Hungarian Prime Minister Viktor Orbán is poised to throw a significant wrench into the European Union’s plans to assist Ukraine, as he seeks to align with former U.S. President Donald Trump ahead of the 2024 U.S. election. Orbán’s actions threaten to disrupt a $50 billion loan package, designed to support Ukraine in its ongoing war with Russia, and could have far-reaching consequences for both the EU and transatlantic cooperation.
At the heart of this issue is a proposed change to EU sanctions rules, which would extend the renewal period for sanctions from six months to 36 months. This extension is crucial to prevent any single EU member state from blocking the continued freezing of Russian assets that were seized following the invasion of Ukraine in 2022. The loan package, which is to be repaid using profits from the immobilised $250 billion of Russian assets, is a joint effort by the U.S., the EU, and G7 nations. However, Orbán is refusing to support the necessary rule changes, effectively stalling the process.
Orbán’s Alignment with Trump
This move appears to be more than just a technical objection over sanctions rules—it signals a clear political alignment between Orbán and Trump. If Trump were to win the U.S. presidential election in November, Orbán’s stance would allow Trump to withdraw U.S. financial support for Ukraine without bearing responsibility for the $50 billion loan. Trump, who has been vocal about his reluctance to continue funding Ukraine’s defence, could use this development to solidify his position among Republican voters.
Hungary has made it clear that it will not agree to the rule changes until after the U.S. election, a decision that could benefit Trump if he returns to the White House. By blocking U.S. participation in the loan, Orbán effectively shields Trump from any obligation to service the debt, enabling the former president to make good on his promise of not sending “another cent” to Ukraine.
The Financial Impact on the EU
Orbán’s refusal to support the sanctions extension leaves the EU in a difficult position. If the U.S. does not participate in the loan, European states will be left to shoulder the financial burden alone. The loan would still proceed, but the EU would be forced to cover the shortfall, leading to higher costs for member states, including Hungary itself.
An EU diplomat, speaking anonymously, acknowledged that the financial consequences for Europe would be significant but noted that Hungary seems unconcerned.
“They don’t care if Europe has to pay more,” the diplomat said. “It’s about helping Trump.”
This obstructionism is not new for Orbán, who has previously aligned himself with Trump’s policies and has positioned Hungary as a dissenting voice within the EU on several key issues. Orbán’s most recent visit to Trump in July at Mar-a-Lago further underscores the close relationship between the two leaders, who share similar views on Ukraine.
A Strategic Move
For Orbán, the benefits of helping Trump outweigh the financial costs to Hungary and the EU. His actions are seen as part of a broader strategy to gain favour with a potential second Trump administration, which could prove advantageous for Hungary in future diplomatic and economic dealings. Orbán has not hidden his support for Trump’s re-election, telling journalists that he would be celebrating with “several bottles of champagne” if Trump defeats Kamala Harris in November.
The timing of Orbán’s veto threat is critical. Ukraine is facing a harsh winter, with Russian forces expected to target the country’s energy infrastructure. Fresh funding from Western allies is essential for Ukraine to maintain its war effort and keep its government functioning. By holding up the loan, Orbán is not only jeopardising financial support but also potentially weakening transatlantic unity at a pivotal moment.
U.S. and G7 Response
Despite Hungary’s obstruction, the U.S. has signalled it may still contribute to the loan, albeit at a lower level. A U.S. contribution of $5 billion—roughly equivalent to the amount of Russian assets frozen on American soil—has been floated as an option, which would leave Europe to fund the majority of the package. However, this reduced participation would still shift a greater financial burden onto the EU.
Japan, a key G7 member, has also indicated that it might withdraw from the loan if the U.S. does not fully participate. This has added another layer of complexity to the situation, as G7 finance ministers are expected to finalise the loan’s details at the end of October.
EU Summit and Next Steps
The EU is expected to press ahead with the loan, even if the U.S. contribution is reduced or delayed. EU leaders will meet in Brussels this week to discuss the issue, with a focus on finalising the payment before the year’s end. The European Commission is fast-tracking legislation to ensure up to €35 billion is available to Ukraine, covering the shortfall created by the lack of U.S. involvement.
While some EU governments are reluctant to increase their contributions, there is growing pressure to ensure the loan is approved in time to support Ukraine through the winter. As one EU diplomat noted, the situation has become a “game of chicken,” with Orbán holding firm in his refusal to budge on the sanctions issue.
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