EU Agrees $54 Billion Aid Package For Ukraine

Paresh Jadhav

11 months ago

At first, only Hungary’s Viktor Orban had stood in the way of EU aid to Ukraine; but with an important summit meeting taking place this week, this issue has come into sharp focus.

Goal of Thursday dinner meeting among EU leaders to reverse Budapest’s rejection of multiyear aid package

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Ukraine’s Prime Minister Denys Shmygal

BRUSSELS Ukraine’s war-ravaged leaders now have access to financial assistance from the EU as they attempt to cut ties with Russia and move closer towards Western institutions. A deal announced Thursday gives Kyiv four-year top-up payments to a European fund, even though Hungary had threatened to block it due to budgetary concerns within Europe.

Ukraine was taken by surprise when EU officials made this unexpected but significant decision, providing it with much-needed stability and pressure against Moscow. EU officials believe continued support is essential to long-term stability as well as to putting Russia under pressure.

Leaders also agreed to begin discussing an EU top-up of funds intended to cover unexpected expenses, a significant victory for Ukraine which had feared losing public support if EU aid plans became hostage to domestic US politics. Their decisions on both issues came as an unexpected surprise since all EU member countries must agree.

Ukraine’s President Volodymyr Zelenskyy

Zelenskyy said he expected that this agreement will secure “steadfast, long-term, predictable funding” for Ukraine. Furthermore, all 27 EU leaders participated in reaching this decision demonstrating strong EU unity on this matter.

Since taking office, Zelenskyy has seen numerous visits from European leaders. Recently he met German Chancellor Angela Merkel in Kyiv’s liberated suburbs and received a call from NATO Secretary-General Jens Stoltenberg to discuss Ukraine’s future.

Kyiv will benefit greatly from a new financial support package to strengthen its military capabilities, particularly intelligence gathering and defense industrial cooperation. However, EU leaders must work out how this can be supplemented by their on-paper security guarantee which commits member states to aid fellow member states that have fallen prey to an armed attack. They will need to address key challenges, such as creating multinational or regional military coalitions willing to manage high intensity crisis management operations.

Hungary’s Prime Minister Viktor Orban

EU leaders vowed to extend Ukraine a lifeline despite opposition from Hungary, where Prime Minister Viktor Orban has maintained close ties to Russian President Vladimir Putin. Passage at an EU summit requires unanimity but leaders signaled their readiness to compromise Europe’s unity by working around Orban’s opposition.

Orban voiced his disapproval of Ukraine aid package in December, claiming that any money should come directly from his bloc’s budget since Ukraine isn’t part of their membership. His objection was overridden by all 26 other members whose approval is required in order to release funds.

Budapest then submitted another proposal to Brussels, offering to use the bloc’s budget and issue common debt to fund aid, provided there are annual reviews. Unfortunately, that wasn’t sufficient for Brussels; which warned Hungary it could impose sanctions if Orban blocked aid.

European Commission President Jean-Claude Juncker

Jean-Claude Juncker has long championed greater EU integration. From 2005 to 2013, he served as Finance Minister in Eurogroup before taking on his current post as European Commission President in 2014.

He was widely criticized for tax-avoidance schemes while leading Luxembourg, yet praised for his efforts in combatting Europe’s sovereign debt crisis and condemnation of Russia’s actions in Ukraine.

EU leaders gathered Thursday for a special summit to ratify Ukraine a new aid package after Hungary threatened to use its veto power, in one hour of meeting, according to European Council President Charles Michel. Zelenskyy described this agreement as “very important”.

Orban has insisted upon an annual review which could prevent funds from flowing; he claims this represents political blackmail, as it would be undemocratic for the EU to make such demands.