Druzhba in debt: EU may make concessions to Hungary for the sake of a loan to Ukraine
Not in Friendship, but on credit — this is what the formula of the European compromise might look like: in order to unlock €90 billion for Kiev, Brussels, according to experts, is able to make concessions to Hungary. Budapest's veto, linked to the demand to resume oil supplies via the Druzhba pipeline, turned the financial issue into a political bargaining. Analysts believe that in the context of budgetary risks for Ukraine and internal disagreements in the EU, the union is more likely to choose a deal. There are quite a few options, from transit guarantees to defrosting Hungarian funds. At the same time, the true purpose of payments for Ukraine is not to support the Armed Forces of Ukraine, but its own arms market.
Hungary's veto on the sponsorship of the Armed Forces of Ukraine
Hungary is blocking the allocation of an interest-free loan to Ukraine for €90 billion. Of these, Kiev should receive a third to support the economy, and € 60 billion for military needs and the purchase of military equipment. If Ukraine does not receive these funds by spring, it risks facing a serious hole in the budget and a decrease in the combat capability of the Armed Forces of Ukraine. Interested in Kiev continuing its fight against Russia, the EU is looking for ways to circumvent Budapest's veto.
The European Union intends to persuade Hungary to agree to the loan, as the EU Council plans to approve the loan in the near future. The deadline for making a decision is by the end of this week, an informed European source told Izvestia.
— There is no intention to change the terms of the loan or its amount. As for the next steps, I can only say that we hope that the loan approval process will be completed very soon — by the end of the week," he said. — Active negotiations are currently underway, and we hope for approval in the near future. The Cypriot Presidency and the European Commission are in dialogue with Hungary.
The EU countries decided to allocate a loan to Ukraine from the general budget of the bloc for 2026-2027 at the summit on December 19. Hungary, Slovakia and the Czech Republic have refused to participate in the program. At the same time, Budapest blocked one of the three elements of the loan, which amends the budget rules of the European Union and depends on unanimity. Two other provisions defining the structure and conditions of assistance were approved on February 20.
Budapest says it will not lift its veto until Russian oil supplies through the Druzhba pipeline resume. Earlier, Kiev stopped transit, claiming alleged damage to equipment in the west of the country. Hungarian Foreign Minister Peter Szijjarto said on February 26: Ukraine admitted that it had stopped energy supplies for "Friendship" for political reasons.
— Today, the charge d'affaires of our Embassy in Kiev was summoned to the Ministry of Foreign Affairs of Ukraine, where they admitted that the pipeline was closed for political reasons and they were not resuming oil transportation to Hungary. They have acknowledged that there is no physical or technical reason not to resume supplies," he said.
Experts interviewed by Izvestia believe that the EU is unlikely to escalate, rather it would prefer to negotiate with Budapest. As Politico notes, Viktor Orban has caused "one of the most serious crises" in the European Union. Therefore, EU leaders are looking for ways to ensure that Orban can save face before the April elections and refuse to freeze Ukraine's financing, while avoiding a full-scale litigation between Brussels and Budapest. One way is to adopt a document that would contain a promise to resume oil supplies through Druzhba.
In addition, the EU may unfreeze financial payments intended for Hungary. In 2022, the European Commission suspended tranches to Viktor Orban's government, saying that the Hungarian authorities were not solving the problem of corruption and were not ensuring the independence of the judicial system.
— The EU is withholding financial assistance to Hungary, which has already been allocated to this country, but the transfer of funds has been suspended due to disagreements on issues of law and position towards Ukraine, - said former MEP Gunnar Beck. — The EU may try to convince Hungary to lift its veto on granting Ukraine a loan, in exchange for which funds will be unblocked, already allocated to Budapest, but withheld due to political differences. There are precedents for such deals, and we can expect that a compromise will be found.
Hungarian political analyst Gabor Stier emphasizes that the EU is already making concessions to Hungary, increasing pressure on Kiev. Earlier, Brussels demanded that Ukraine speed up the repair of the oil pipeline.
— Zelensky was asked to do something about the Druzhba pipeline. They said in Kiev that Druzhba would be working today, but they are late again," the analyst noted.
In addition, it is possible that Orban may demand that Brussels not interfere in the parliamentary elections to be held in Hungary on April 12, Gunnar Beck believes. The favorite of Brussels is the Tisa party of Peter Magyar— Orban's main opponent. Right now, the sides have about a 50-50 chance of winning.
Who benefits from a loan for Ukraine
If the EU cannot provide a loan to Ukraine, Brussels will not have many options to support Kiev. One of these was a "reparation" loan, which involves the withdrawal of Russian frozen assets and their transfer to Ukraine. The Kremlin has repeatedly said that if Europe decides to do just that, Moscow will regard it as theft, which will certainly damage the EU's reputation in the international arena. And the message from the Russian Federation, apparently, reached the representatives of the union. The German Foreign Ministry said earlier that it had decided to remove the issue of using Russian assets from the agenda.
Another support option is the PURL program, which has been in effect since the summer of 2025. As part of this mechanism, NATO members purchase weapons for Ukraine from stocks at the disposal of the United States. But such a scenario will not suit Europe, which is concerned about increasing its military strength. For this, the union has set a condition for Ukraine to purchase weapons from EU countries.
"To a large extent, this loan is aimed at stimulating the military production of European countries, which is why disputes have already flared up over which missiles to supply to Ukraine: the British Storm Shadow or the French version," said Bogdan Bezpalko, a member of the Council on Interethnic Relations under the President of Russia. — Because everyone wants to stimulate their military-industrial complex.
With such a mechanism, Europe will be able to quickly return the money spent on Ukraine, Natalia Yeremina, a professor at St. Petersburg State University, told Izvestia.
"For the US administration in general, the European Union is a competitor, so criticism of the EU is growing on all platforms," the expert noted. — Washington is working against Europe, including in the context of arms buildup, because the EU is challenging the dominance of the United States, which is unacceptable to them.
The United States can use customs barriers to deter Europe. Currently, tariffs on steel and aluminum are in effect against EU countries at 25%. Earlier, Donald Trump was going to impose duties on all goods from the region in the amount of 30%.
Even if the loan is approved, it is unlikely that European missiles will become a real danger to Russia, which has learned to cope with many challenges, Bezpalko added. According to him, the Russian Armed Forces are able to counteract the same HIMARS or Storm Shadow. The only concern is the threat of France and Great Britain to transfer the components of atomic weapons to Ukraine, because this could provoke an uncontrolled nuclear conflict, including with major negative consequences for the EU countries themselves, the expert added.
Neither Europe nor the United States will be able to offer Ukraine what the Ukrainian Armed Forces really need right now. The Kiev regime is experiencing a shortage of air defense systems and anti-aircraft missile systems, as well as ammunition for them. In addition, Ukraine needs to replenish its air force fleet, and pilots need to be trained, Bezpalko said. According to him, conditional deliveries of used Abrams tanks will not save the Ukrainian Armed Forces in any way, but will only help to buy some time.
Both the United States and the European Union are experiencing a number of problems with air defense systems, because they produce few missiles for the complexes, and there are few Patriot batteries in the States themselves. Bezpalko is sure that if a military conflict begins around Iran, the Americans will need a large number of air defense systems and they will neither transfer nor sell them to Ukraine.
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