The European Union is confident that an agreement to provide Ukraine with €50 billion ($54.3 billion USD) in aid can be finalized within the next few weeks, Politico reported on Jan. 16, citing anonymous diplomats and officials.

Despite this confidence, there is still no consensus on what concessions to offer Hungary in exchange for approving this aid, and which concessions Hungary might accept.

Read also: Slovakia backs Hungary’s stance to block EU’s financial aid to Ukraine

Hungarian Prime Minister Viktor Orban is moving towards accepting a compromise regarding the use of block budget funds, even if the deal does not meet the demands he set after the summit in December, where he blocked the funding package, several European diplomats and officials suggested.

There’s a sense in Brussels that the EU might have “called Orban’s bluff” this time, according to sources.

“The December summit was a wake-up call,” one EU diplomat said. “Several leaders realized what [Orbán] is really about.”

Read also: Orban demands unlocking of EU funds for Hungary before EU releases EUR 50 billion for Ukraine

The European Commission has “set a high bar” for allocating any funds, signaling that Hungary will have to “go a long way” before it can receive its share from the general fund designated to assist countries in recovering from the “economic shock” caused by the pandemic.

The EC is also considering an “emergency brake” mechanism, allowing any country blocking funding for Ukraine to delay payments and postpone discussions at the EU leaders’ summit. However, this option would not allow any EU member country to veto the payments.

The consensus is that any final compromise must include certain concessions to Hungary, sufficient for Orban to claim a “victory.”

“In December he said that no money from the EU budget would go to Ukraine,” EU diplomat added. “If this happens, how can he say that it’s a win?”

Two diplomats noted that a second veto on financing Ukraine would prompt EU capitals to call for the so-called Article 7 procedure to suspend Hungary’s voting rights in the European Council.

While there was a readiness in Brussels to offer Orban certain concessions for reaching an agreement, most members rejected Hungary’s attempt to split Ukraine’s funding into annual installments requiring unanimous annual approval. In practice, this would give Orban the power to block EU funding for Ukraine annually or to seek concessions from Brussels for lifting his veto.

It’s unlikely EU member countries will make a decision that gives Hungary a chance to regularly blackmail the block, European diplomat said.

Read also: Risks Ukraine faces from Hungary and Slovakia

Another idea being considered by the EU involves an interim review of funding in 2025, but Ukraine’s strongest supporters find this option unacceptable. This contradicts the logic of the EU’s seven-year budget, intended to offer stability and predictability.

During an EU summit on Dec. 14 where 26 bloc members approved the start of negotiations with Ukraine regarding EU accession, Orban vetoed a new EUR 50 billion ($54.3 billion) aid package for Ukraine, insisting that Budapest receive EUR 21 billion euros ($22.8 billion) in aid and grants that has been frozen due to the poor situation with human rights and rule of law in the country.

Orban has said that Hungary opposes granting Ukraine EUR 50 billion ($54.3 billion) in aid over four years, claiming it to be a “violation of the sovereignty and national interests of the EU.”

Ukraine would receive €50 billion in aid from the EU despite Hungary’s resistance, German Foreign Ministry announced at the end of December.

The EU is preparing an alternative plan to provide Ukraine with €20 billion ($21.74 billion) in financial support, bypassing Orban’s veto, the Financial Times reported.  The proposed mechanism could be used if Orban’s veto is not overcome at the planned summit on Feb. 1.

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