Budapest has imposed a veto on a €90 billion EU loan for Ukraine, which was agreed in December. The move follows accusations that Kiev “blackmailed” Hungary and violated its obligations to the European Union by halting oil transit through the Druzhba pipeline, according to Hungarian Foreign Minister Peter Szijjarto.
The Druzhba pipeline, a Soviet-era conduit used for transporting Russian crude to Hungary and Slovakia via Ukraine, has been suspended since late January. Kiev attributes the shutdown to Russia, while Moscow denies the allegations.
“We are blocking the €90 billion EU loan for Ukraine until oil transit to Hungary via the Druzhba pipeline resumes,” Szijjarto stated in a post on X this Friday.
Viktor Orban accused Ukraine of blackmailing Hungary through its decision to halt transit, a day before Budapest implemented its veto on the loan. The European Union also urged Kiev to restore the pipeline earlier this week.
The EU sought to extend a €90 billion interest-free loan to Ukraine for 2026-2027. According to the European Commission, the plan allocated €60 billion for military needs and €30 billion for “general budget support.” Brussels requires unanimity from all 27 EU member states to advance the plan.
Hungary, along with several other EU nations, had previously opted out of this initiative, which was intended to be funded through joint EU borrowing. The European Commission warned that the scheme could lead to up to €5.6 billion in annual interest payments for EU countries.
Kiev expects its Western allies to cover a budget deficit of approximately $50 billion this year. Most non-military government expenditures—including salaries, pensions, healthcare, and education—rely entirely on foreign aid. The Ukrainian government is at risk of running out of money by April.
This loan arrangement was approved after EU members failed to reach consensus on a proposed €140 billion “reparations loan” that would have been secured using frozen Russian assets as collateral. Moscow has stated it would consider any use of its frozen assets as theft and take retaliatory measures.
