BRUSSELS — Hungary is holding up about $105 billion in European funding for Ukraine, a roadblock for Kyiv as top E.U. leaders traveled to the war-torn country Tuesday to mark the fourth anniversary of Russia’s invasion.
With U.S.-led negotiations to end the war stalling, European leaders had planned to put on a show of solidarity in Kyiv by presenting a hefty financing package and new sanctions against Russia. The office of Hungary’s Kremlin-friendly prime minister, Viktor Orban, said Tuesday he is blocking both over a pipeline dispute with Kyiv.
European governments have become Ukraine’s chief financial and military backers since President Donald Trump returned to power last year and his administration halted direct funding for Kyiv and declared itself the main mediator in the war.
If it drags on, a standoff over the flow of European funds could constrain Kyiv’s ability to fight and finance state services, weakening its hand as Washington leads talks with Moscow over the country’s future. Ukrainian officials say a budget crisis is looming this spring.
“This is a setback and message we didn’t want to send today,” the European Union’s top diplomat, Kaja Kallas, said before a trip to Ukraine by European Commission and Council Presidents Ursula von der Leyen and António Costa.
The E.U. loan, worth some $105 billion, is intended to reinforce Ukraine’s military and plug its budget gap over two years, including covering weapons purchases. The E.U. says the bloc and its member states have so far provided Kyiv with over $220 billion in support during the war.
Orban, a Trump champion in Europe, has used veto powers to position himself as the E.U.’s disrupter in chief and wield outsize influence within the 27-nation bloc.
On a visit to Budapest last week, Secretary of State Marco Rubio threw Orban a political lifeline, as the Hungarian prime minister prepares for an April election that threatens to end his 16 years in power.
Rubio praised Orban’s leadership and defended the decision to exempt Hungary from U.S. sanctions on those buying Russian oil. It’s the latest effort by the Trump administration to boost right-wing populist leaders who have hailed Trump and are seen as ideologically aligned.
E.U. officials had worried the Trump administration’s backing could embolden Orban, a frequent critic of the bloc’s policies, including on Ukraine.
Trump administration officials have accused European nations of being overly dependent on Russian energy but gave Hungary a carve-out from October’s sanctions. Most E.U. capitals have substantially weaned their nations off Russian energy during the war. Hungary and Slovakia are exempt from some E.U. sanctions on Russian oil imports to allow them time to find other supplies.
In recent days, Hungary said it was blocking the E.U. decisions because of disruption to the Druzhba pipeline, which delivers Russian crude oil to Hungary and Slovakia through Ukraine.
Ukrainian officials said a Russian strike damaged the pipeline last month, but the two nations accused Kyiv of deliberately curbing supplies.
Slovakian Prime Minister Robert Fico said he would cut off electricity supplies to Ukraine over the dispute. Ukraine’s state-owned electrical grid operator, Ukrenergo, said Monday that the “likely cessation” of electricity from Slovakia would “not affect the situation” in Ukraine’s energy system.
As long-standing tensions between the capitals ratchet up, Kyiv has accused Budapest of “blackmail.” Hungarian Foreign Minister Peter Szijjarto, meanwhile, said the Ukrainian government “behaves in a very hostile way.”
Within the E.U., Orban has in the past tried to delay Ukraine aid or Russia sanctions to extract concessions, eventually allowing the measures to pass.
This time though, he surprised his neighbors by backtracking on a package that all 27 leaders of the bloc’s nations, including Orban, agreed to in December — on the condition that Hungary, along with Slovakia and the Czech Republic, would be exempt from costs arising from the loan.
The E.U. loan was an 11th-hour alternative that would give Ukraine cash as the bloc couldn’t agree on tapping into frozen Russian assets.
European officials are hoping this is a hiccup they can resolve, although the delay illustrates the E.U.’s limits in moving quickly when major decisions require consensus.
The new sanctions proposal includes a full ban on maritime services for Russian oil, which had also faced some reservations from shipping hubs Greece and Malta. E.U. leaders say the measures will hit Russia’s coffers, though many rounds of Western sanctions since 2022 have yet to stop its war effort.
German Foreign Minister Johann Wadephul said Monday he was “astounded” by Hungary’s position, while Lithuanian Foreign Minister Kestutis Budrys told reporters he was “really upset and frustrated.”
“I hope that Europe can deliver,” Budrys added.
Beatriz Rios in Brussels and David L. Stern in Kyiv contributed to this report.
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