Ukraine funding, Orban’s opposition set to dominate crucial EU summit

European Union leaders are preparing for a crucial meeting that will be dominated by a second attempt at passing a 50-billion-euro ($54bn) amendment to the EU budget that will help finance Ukraine over the next four years.

That amendment was vetoed by Hungary at December’s regular summit along with 20 billion euros ($21.7bn) in military aid to Ukraine for 2024.

The EU’s executive, the European Commission, is reportedly hoping to bring Hungary on board at Thursday’s meeting by offering Prime Minister Viktor Orban an opportunity to block a continuation of the support next year when the EU would evaluate whether Ukraine still needs the money and meets requirements to receive it.

EU support has been key to Ukraine’s war effort.

The bloc has spent more than 40 billion euros ($43bn) to support Ukraine’s budget and 27 billion euros ($29bn) in military aid since the war began almost two years ago in addition to 17 billion euros ($18.4bn) supporting millions of Ukrainian refugees in Europe.

This year, Ukraine’s budget faces a $48 billion shortfall.

There is a more coercive approach.

This month, the European Parliament condemned Orban’s December veto and asked the European Council of EU government leaders to investigate Hungary for “serious and persistent breaches of EU values”.

That obliges the council, which still wields ultimate power in the EU, to invoke proceedings that could ultimately suspend Hungary’s voting rights and deprive it of its veto.

But Europe initiated such proceedings, known as Article 7, against Hungary in 2018, and they failed because the system requires unanimity in the council and Poland supported Hungary.

Poland has a new, centre-left government that is friendly to Ukraine and no longer aligned with Orban, but Slovakia last year brought Robert Fico’s Smer Party to power to Orban’s undisguised delight.

Both men are Eurosceptics and share an adversarial relationship with Brussels. Fico immediately ceased supplying military aid to Ukraine upon taking office and this month voiced his support for Orban.

“I will never agree that a country should be punished for fighting for its sovereignty. I will never agree with such an attack on Hungary,” he said in a joint press conference with Orban.

‘It won’t go through’

“Article 7 would need a consensus that every member state would support it, but Slovakia won’t, and almost certainly the Netherlands won’t. So I would argue that it won’t go through,” University of Helsinki lecturer in Eastern European studies Katalin Miklossy told Al Jazeera.

The top vote-getter in Dutch parliamentary elections last year was the party of far-right leader Gert Wilders, who has yet to form a government but has also said aid to Ukraine should be cut.

EU members could continue to provide aid through a special vehicle that lies outside their regular budget, something Orban has said he would not oppose, or by allowing member states to help Ukraine bilaterally.

These approaches have disadvantages. They are more expensive and deprive the EU of a single voice in foreign policy, making it appear weak as war rages on European soil. They fail to address problems in Hungary itself, which the European Parliament described as an “electoral autocracy” that defies EU values. It has already seen 30 billion euros ($32.5bn) in EU aid suspended for manipulating the judiciary and suppressing free speech and minority rights.

Most importantly from a practical point of view, these approaches do not lock in the aid at a time when the EU is mostly comprised of governments and a European legislature willing to help Ukraine. Many observers expect European Parliament elections in June to produce a legislature less well-disposed towards Kyiv – and that could be what Orban is banking on.

“Victor Orban reads the cards right, unfortunately,” Miklossy said. “He understands the wind in the EU is changing. There are more and more voices in the EU that want the Ukrainians to just sit down at the table and negotiate peace with the Russians because we cannot afford to support Ukraine forever.”

In this view, Orban lies in wait for a Eurosceptic government in Austria this autumn, where the far-right Freedom Party has led polls for a year, and in Germany next year, where the far-right Alternative for Germany has doubled its following in the past 18 months and now comes second in polls to the Christian Democratic Union.

Orban may be right about European trends, according to a poll the European Council on Foreign Relations (ECFR) published this month. It found that climate change, pandemics, immigration and fears of global financial instability all trounced Ukraine as existential fears in nine European countries polled.

“Our worry was that there will be politicians that would surely try to follow the trend and would be outspoken about the need to stop supporting Ukraine because they believe this is the way the trend is going and where they can find future voters,” the ECFR’s Pawel Zerka told Al Jazeera.

Scaling down support?

Orban, Fico and Wilders have all posed as peacemakers.

In a May 2022 poll, the ECFR found a larger group of Europeans in favour of peace at the cost of partitioning Ukraine than in favour of justice whereby Ukraine would fight to regain all its lands.

In March last year, the justice camp beat the peace camp 38-29. The ECFR attributed this to Ukraine’s battlefield successes, unity of the left and right on Ukraine, and the strength of US leadership.

Now the pendulum appears to be swinging back in the peace camp’s favour, Zerka said, because two of those factors, the US role and battlefield success, “have started to evaporate”.

Like the EU, the US has delayed approving military aid for Ukraine this year.

British historian Mark Galeotti agreed that the US factor is key.

“I think that if the Americans start to genuinely scale down their support for Ukraine, it will be an excuse for a lot of European countries to say, ‘Well, there’s nothing much we can do,’ rather than thinking, ‘We should actually rise to the challenge. This is, after all, our continent,’” Galeotti recently told the podcast Futucast.

Hungary has made different choices

For Hungary, at least, opposition to Ukraine is about more than picking up votes.

Hungary has been wooing Chinese and Russian investment since Orban came to power in 2010.

In 2013, Hungary became the first country other than China to sell a renminbi-denominated bond on the international market. Four years later, it became the first Eastern European country to sell a renminbi bond in China itself.

Placing itself in financial parlance with China paid dividends, Jens Bastian, a fellow with the German Institute for International and Security Affairs, told Al Jazeera.

“[Hungary and Serbia] are the leading recipients of Chinese foreign direct investment in 2023 in Central and Eastern Europe,” Bastian said.

China is building and partly financing a Budapest-Belgrade high-speed railway. Chinese electrical vehicle battery manufacturer CATL is investing $7.6bn in the Hungarian city of Debrecen for the construction of a battery plant.

“It would be Europe’s largest electrical battery facility. It would be CATL’s single-largest overseas investment and its second facility in Hungary,” Bastian said.

As it invests in a manufacturing economy, Hungary seeks cheap energy, Miklossy said, and is one of a group of landlocked EU members (with Slovakia, Austria and the Czech Republic) that successfully fought for exemptions from a 2022 ban on Russian oil imports.

Some of these countries, Bastian said, amount to “an axis of the unwilling among EU and NATO members who are in effect doing Putin’s bidding”.

For example, in addition to vetoing Ukraine aid, last month Orban also forced Bulgaria to lift transit fees on Russian gas bound for Serbia and Hungary.

But what looks like economic interests also has political importance, Bastian said.

“They are showing the EU, multilateral organisations like the European Bank for Reconstruction and Development, the International Monetary Fund, the European Investment Bank, ‘We are looking for and are successfully finding alternatives.’”

Why? Because “Orban and Fico want to see a very different EU … not based on rule of law,” Tymofiy Mylovanov, director of the Kyiv School of Economics, told Al Jazeera.

“It’s … a collection of countries with authoritarian populist leaders. They don’t want to exit the EU. They want to change the rules. They don’t want to play by the Brussels rules.”