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9 Nov, 2022 11:04

Hungary reacts to EU aid plan for Kiev

Budapest has refused to back the bloc-wide borrowing scheme
Hungary reacts to EU aid plan for Kiev

Hungary will not approve a proposed EU loan scheme to provide €18 billion ($18.1 billion) in financial aid to Ukraine next year.

Finance Minister Mihaly Varga was quoted by media on Tuesday as saying that Budapest has had a “bad experience” with joint EU loans and still has not received enough aid regarding the Covid-19 pandemic.

According to Bloomberg, Varga told his colleagues at a meeting in Brussels that Budapest will not back the idea to use the EU budget to offer concessional loans to Kiev. The measure needs the approval of all the bloc’s 27 member states.

Hungarian Foreign Minister Peter Szijjarto said on Monday that his country will not stop helping Kiev, but will also not greenlight a bloc-wide borrowing plan. “We are ready to continue financial support on a bilateral basis,” Szijjarto said. “But we will certainly not support any kind of joint EU borrowing in this field.” 

“Why? Because we have already done it once. We supported joint borrowing during the coronavirus epidemic, and that was more than enough,” he explained.

European Commission President Ursula von der Leyen proposed an aid package of €1.5 billion ($1.5 billion) per month for Ukraine over the course of 2023. The amount will ensure “a stable and reliable, predictable flow of income” for Kiev, she said last month.

In a video address to the World Bank and the International Monetary Fund in October, Ukrainian President Vladimir Zelensky said his country will need $55 billion next year to cover the estimated budget deficit and rebuild critical infrastructure amid the conflict with Russia.