Kyiv is bracing for potential economic hardship as Hungary and Slovakia threaten to block a crucial €90 billion (approximately $97.7 billion USD) EU aid package for Ukraine. The dispute centers on the halting of shipments through the Friendship Pipeline, a key oil transit route. The situation underscores the fragility of international financial support for Ukraine as it continues to defend against Russia’s invasion.
According to Ukrainian central bank governor Andriy Pyshnyy, if the EU funds are delayed, Ukraine may be forced to resort to printing money to cover its expenses. Pyshnyy shared this assessment in a recent interview with Bloomberg. The warning comes as Ukrainian President Volodymyr Zelenskyy traveled to Romania on Thursday seeking supplies of diesel, electricity, and liquefied natural gas (LNG), after both Hungary and Slovakia halted diesel deliveries to Ukraine.
The potential loss of EU funding is particularly acute as Ukraine struggles to finance its war effort and basic government functions. Officials in Kyiv are now calculating how long the country can sustain itself without the promised financial lifeline. The situation is further complicated by disruptions to energy supplies, with European diesel shortages driving up prices in Germany and Ukraine’s Polish allies losing access to crucial Qatari LNG due to the ongoing conflict in Iran.
The EU is expected to address the issue at a summit scheduled for next week, with negotiations continuing in the lead-up to the meeting.
Optimism Tied to Hungarian Elections
Ukraine is already feeling the impact of the measures taken by Hungary and Slovakia, as evidenced by Zelenskyy’s recent appeal for energy assistance from Romania. He sought diesel, electricity, and LNG from Romanian officials.
According to reports, a key factor in the timing of the EU funds’ arrival may be linked to the Hungarian elections on April 12. Sources indicate that a change in government in Hungary could unlock the aid package. The Brussels-based publication Politico reported Wednesday that a victory for opposition leader Péter Magyar could make him more willing to approve the aid to Ukraine, particularly if the issues surrounding the Friendship Pipeline are resolved or Hungary receives other incentives from the EU.
“The calculation in Kyiv and Brussels alike is that if Orbán loses the election, the opposition leader Péter Magyar may be more willing to approve the loan to Ukraine, especially if the problem with the Friendship (Druzsba) oil pipeline is resolved, or if Hungary receives some other incentive from the EU,” Politico reported.
