Brussels proposes EU support plan for Ukraine, Hungary says ‘no’

Brussels proposes EU support plan for Ukraine, Hungary says 'no'

BRUSSELS: The European Union’s executive arm on Wednesday (Nov 9) proposed a support package for war-gripped Ukraine worth up to €18 billion (US$18.06 billion) in 2023, but Hungary said it would not contribute to the joint assistance, which would come as highly concessional loans.

“This shows true solidarity of the EU,” Ukrainian President Volodymyr Zelenskiy tweeted after the European Commission unveiled its plan. “Together we resist Russia’s aggression, together we’ll rebuild Ukraine, together we’ll be in the EU.”

However, the proposal faced resistance from Hungary, which has dragged its feet on EU sanctions against Russia over its invasion of Ukraine, even before the Commission’s announcement.

“I have made it clear that Hungary is ready to support Ukraine, but we do not wish to contribute to any new loan to be taken up by the EU,” Finance Minister Mihaly Varga said in a statement on Tuesday.

The Commission said the EU support, averaging €1.5 billion per month, would help cover much of Ukraine’s short-term funding needs for 2023, which Kyiv and the International Monetary Fund have estimated at €3-4 billion per month.

It would help Ukraine ensure macro-financial stability, keep critical public services running and assist with the restoration of key infrastructure destroyed in the war with Russia.

To secure the funds for the loans, which Ukraine will have to repay within 35 years, the Commission would borrow on the capital markets.

Its proposals for the package will need to be approved by the European Parliament and the EU’s 27 member states.

Gergely Gulyas, chief of staff for Hungarian Prime Minister Viktor Orban, said Budapest was willing to pay its share of financial support for Ukraine but would rather pay it bilaterally than see more of the joint borrowing that the EU agreed on to prop up its economies during the COVID-19 pandemic.

“Now they ask us again to approve something that we had never agreed with in principle,” he told a news briefing in Budapest. “There is joint decision making, so if we don’t agree to this, this decision cannot be made.”

Orban, a conservative nationalist, is one of the few European leaders to have good relations with Russian President Vladimir Putin.

Asked about Hungary’s stand on the Ukraine proposal, European Commissioner Valdis Dombrovskis told a news conference: “We will be discussing … what concerns Hungary has in relation to this proposal, and I hope we will come up with a solution.”

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