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Ukraine Aid Can Cause Dangerous Escalation in the EU Funds Debate

Mariann Őry 2022.11.14.

According to media reports, the European Union wants to use funds dedicated to Hungary to support Ukraine. Budapest has already indicated that it wants to support Ukraine on a bilateral basis, not through another joint EU borrowing.

“With the joint borrowing plan, the European Union wants to transfer Hungarian funds to the Ukrainian government,” the economic portal VG.hu wrote, adding that this is completely unjustified.

The European Union and its financial institutions have so far disbursed almost 5 billion euros in loans to Ukraine between 2014 and 2021, VG.hu noted. In addition, the European Council agreed in May to disburse a further 9 billion euros in financial aid to Ukraine in response to the outbreak of war.

Ukraine received 1 billion euros of the latter in August. At their last meeting, EU finance ministers pledged a further 5 billion euro loan, which could be followed by another 3 billion euros later this year.

This means that Ukraine’s support for this year is fully covered, so the European Commission’s call for an 18 billion loan is unjustified,

the news portal explained.

Hungary is dedicated to supporting Ukraine, and in the 2023 budget the government has earmarked the amount that Hungary would receive from the 18 billion euros proposed by the European Union, VG.hu pointed out. The government is ready to make a bilateral agreement with Ukraine.

Recently, both Foreign Minister Péter Szijjártó and Finance Minister Mihály Varga said that Hungary would reject another joint borrowing, but would continue to support Ukraine on a bilateral basis, through government to government agreements, that is.

Hungary Rejects Joint EU Borrowing to Aid Ukraine
Hungary Rejects Joint EU Borrowing to Aid Ukraine

We are ready to continue financial support on a bilateral basis, Foreign Minister says.Continue reading

Hungary’s experience with joint borrowing is not good: Mihály Varga also pointed out that during the coronavirus epidemic, Hungary had already agreed to an EU joint borrowing, in order to maintain EU unity, despite its opposition in principle. The European Union is withholding substantial sums from Hungary, both from the recovery fund (RRF) and from the next seven-year budget (MFF).

It is clear that EU funds Hungary is entitled to would be paid to Ukraine by Brussels. This is, of course, unacceptable for Hungary, and the Hungarian government does not support these plans,

the Government Information Center (KTK) stated, according to VG.hu’s article.

In case this conclusion is correct, it means a dangerous escalation in the row about the EU funds and the relationship between the Hungarian government and the European Commission.

Featured photo via the European Commission

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