EU agrees $54bn in new aid for Ukraine as Hungary falls in line

BRUSSELS: European Union leaders unanimously agreed on Thursday to extend 50 billion euros ($54 billion) in new aid to Ukraine, the chairman of the summit said, overcoming weeks of resistance from Hungary and winning praise from Kyiv.

Before the summit started, EU leaders piled pressure on Hungary to lift its block, telling Prime Minister Viktor Orban to pick sides in what several saw as an existential challenge posed by Russia’s war in Ukraine, the biggest conflict in Europe since World War Two.

“We have a deal. Unity,” said European Council President Charles Michel in a post on X. “All 27 leaders agreed on an additional 50-billion-euro support package for Ukraine within the EU budget.”

Ukrainian President Volodymyr Zelenskiy welcomed the agreement, saying the aid would strengthen long-term economic and financial stability of his country as the war approaches its third year.

Ukraine’s dollar bonds gained on the news. Kyiv, which relies heavily on Western aid as it fights Moscow, said it expected to receive the first tranche of 4.5 billion euros from the EU in March. The agreement comes after weeks of wrangling with Orban, who vetoed the aid package last December. There was no comment from Hungary on the deal. Diplomats told media that, in exchange for the green light from Hungary for the Ukraine aid, the bloc did not commit to releasing any of the billions of euros of EU funds intended for Hungary but frozen by Brussels over widespread concerns about human rights and the rule of law in the country. They said the aid deal included a yearly discussion of the package and the option to review it in two years “if needed”, but no clear veto right for Budapest. With an agreement on budget support done, the leaders were next discussing military aid for Kyiv.

The bloc is seen falling short of its target of sending artillery shells to Ukraine, while a standoff between Germany - the EU’s paymaster - and other member states casts uncertainty over the future of a military aid fund that has bankrolled billions of euros in arms for Ukraine.