EU approves $106 billion loan package to help Ukraine after Hungary lifts veto: NPR

BRUSSELS – The European Union on Thursday approved a 90 billion euro ($106 billion) loan package to help Ukraine meet its economic and military needs for two years after oil began flowing through a major pipeline to Hungary and Slovakia, ending months of political impasse.

The EU also approved a new series of sanctions against Russia over its war in Ukraine. The measures were drawn up earlier this year and were to be announced in February to mark the fourth anniversary of the conflict, but Hungary and Slovakia opposed the move.

Hungary and Slovakia are at loggerheads with Ukraine after Russian oil supplies to both EU countries were halted after a pipeline was damaged in January. Ukrainian officials blamed Russian drone strikes for the damage. Both countries confirmed on Thursday that deliveries had resumed.

Ukraine desperately needs a loan package to shore up its war-torn economy and help keep Russian forces at bay. Hungary angered its EU partners by reneging on a December agreement to provide funding. Loans are expected to become available in the coming weeks and months.

“Promised, delivered, executed,” European Council President Antonio Costa posted on social media. Hours later, as he arrived in Cyprus to chair a summit of EU leaders, Costa told reporters that the priority now should be to advance Ukraine’s bid to join the bloc.

Standing beside them, Ukrainian President Volodymyr Zelensky thanked his European colleagues for their support. “We will work to ensure that the funds are distributed as soon as possible,” he said. “This will certainly strengthen first of all our army, the Ukrainian forces, and will allow us to boost production.”

pipeline success

The political green light for the loan package came as Russian oil began flowing again to Hungary and Slovakia via the Druzhba pipeline that crosses Ukraine. Populist Slovak Prime Minister Robert Fico welcomed that development as “good news.”

“Let’s hope that a serious relationship has been established between Ukraine and the EU,” Fico said.

FILE – A general view of a pumping station at the end of the Druzhba oil pipeline at the East German refinery PCK in Schwedt on January 10, 2007.

Sven Kastner/AP

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Sven Kastner/AP

Hungarian energy group MOL said it had “received crude oil at the Fenicelytke and Budkovce pumping stations early Thursday. Crude oil deliveries via the Druzhba pipeline system have resumed to Hungary and Slovakia after a nearly three-month hiatus.”

Ukraine and most of its European supporters oppose imports of Russian oil, which has helped finance Russian President Vladimir Putin’s war against Ukraine, now in its fifth year. But unlike the rest of the EU, Hungary and Slovakia are still dependent on Russia for their energy needs.

Hungary’s nationalist Prime Minister Viktor Orban, who was recently defeated in an election, accused Ukraine of deliberately delaying repairs – a charge Zelensky denied.

Fico said Thursday he still did not believe the pipeline was damaged at all and alleged that the pipeline and the oil were used “in the current geopolitical battle.”

Another EU voting hijacking

The dispute has raised even more troubling questions about decision-making in the EU, which can often be held hostage to national interests when a unanimous vote is required. In recent months several top officials have called for greater majority voting.

The group of 27 countries originally intended to use frozen Russian assets as collateral for the loan. But that option was blocked by Belgium, where most of the seized assets are held.

In December, the Czech Republic, Hungary and Slovakia agreed not to prevent their EU partners from borrowing money on international markets unless all three countries participate in the scheme.

But Orban, who has repeatedly blocked EU aid to Ukraine, later angered the other 24 countries by reneging on that deal over the pipeline dispute and the campaign heated up ahead of an April 12 election, which he lost heavily.

More sanctions on Russia

The European Union has also been trying to push through a new series of sanctions against Russia since February to weaken its war efforts, but Hungary and Slovakia were also blocking those measures over the oil dispute.

More than 40 ships believed to be part of Russia’s shadow fleet that illegally transports oil were targeted.

Oil revenues are the linchpin of Russia’s economy, allowing Putin to pour money into the armed forces without worsening inflation for everyday people and avoiding currency collapse.

Several banks were targeted and Europeans were banned from using Russian cryptocurrencies.

Assets were frozen on more than 60 “entities” – often companies, government agencies, banks or other organizations – joining a growing list of more than 2,600 Russian officials and entities already under sanctions, including Putin, his political allies, oligarchs and dozens of lawmakers.