European leaders sharply rebuked Hungary’s Prime Minister Viktor Orbán on Thursday, March 20, 2026, after he vetoed a €90 billion aid package for Ukraine, throwing the future of the funding into question. The dispute overshadowed a planned discussion of European competitiveness at the EU summit, highlighting growing divisions within the bloc as Ukraine continues to fight against Russian aggression.
The aid package, agreed to in December 2025, was intended to provide financial support to Ukraine throughout 2026 and 2027. Even as Hungary, along with Czechia and Slovakia, initially approved the framework with the understanding they would not be required to contribute, Orbán ultimately blocked its formalization. He cited damage to the Druzhba pipeline – which transports Russian oil via Ukraine to Hungary and Slovakia – as the reason, stating it must be repaired and oil flow restored before he would approve the aid.
Several participants described the criticism leveled at Orbán during the meeting as unusually harsh. Swedish Prime Minister Ulf Kristersson said after the summit, “I have not heard such strong criticism before.” He characterized the atmosphere as a “massive scolding” – not only regarding the substance of the issue, but as a matter of principle, questioning a leader’s willingness to break a collective decision.
“There is a measure of honor in this,” Kristersson added. “If we are to make collegial decisions unanimously, we must be able to trust each other afterwards.”
German Chancellor Friedrich Merz was equally critical, calling Orbán’s actions a “gross violation of the principle of loyalty” and stating he had “never experienced anything like this before.” He predicted the fallout would “leave deep scars.”
European Council President António Costa, known for his measured approach, also voiced strong disapproval. “No one can blackmail the European Council. No one can blackmail the EU institutions,” Costa stated.
Orbán, however, remained defiant, arguing that Europe cannot survive without Russian energy. “Europe cannot survive [without Russian energy]. They are probably denying that fact now. It will grow obvious to everyone in a week or two,” he asserted after the meeting.
Despite the deadlock, European Commission President Ursula von der Leyen signaled that Ukraine would ultimately receive the funds. “The loan is still blocked, because one leader is not keeping his word. But let me repeat what I already said in Kyiv: we will deliver – one way or another,” she said.
Several leaders linked Orbán’s stance to the upcoming parliamentary elections in Hungary on April 12, where he faces a challenge from opposition leader Péter Magyar. Belgian Prime Minister Bart De Wever expressed confidence that the situation would resolve after the election. “It’s a matter of time. I think it’s connected to the election campaign in Hungary. Probably there will be a different reality after April 12,” De Wever said.
Kristersson confirmed that Orbán’s sole condition was the repair of the pipeline, a project the EU Commission is involved in and which Ukraine has accepted a EU-supported plan for. Sweden, Kristersson added, is prepared to contribute personnel to the repair efforts. “The only, but major, condition that Hungary is setting is that the [pipeline] should be repaired and the oil should start flowing again. That could take a number of weeks, around six weeks was the approximate time mentioned,” he said.
The summit also addressed the EU’s Emissions Trading System (ETS), a market-based system designed to price carbon emissions and fund the transition to a greener economy. The ongoing conflict in Iran and rising energy prices had increased pressure to reform the system.
Countries including Czechia, Italy, and Austria had sought immediate relief for energy-intensive industries through exemptions or expanded free allocation of emission allowances. Austrian Chancellor Christian Stocker had called for an extension of current free allocations beyond 2034, while Czech Prime Minister Andrej Babiš had requested direct exemptions for energy-intensive industries.
However, opposition from Sweden, the Netherlands, and Germany prevented those changes. Dutch Prime Minister Rob Jetten strongly defended the system, stating, “The ETS system was crucial in driving the transition in Europe. Without it, we would now be importing fossil energy for hundreds of billions more.”
Kristersson echoed this sentiment, emphasizing the importance of maintaining established rules for companies that have already leveraged European climate policy for competitive advantage.
the ETS was preserved, with the Commission tasked with presenting a targeted review of the system by July 2026 to mitigate price fluctuations. A short-term toolbox of national measures will also be presented soon. Chancellor Merz summarized the outcome: “We are not questioning the ETS. The measures should be tailored, targeted and temporary.”
Von der Leyen also unveiled a proposal for an ETS Investment Booster worth €30 billion, funded by 400 million emission allowances, focused on decarbonization projects with an emphasis on lower-income levels.
Kristersson also highlighted a win for Sweden regarding revenue generated when electricity flows between Swedish electricity price areas – known as congestion income. “We have protected Swedish vital interests when it comes to energy prices, that is quite obvious,” he told Europaportalen after the meeting. “Our right to decide over the congestion fees in Sweden is secured. Other countries will not be able to seize them. That is explicitly described.”
The agreement establishes a “flexible strategy for domestic revenues from congestion” that considers national circumstances, but does not explicitly guarantee Sweden will retain all its revenue. The final text establishes a negotiating principle, not a final result, with the original Commission proposal still on the table in ongoing negotiations over the electricity package.
The summit also addressed the conflict in Iran, which erupted following the joint US-Israeli attack in late February. Leaders called for de-escalation and a moratorium on attacks on energy and water facilities. France went furthest in its signaling, with President Emmanuel Macron stating he had spoken with the Emir of Qatar and President Trump, and that France was exploring the possibility of a UN-backed escort mission in the Strait of Hormuz. “We have initiated an exploratory process and we will see in the coming days if it has a chance of succeeding,” Macron said.
EU High Representative for Foreign Affairs and Security Policy Kaja Kallas cautioned against military engagement, reportedly warning that it is easy to enter a war but difficult to exit, according to Politico, which cited diplomats who attended the discussion.
The summit conclusions reaffirmed support for existing maritime missions Aspides and Atalanta, and welcomed voluntary contributions from member states to ensure freedom of navigation in the Strait – when conditions are met.
Belgian Prime Minister Bart De Wever also clarified remarks he made last week about the possibility of normalizing relations with Russia, which had drawn criticism. De Wever walked back the tone, but not the reasoning, describing himself as deeply pro-Ukrainian and emphasizing his family’s long-standing ties to Ukraine. He maintained, however, that any normalization of relations with Russia could only reach after a peace agreement acceptable to Ukraine, and that he never advocated for EU concessions. He noted that the statement did not elicit any reaction from his colleagues in the meeting room. “They recognize very well what I think. No one doubts my loyalty to Ukraine. No one,” De Wever said.
Beyond these key issues, the summit conclusions included decisions regarding a power grid package to be adopted in 2026, and a request to the Commission to present an AI omnibus package by July, in response to demands – driven in part by Chancellor Merz – to reduce regulatory burdens for artificial intelligence. Discussion of the EU’s next long-term budget was postponed to the April summit in Cyprus.
The next ordinary EU summit will take place in June 2026. Before then, leaders will gather for an informal meeting in Cyprus in April – a meeting that could prove decisive in determining whether Ukraine receives its funding.
