Putin’s old EU ally Orban is once again aggravating Brussels with knockbacks

Hungary is blocking new financial support for Ukraine as the country attempts to wrestle free its own EU funds, with nationalist leader Viktor Orban once again ruffling feathers in the heart of Brussels.

The European Commission, the executive arm of the EU, in November proposed an 18 billion euro ($18.9 billion) package for the war-torn nation. The funds are supposed to be disbursed regularly throughout 2023. But, Hungary was the only nation among the 27 EU states to veto the plan.

Hungary Prime Minister Orban, often seen as a scourge to EU politics with once-warm relations with Russian President Vladimir Putin, took to Twitter on Tuesday. “Today’s news was all about Hungary vetoing financial assistance to Ukraine. This is fake news. Hungary is ready to give financial assistance to Ukraine, on a bilateral basis. No veto, no blackmailing,” he said.

But Brussels disagrees. Some EU officials believe Budapest’s vote was an attempt to force through its own EU funding. An EU official, close to the ministers’ talks and who did not want to be named due to the sensitivity of the issue, told CNBC: “They [Hungary] will deny it, [but] they want to create leverage and are taking two files under hostage.”

On top of the additional funding for Ukraine, Hungary is also preventing the approval of new tax rules across the EU. This comes at a time when 7.5 billion euros reserved for Hungary has been frozen and another 5.8 billion euros is also on hold until it takes action to address concerns over the independence of its judiciary. Without progress on these reforms before the end of this year, Hungary might even lose a sizeable chunk of the latter cash sum.

“Hungary is blocking [money to Ukraine] with no reasons,” a second EU official, who did not want to be named due to the sensitivity of the issue, told CNBC. “There is no appetite from the other 26 [countries] to be helpful,” the same official added.

The other 26 EU nations are trying to bypass Hungary’s opposition and send the additional funding to Ukraine anyway. “We are doing our utmost to ensure the money can be disbursed at the beginning of January, our utmost, whether that’s plan A or plan B at whatever price, we have to do that,” Czech Finance Minister Zbyněk Stanjura said at a press conference Tuesday.

Details are still being worked out, but tensions over European funds highlight the often difficult relationship between Hungary and the rest of the EU. Hungary has had a controversial relationship with Russia over the years. Just before the Kremlin began its invasion of Ukraine, Orban said at a joint press conference with Putin how they had worked closely together for the last 13 years.

Budapest bought vaccines from Russia during the Covid-19 pandemic and completed energy and commercial deals with Moscow over those years.

But Orban has supported European sanctions against Moscow in the wake of the Ukraine invasion. He’s also challenged some decisions on the divestment of Russian fossil fuels. In fact, Hungary brokered new gas deals with Gazprom, the Russian energy giant, in August.

Ukrainian President Volodymyr Zelenskyy said in November he had just received 2.5 billion euros from the EU. “A strong contribution to the stability of Ukraine on the eve of a difficult winter,” he said, while adding he is now “waiting for the approval of 18 billion euros” for 2023.