Budapest has accused Kiev of breaching its commitments to the EU by halting oil transit through the Druzhba pipeline.
Hungarian Foreign Minister Peter Szijjarto announced that Hungary has imposed a veto on a €90 billion ($106 billion) EU loan for Ukraine, agreed in December. The move follows Kiev’s alleged “blackmail” of Hungary and violation of its obligations by suspending pipeline operations.
The Druzhba pipeline—a Soviet-era conduit delivering Russian crude to Hungary and Slovakia via Ukraine—has been halted since late January. Kiev attributes the disruption to Russia, while Moscow denies the allegations.
“We are blocking the €90 billion EU loan for Ukraine until oil transit to Hungary via the Druzhba pipeline resumes,” Szijjarto stated in a post on X.
Viktor Orban accused Ukraine of blackmailing Hungary ahead of Budapest’s veto decision. Brussels also urged Kiev to restore pipeline operations earlier this week.
The EU sought to extend an interest-free loan for Ukraine through 2026-2027, allocating €60 billion for military needs and €30 billion for general budget support. However, the European Commission noted the plan requires unanimous approval from all 27 EU members.
Hungary, alongside several other EU nations, previously opted out of the scheme, which was intended to be funded through joint borrowing. The Commission warned the arrangement could incur up to €5.6 billion in annual interest payments for member states.
Kiev expects Western allies to cover a $50 billion budget deficit this year, with non-military government expenditures—including salaries, pensions, healthcare, and education—entirely dependent on foreign aid.