The EU's plan to secure a €35 billion loan for Ukraine involves a key change in the sanctions regime that Hungary has so far blocked.
Hungary has confirmed it will block a €35 billion loan proposed by the European Commission to support Ukraine's war-torn economy until until the US elects its next president in November.
EuroNews reports on this.
The loan will be provided against the proceeds of frozen Russian assets. Other G7 allies will also contribute 10 billion euros.
The United States is concerned about the stability of this loan plan, given that EU sanctions on frozen Russian assets must be extended every six months by a unanimous decision of all EU member states. This means that at any moment, just one state can prevent the sanctions from being extended, unfreezing the assets and destroying the entire project.
Hungary in particular has acquired a reputation for blocking sanctions until controversial concessions are made, some of which are in the Kremlin's interests.
To appease Washington, Brussels has proposed extending the frozen assets from six to 36 months.
“While most member states agree on the need to quickly provide a multi-billion loan, given Ukraine's financial difficulties, Hungary seems to be in no hurry: for Budapest, the key amendment to the sanctions regime must wait until November 5,” the publication notes.
A qualified majority is required to approve the loan, but a unanimous decision by all voting participants is required to amend the sanctions.
“We believe that this issue – the extension of Russian sanctions – should be resolved after the US elections. This was Hungary's position,” Hungarian Finance Minister Mihaly Varga said on Tuesday, October 8, after a ministerial meeting in Luxembourg.
Varga argued that the two presidential candidates, Kamala Harris and Donald Trump, are advocating two opposing approaches to solving the problem of Russia's aggressive war and that the EU should base its next steps on who will replace Joe Biden in the White House after the elections.
“We have to see what direction the next US administration will take on this issue… There are two completely different ways to solve this problem. One is towards peace. And the other is to continue the war,” Varga told reporters.
The minister stressed that his colleagues had “an excellent conversation” about the loan for Ukraine, but “of course, we will have to wait until November.”
Recall that the EU found a way to bypass Hungary's veto on 6 billion euros in aid to Ukraine
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