairness to Prime Minister Orbán, he made his case, made it very strongly. He disagrees with this decision (starting membership talks with Ukraine) and he’s not changing his opinion in that sense, but essentially decided not to use the veto power.

“I respect the fact that he didn’t do that, because it would have put us in a very difficult position as a European Union.”

Varadkar said members states will “regroup next year and come to an agreement then” and noted that the money could be “provided on a bilateral basis”.

“There are workarounds, but it’s not where we want to be, so we think it’s still possible to come to an agreement with the EU 27 and we’ll try to get to that space next year,” he added.

Varadkar said that discussions went on until 2am but added that “it’s not always possible to solve everything in one meeting and you have to have a second one”. 

Accession talks are underway again and European leaders remain optimistic that there will be little disruption on this front.

Belgian Prime Minister Alexander De Croo called the opening of membership discussions a black eye for Russian President Vladimir Putin.

“It is a very clear message to Moscow. Us Europeans, we don’t let go of Ukraine,” he said. He said he thought Orban “didn’t use his veto because he realised that it would be indefensible”.