Leaked EU documents have shown the bloc’s plan that would weaken Hungary’s economy if it continues to veto the bloc’s €50 billion ($51 billion) aid package for Ukraine during the upcoming summit on Feb. 1, as reported by the Financial Times (FT).
This would be done by blocking funds intended for Budapest from all EU member states.
Citing an internal EU document, the FT said the bloc would disrupt Hungary’s plans for “jobs and growth” by jeopardizing its national currency exchange rate and reducing foreign investment confidence in the country if Viktor Orbán, Hungary’s pro-Russian prime minister, does not back down from his constant vetoes.
The document also outlined Hungary’s vulnerabilities, including its “very high public deficit,” its “very high inflation,” its weak currency and holding the EU’s highest level of debt servicing payments measured as a proportion of gross domestic product.
The document said that a full cut in EU funding to Budapest would hamper foreign investment in the nation, which could “quickly trigger a further increase of the cost of funding of the public deficit and a drop in the [value of] the currency.”
An EU Council spokesperson said they did not comment on leaks in response to an FT inquiry, while three EU diplomats told the FT that many member states are behind the plan.
The drastic move from the EU came as a result of Hungary’s continuing veto against funding for Ukraine, which it has tried to use as a bargaining chip for its own economic benefits, to the dissatisfaction of other EU leaders.
Orbán also holds a pro-Russian stance that contradicts the EU’s position on the war in Ukraine, and he often uses the Kremlin’s term for describing the war in Ukraine as a “special military operation.”
János Bóka, Hungary’s EU minister, said Budapest was unaware of the plans but added that Hungary had already proposed a compromise.
Bóka said Budapest had sent a new proposal to Brussels on Saturday saying that it was open to using the EU budget for the Ukraine package and issuing common debt to finance it if Budapest would have the opportunity to change its mind later.
He described the move as “blackmail” in a social media post.
“#Hungary does not make a link between the support for #Ukraine and access to #EU funds and rejects other actors doing so. Hungary has been and will continue to participate constructively in the negotiations, but will not give in to blackmail,” he said.
However, Hungary has stalled Western aid for Ukraine multiple times, and Orbán said in December that nothing would sway his opposition to future aid to Ukraine.
Some nations have discussed the possibility of invoking Article 7 of the Treaty on the European Union and stripping Hungary of its voting rights, but the severity of the decision has, so far, deterred many member states.
Uzhhorod is the administrative center of Ukraine’s Zakarpattia region in the west, which has a large ethnic Hungarian population where far-right figures in Hungary have frequently laid claims to its sovereignty.
László Toroczkai, leader of the Hungarian far-right Mi Hazank party, said yesterday that Hungary would annex Zakarpattia if Ukraine loses the war against Russia.
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