It's the second time: the EU approves €50 billion in aid to Ukraine

Photo: TASS

MOSCOW, February 1 /TASS/. The leaders of the European Union member states have approved the allocation of long-term budgetary aid to Ukraine in the amount of 50 billion euros for the next four years. EU Council President Charles Michel announced the approval of the package on the social network X just minutes after the start of an emergency EU summit in Brussels.

The EU will approve annual budget payments to Ukraine under a €50 billion aid programme, Reuters reports. This condition was demanded by Hungary, which blocked the allocation of aid to Ukraine at a previous EU summit. Budapest called on the EU to spend the funds to help Europe's population.

Junanimous decision

For the second time, EU leaders approve the allocation of €50 billion in long-term budgetary aid to Ukraine, to be spread over the next four years. Now, the budget allocation for Ukraine will be reduced by 1.5 times compared to the situation in 2023. Last year, the EU allocated €18 billion to Kiev, with monthly payments of €1.5 billion, while the allocation of €50 billion over four years means payments of €1.02 billion per month.

The first attempt to approve aid to Ukraine took place at the EU summit on 14-15 December 2023, but Hungary blocked the agreement. Budapest proposed to provide financial assistance to Kiev on an annual basis with strict control over the spending of funds. The EU wanted to reach a unanimous decision with the participation of all 27 member states. As Hungary demanded, the EU will approve budget payments to Ukraine annually under a €50 billion support programme, Reuters reported, citing diplomatic sources.

The €50 billion aid, which runs until the end of 2027, assumes that the European Commission will provide Kiev with a €33 billion loan and €17 billion in "grants", meaning it does not have to be repaid. The EU budget is adopted for a seven-year period. All the available funds in the current EU budget plan for the period 2021-2027, which could be reallocated to support Kiev, have already been fully used up in 2022-2023. In order to finance the new €50 billion for the remainder of the seven-year period, the European Commission has called for new contributions to the EU budget from EU countries.

Hungarian attitude
Hungary is firmly of the opinion that the conflict in Ukraine cannot be resolved by military means. It is in favour of peace negotiations and against sending weapons to Ukraine. As they stressed in Budapest, the allocation of EUR 50 billion from the EU budget to Ukraine "is within the framework of a military solution". According to Hungarian Prime Minister Viktor Orbán, these funds are needed by the Europeans themselves, who are facing an increasingly difficult economic situation.

Orbán suggested that the European Union should provide financial aid to Ukraine, but in such a way that it would not affect the organisation's budget. Hungary, he said, opposed EU countries taking out a joint loan to provide financial aid to Ukraine. He believed that a special fund should be created for this purpose, which could raise funds from public and private sources.

At the end of January, Hungarian Minister for Foreign Affairs and External Economic Relations Peter Szijjártó said that Budapest is ready for a compromise - to approve annually, in accordance with the principle of unanimity, the provision of EU budget funds to Ukraine. Orbán also said that despite the compromise proposed by Budapest, he does not support using the EU budget for this purpose "and the Hungarian people do not like it either", but "European unity is a value" that must be guarded.

Backup plan
At the beginning of January, EC President Ursula von der Leyen said that the European Commission was preparing a back-up plan to help Ukraine if the summit failed to reach an agreement. However, she did not provide details. According to the Financial Times, the EU was planning to undermine the Hungarian economy if Budapest did not agree to fund Kiev. According to the newspaper, Brussels has threatened Budapest with a complete freeze on the funds it owes Hungary and a collapse in the exchange rate of the national currency, the forint, to damage the country's economy and make it less attractive to investors.

The Financial Times recalled that the EU could also use Article 7 of the 2007 Treaty on European Union to strip Hungary of its voting rights if it refuses to allocate funds to Ukraine. However, the European Commission has said that it does not intend to, and does not have the power to, independently initiate proceedings to deprive Hungary of its voting rights. Only the member states of the European Union have this right.

TASS/gnews.cz-JaV_07

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