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The European Union has encountered a serious impasse after Hungary unexpectedly used its veto to halt a €90 billion financial instrument intended to support Ukraine. The move, timed around the fourth anniversary of Russia’s large-scale invasion, also delayed approval of a separate package of sanctions on Russia. EU officials and several member states reacted sharply, accusing Budapest of undermining collective decisions and of breaching the principle of sincere cooperation enshrined in EU treaties.
At the heart of the dispute lies an energy disagreement linked to the Soviet-era Druzhba pipeline, which connects Russian crude flows across multiple countries and was damaged in late January after a drone attack. Hungary, joined by Slovakia and the Czech Republic in seeking specific exemptions, says interruptions to deliveries have jeopardized its energy security. Kyiv and other EU capitals dispute Hungary’s claims and warn that using unrelated grievances to block a major support package sets a dangerous precedent.
What was blocked and why it matters
The package pending adoption had been negotiated by EU leaders and included three legal elements defining the loan’s structure, conditions and budgetary rules. Hungary vetoed the element that would modify EU budgetary rules and thereby unlock the instrument. The remaining measures were approved, but without unanimous consent they cannot put the full package into effect. EU officials stress that the loan would cover a substantial portion of Ukraine’s budget needs for the next two years, funding public services and military expenditures tied to defense and reconstruction.
Beyond immediate financing, the stalled decision has geopolitical consequences. Observers warn that a delay could weaken Ukraine’s negotiating position in parallel discussions involving the United States and diplomacy with Russia. The impasse also revives calls to revisit the EU’s reliance on unanimity for sensitive foreign policy and fiscal matters — an arrangement that allows a single member state to block collective action.
Energy dispute: the Druzhba pipeline and the competing claims
Budapest has pointed the finger at Ukraine for allegedly refusing since mid-February to restore crude transfers through the Druzhba corridor, citing political reasons and alleged breaches of international obligations. Hungarian Prime Minister Viktor Orbán argued that the interruption exposes Hungary to supply shocks. Kyiv rebutted those charges, saying emergency repairs are under way but that ongoing Russian bombardment complicates the work. Ukraine has proposed rerouting supplies via the Odessa-Brody line and maritime alternatives as interim solutions.
Diplomatic responses and accusations
EU foreign policy chief Kaja Kallas described Hungary’s action as regrettable and inconsistent with the treaty obligation of mutual cooperation among member states. António Costa, President of the European Council, wrote to Prime Minister Orbán insisting that decisions struck by the 27 leaders are binding and that no single state should erode the Council’s credibility. French President Emmanuel Macron echoed those sentiments, stressing that political commitments reached at summit level must be honored.
Calls to change the rules
Several ministers urged a rethink of unanimity rules to prevent what one Baltic diplomat called the exploitation of veto power. Voices from Germany, Sweden and Lithuania called the Hungarian double veto — on both the loan element and a sanctions component — unacceptable. Some EU representatives suggested procedural fixes or legal avenues to ensure critical assistance to Ukraine can proceed even if isolated members object on unrelated grounds.
Implications and next steps
EU leaders and diplomats are now seeking pragmatic routes to unblock support. The Commission convened relevant working groups, including a oil coordination group, to examine short-term energy contingencies and technical solutions. Meanwhile, political leaders plan bilateral and multilateral discussions aimed at persuading Budapest to withdraw or amend its objections. The controversy also injects domestic politics into the picture: observers note that Hungary faces upcoming elections, and some EU counterparts suspect the veto timing could be partially driven by internal electoral calculations.
Ukrainian officials appealed directly to fellow EU capitals, urging constructive engagement and warning against allowing two member states to hold the entire bloc “hostage” over an issue they view as rooted in broader aggression by Russia. As negotiations continue, the episode underscores the tension between national prerogatives and collective action within the EU when confronting a major security crisis on Europe’s doorstep.
Whatever path Brussels chooses, the dispute has already highlighted three fragile realities: the EU’s dependence on unanimity for some foreign policy instruments, the vulnerability of cross-border energy networks during wartime, and the political leverage a single member state can wield — intentionally or not — over bloc-wide measures aimed at supporting a partner under attack.