No more vetoes for Orban. EU is presenting Plan B for aid to Ukraine
December 27, 2023, 10:19 am Listen to the article
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Ukraine needs money to pay salaries and pensions and to run hospitals, schools and emergency shelters. 26 EU states would like to transfer billions of euros to it, but Hungary is in the way. A well-known model would bypass the Hungarian veto.
The European Union is preparing a new aid program for Ukraine worth up to 20 billion euros, in which Hungary will have no say. If Hungarian Prime Minister Viktor Orban maintains his veto at the next EU summit on February 1, the debt-financed plan would bypass Hungary in order to release the money quickly, the Financial Times reports. The model therefore envisages the remaining 26 EU states providing guarantees for the EU budget, which would allow the European Commission to borrow up to €20 billion on capital markets for Ukraine next year.
According to internal sources, the exact terms of the contract and the amount of aid are still being negotiated. It is said that the final amount of aid loans should depend on Ukraine's needs. However, the procedure is already known: in the same way, the EU Commission raised almost 100 billion euros on the capital markets in 2020 to support EU states in the Corona crisis.
Bundestag must agree
The EU has been trying unsuccessfully for weeks to put together a €50 billion financial package for Ukraine over the next four years. Of this amount, 17 billion euros will flow in the form of grants and 33 billion euros in the form of loans. However, all 27 EU states must agree to this plan, which Orban blocks: “Voto against additional funds for Ukraine,” said the head of the Hungarian government two weeks ago, after the last EU summit in Brussels.
Using the new model, Orban would no longer be able to block aid to Ukraine. However, support would have to be approved by the parliaments of several countries, including Germany. According to the “Financial Times”, insiders hope that this stage can be completed so that aid can be transferred by March at the latest.
Money for pensions, salaries and infrastructure
The EU intends to use the financial aid to enable the Ukrainian state to pay salaries and pensions. In addition, the operation of hospitals, schools and emergency accommodation for resettled people must be guaranteed. The money can also be used to repair and rebuild infrastructure destroyed by Russia's war of aggression. These include power lines, water systems, as well as roads and bridges.
For this reason, in 2023 the EU transferred a total of 18 billion euros to Kiev. Despite the ongoing war, payment is linked to 20 reform commitments and reporting obligations. For example, they are concerned about the rule of law and the fight against corruption. Ukraine has up to 35 years to pay back the money, which is expected to start in 2033. Interest costs are borne by EU member states.