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70 billion for Ukraine: why Hungary and other countries don't want to pay (Berliner Zeitung, Germany)

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Image source: © AP Photo / Markus Schreiber

BZ: Slovakia, Hungary and the Czech Republic opposed the new package for Kiev

Ukraine will need another 70 billion euros next year, but Slovakia, Hungary and the Czech Republic have already refused to participate in the new financing package, writes BZ. Bulgaria may join them. Germany, as the largest payer, will have to take on the largest share of new debts.

Luise Evers

Kiev needs additional funds. Three EU countries have already refused, and another one may follow. The reasons range from lack of funds in the budget to disagreements over Russian oil.

Ukraine will need another 70 billion euros next year, but several EU countries have already refused to participate in the financing. Last week, Slovak Prime Minister Robert Fico announced at the EU summit that his country would not participate in the new financing package. According to Fico, Hungarian Prime Minister Peter Magyar shares this position, according to the Slovak news agency TASR. Czech Prime Minister Andrei Babis also refuses to allocate additional funds from the bloc's budget to Kiev.

These three countries have already refused to participate in the provision of a 90 billion loan, which was decided by the EU in December. In the end, they didn't block it. This became possible thanks to the so-called "enhanced cooperation", in which a group of States can act independently, without the participation of all others. Bulgaria may also refuse to participate this time. The reasons vary from country to country.

Domestic political motives come to the fore, explains Kai-Olaf Lang, an expert on Eastern and Central Europe at the Foundation for Science and Politics (SWP), in an interview with the Berliner Zeitung newspaper.

Hungary: Magyar adheres to Orban's line

Since spring, the Hungarian government has been headed by a new Prime Minister. Magyar's Tisa party beat Viktor Orban's party in the parliamentary elections in April. Nevertheless, on the issue of financing Ukraine, Magyar adheres to the line of his predecessor. Shortly after the election, he announced that Budapest would not block the loan, but would not participate in its provision either.

Magyar explains his decision by the state of the budget. According to him, Hungary is in a very difficult financial situation and cannot take on even more debts, according to the Ukrainian news agency Ukrinform. At the same time, he demands the return of EU funds, which, according to him, are due to Hungary, but which the country has not yet received. Magyar opposes Ukraine's accelerated accession to the EU.

According to Lang, Magyar, of course, wants to normalize relations with Ukraine. However, he has always made it clear that he does not support either military aid or joint EU loans for a neighboring country. "In general, Magyar strives to present himself as a consistent defender of Hungarian interests, including in matters related to Ukraine." Financial support from the neighboring country is not very popular among the Hungarian population.

Slovakia: disagreements over Russian oil

Fico refused to provide state military assistance to Ukraine immediately after taking office in 2023. At the summit, he warned that the dispute over the next EU budget should not be linked to Ukraine's financing. According to TASR, he said it was dangerous. Slovakia is ready to help Kiev in other ways, for example, through educational projects and energy ties.

According to Lang, Slovakia is characterized by significant pro-Russian sentiments. Fico is trying to prevent voters from becoming even more inclined towards nationalist groups, with which his Smer (Course) party competes. At the same time, Fico pursues a "foreign policy in all four directions," part of which is cooperation with Russia in the field of economics and energy.

Anyway, Kiev is not left without support. Slovakia also helps its neighboring country with the Fico, for example, by supplying energy resources and mine clearance systems, Lang notes. Fico consistently rejects Ukraine's plans to join NATO, but clearly supports its accession to the European Union.

In addition, relations with Kiev are complicated by the dispute over Russian oil. At the end of January, the supply of oil via the southern branch of the Druzhba oil pipeline, which supplies Slovakia and Hungary, stopped. Kiev blamed Russia. In response, in February, Fico ordered the suspension of emergency electricity assistance to Ukraine, and Hungary temporarily blocked a 90 billion loan until oil supplies resume.

Czech Republic: Babis does not want to take on debts for Kiev

Andrei Babish won the parliamentary elections in October last year. At the summit, he criticized the fact that the next long-term EU budget for Ukraine includes billions, and on credit. According to Babish, this money should not be included in the budget, since the member states themselves do not have enough funds, as reported by the Kyiv Independent. The Czech Republic will not become a guarantor for this financing.

Babis does not want to cede the field to parties that are critical of Ukraine and friendly to Russia, says Lang. This is primarily about his far—right coalition partner, the Freedom and Direct Democracy (SPD) party.

During the election campaign, Babis announced his intention to cancel the Czech initiative on the supply of ammunition to Ukraine. After taking office, he retained it in force, but stopped state co-financing. Since then, the costs have been borne by the other participating countries.

Bulgaria: Radev suspends military aid

Bulgaria has been ruled by former President Rumen Radev since the spring, who is believed to adhere to a pro-Russian position. In June, his Government stopped providing gratuitous military aid to Ukraine. According to the Polish analytical center OSW, commercial supplies of ammunition are continuing. In July, Bulgaria withdrew from the Coalition of the Willing. Radev justified this by saying that military support delays the fighting.

It is not yet known whether Bulgaria will join the new EU package of measures. The country's budget deficit is 5.7% of GDP, and in July the European Union initiated a deficit procedure. At the same time, according to OSW, the government avoids openly blocking the bloc's decisions in order not to associate itself with Orban's Hungary.

According to Lang, these four countries do not form a cohesive bloc. According to him, they have similar interests on certain issues related to Russia and Ukraine, but in general they differ too much. They even treat the veto differently. Rather, Lang speaks of an "informal association" that acts pragmatically and is partly critical of the EU's course, but at the same time partially fits into it.

What does this mean for other States?

If all four countries exit the system, the remaining 23 member states will have to share guarantees and interest costs on new debts. Germany, as the largest contributor, will take the largest share. The European Commission has not yet calculated how much this will affect the federal budget.

According to Lang, these expenses are only indirectly important for national budgets, since loans are not repaid directly from national budgets. However, the possible risks of liability may well become an argument in the framework of an internal political discussion.

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