EU scrambles to finalise Russia sanctions and Ukraine loan amid Hungarian veto threat

EU unity tested over Ukraine support

Germany, France and several other European nations reaffirmed their steadfast backing for Ukraine on Monday, as diplomats worked to finalise fresh sanctions on Russia and secure a substantial new loan for Kyiv ahead of the fourth anniversary of the war. The conflict, which began on 24 February 2022, has left an estimated 1.8 million Russian and Ukrainian soldiers dead, wounded or missing.

At the same time, EU officials were again attempting to win over Hungary, whose support is needed for the latest measures aimed at increasing economic pressure on Moscow and sustaining Ukraine’s military and financial needs.

Hungary, widely viewed as the bloc’s most Russia-friendly member, warned over the weekend that it could veto both the proposed sanctions package and a major loan designed to support Kyiv over the next two years.

German Chancellor Friedrich Merz marked what he described as “four monstrous years of war” at a pro-Ukraine gathering in Berlin.

“I appeal again to our European partners — do not let up in your support, in our common support, for Ukraine,” Merz said. “We are standing at a crossroads that could decide on the well-being of our whole continent.”

“No one can say today whether the weapons will fall silent in Ukraine in six weeks, in six months or even later," Merz said. “But we are working for them to fall silent as quickly as possible.”

In Paris, French President Emmanuel Macron insisted that “our determination to continue supporting Ukraine is unwavering.” He met Finland’s President Alexander Stubb, another strong supporter of Kyiv, who called on European partners to further increase the pressure on Russian President Vladimir Putin.

EU diplomats grapple with Hungary's objections

Many EU leaders had hoped to move forward on the sanctions and loan before the anniversary of the war's start Tuesday.

But EU foreign policy chief Kaja Kallas said that the foreign ministers of the EU's 27 member states meeting in Brussels would likely not agree Monday on the 20th package of sanctions targeting Russia’s shadow fleet and energy revenues.

Hungary on the weekend threatened to block the sanctions and to obstruct a 90 billion euro ($106 billion) loan for Ukraine which it had previously agreed to, saying it would stand firm until Russian oil deliveries to Hungary resume.

Russian oil shipments to both Hungary and Slovakia have been interrupted since Jan. 27 after what Ukrainian officials say were Russian drone attacks that damaged the Druzhba pipeline, which carries Russian crude across Ukrainian territory and into Central Europe.

Hungarian Prime Minister Viktor Orbán doubled down Monday on an unsubstantiated allegation that Ukraine is deliberately holding back shipments of Russian oil, and accused Kyiv of seeking to topple his government. He referred to the oil supply disruptions as a “Ukrainian oil blockade” led by President Volodymyr Zelenskyy.

“No one has the right to put our energy security at risk,” Hungarian Foreign Minister Péter Szijjártó said as he sparred with journalists in Brussels ahead of the meeting.

Nearly every country in Europe has significantly reduced or entirely ceased Russian energy imports since Moscow launched its full-scale war in Ukraine. Yet Hungary and Slovakia, both EU and NATO members, have maintained and even increased supplies of Russian oil and gas, and received a temporary exemption from an EU policy prohibiting imports of Russian oil.

Raising the pressure on Russia

Some European leaders stressed that the most effective way to get Russia to agree to peace in Ukraine is to raise the cost to Russia of continuing the war.

“This war will only end when Russia no longer sees any sense in continuing it; when Russia can no longer expect more territorial gains; when Russia’s costs for this madness have simply become too high,” Merz said. “We must dry up Moscow’s war financing.”

In Paris, Finland's leader argued that Russia's war in Ukraine was a “strategic failure” as he made the case for ratcheting up pressure on Putin.

“It is also a military failure — he is now losing many soldiers — and, on top of that, it is an economic failure,” Stubb said, speaking in French. “Putin is not winning this war, but he cannot make peace.”

The EU has already sent Ukraine €194.9 billion euro ($229.8 billion) in financial assistance while at the same time squeezing Russia’s key energy exports.

Hungary's looming election hangs over EU talks

Facing a crucial election in less than two months, Orbán has launched an aggressive anti-Ukraine campaign and accused the opposition Tisza party, which leads in most polls, of conspiring with the EU and Ukraine to install what he called Monday a “pro-Ukraine government aligned with Brussels and Kyiv.”

Poland’s Foreign Minister Radosław Sikorski said he believed Hungary’s veto threat could really be about Orbán’s fierce fight to hold onto power.

Orbán, the EU’s longest-serving leader, will face off in April against the greatest challenge to his power since he took office in 2010.

“I would have expected a much greater feeling of solidarity from Hungary for Ukraine,” Sikorski said in Brussels. “The ruling party managed to create a climate of hostility towards the victim of aggression. And then it is now trying to exploit that in the general election. It’s quite shocking.”

Hungary had already agreed in December to the EU loan, and it is unclear how it can backtrack now.

“We must release that. We must find an agreement between the member states because Ukraine needs this money heavily,” said Margus Tsahkna, the foreign minister of Estonia, which on Tuesday will celebrate the 108th anniversary of its independence from then-Soviet Russia in 1918.

(With inputs from AP)