Hungary makes fresh demands in exchange for lifting veto on EU financial aid for Ukraine

The envelope, known as the Ukraine Facility, is meant to provide Kyiv with financial assistance between 2024 and 2027 to plug its ballooning public deficit, sustain essential services and pay for reconstruction efforts.

Under the original plan, the Facility was supposed to be already up and running, as Brussels has run out of financial aid for the war-torn nation.

But during a dramatic meeting of the European Council last month, Viktor Orbán waged his veto power to strike down the proposal, which is pegged to a wider review of the bloc's common budget.

It stalled the EU's support at a critical time, as Washington also struggled to overcome Republican opposition to approve a new package of military aid. The impasse on both sides of the Atlantic has put Kyiv in an increasingly precarious situation, with Russia stepping up its brutal barrage of air strikes.

However, there's a glimmer of hope: EU leaders are set to convene again on 1 February to give the Facility a second chance. 

Ahead of the make-or-break date, Hungary has touted an idea to split the package into four annual envelopes, worth €12.5 billion each, according to diplomats with knowledge of the negotiations.

In practice, the divvy-up means that EU leaders would need to give their unanimous approval every year until the cash pot is exhausted. Doing so would run counter to the Facility's aim to provide long-term, predictable assistance, as it would allow Orbán, or any other head of government, to block the aid as early as next year.

Hungary has also made an unrelated demand about the bloc's COVID-19 recovery funds, the diplomatic sources said speaking on condition of anonymity.

Under current rules, member states have until the end of August 2026 to complete the milestones