A crucial loan for Ukraine becomes election leverage for Orban

In recent weeks alone, Orban and Zelenskyy have sparred over the arrests of Ukrainian bank employees in Budapest and Russia’s transfer of Ukrainian prisoners of war to Hungary. Perhaps most urgently, the Hungarian leader is blocking a loan worth 90 billion euros ($104 billion) from the European Union to Ukraine that he agreed to as recently as December, over demands that Ukraine fix a damaged oil pipeline before rising fuel costs hurt Hungary’s economy.

On Thursday, Orban again rejected efforts by the leaders of other European countries to let the loan proceed, according to two European diplomats, speaking on condition of anonymity because they were not permitted to discuss the matter publicly. As EU leaders met for a summit in Brussels, it was clear from the outset that he would not relent.

“Brussels is in fact colluding with the Ukrainians,” Orban told reporters as he arrived. The European Union is “on the Ukrainians’ side — we cannot hope for anything from them,” he added. “We must break this oil blockade through our own strength.”

Expectations had already been low. “I’m not very optimistic,” said Kaja Kallas, the top EU diplomat. “The question for us is: How can we really force the implementation of the agreement that we made in December?”

The Hungarian leader has at times relented to EU pressure in the past, but he has shown little sign of doing so before the election; he appears to be calculating that antipathy toward Ukraine, and its potential economic drain, is a winning political stance in a country that has never been an enthusiastic supporter of aid to Ukraine.

Zelenskyy has taken note. He told an Irish blogger recently that Orban had based his election campaign around a hatred of Ukraine and “me personally” — and has taken several opportunities to fire back verbally.

The pipeline has become Hungary’s main sticking point over the loan. Also known as the Druzhba pipeline, it runs through Ukraine and supplies Russian crude oil to Hungary and Slovakia. But it has been disrupted since Jan. 27, when it was hit in western Ukraine by what Ukraine and the EU say was a Russian attack.

Orban accused Ukraine of orchestrating an “oil blockade” and ordered troops to protect energy infrastructure in Hungary. His foreign minister, Peter Szijjarto, shocked Brussels in late February by announcing that Hungary would refuse to proceed with the 90 billion-euro EU loan for Ukraine until the oil supply resumed.

The weeks since have been filled with tit-for-tat verbal attacks and rhetorical escalations.

On March 5, Orban threatened to use force to reopen the pipeline.

The same day, Zelenskyy said the pipeline could be repaired in “a month and a half” although Ukraine “sees no technical or safety reason to do so.” That timeline would probably put the repair just after the Hungarian election.

He also made a thinly veiled threat of his own, saying that if “a certain person” blocked the EU loan, then “we will give that person’s address to our armed forces, to our guys, so they can call him and speak to him in their own language.”

Orban quickly fired back. Zelenskyy’s “threats are not about me,” he wrote on the social platform X hours later. “He is threatening Hungary.”

Gabor Gyori, an independent political analyst with the Policy Solutions research organization in Budapest, said Orban was seeking to win over the very few voters who remain undecided in the heated race between Fidesz and the opposition party, Tisza, led by politician Peter Magyar.

“All of this feeds into Viktor Orban’s claim that Ukraine is a major threat to Hungary — not only anymore for energy policy reasons, which was the key argument until recently, but now also potentially militarily,” Gyori said. “It could shift a few votes at the last minute.”

Orban’s allies piled on. Prime Minister Andrej Babis of the Czech Republic called Zelenskyy’s comments “absolutely unacceptable.” Slovakia’s prime minister, Robert Fico, warned on X that “if the Ukrainian president continues like this, it may happen that other EU member states will also block the 90 billion loan.”

Fico has also said he would halt emergency electricity supplies to Ukraine until the pipeline was fixed.

Viktor Shlinchak, a Ukrainian analyst, said he found the statement politically imprudent.

“In recent weeks, Zelenskyy has been trying not to mention Orban, and this, in my opinion, is the only correct strategy — not giving Orban other hooks during the election campaign” to use Ukraine “to stir up his electorate even more.”

Hungary’s newfound opposition to the loan comes despite the fact that it would cost Hungary, Slovakia and the Czech Republic nothing. The three countries agreed in December to the no-interest loan, which required unanimous approval under EU regulations, on the condition that they were exempted from contributing.

Ukraine would need to repay the loan, which is backed by the European Union’s budget, only if Russia paid reparations.

The Ukraine government needs the cash to buy air defenses and military equipment, and it has been rapidly depleting its existing funding. It is expected to run out of money within months. That is why Hungary’s cooperation has taken on urgency.

While trying to convince Hungary, the EU has also been prodding Zelenskyy to fix the pipeline, despite his hesitance. He has pointed out that it helps to fund the Russian war effort by facilitating oil deliveries.

“I am saying openly: I am against it,” Zelenskyy recently told reporters, according to the BBC. “But if I am given conditions that Ukraine will not receive weapons, then, excuse me, I am powerless on this issue. I told our friends in Europe that this is called blackmail.”

European Union officials have urged him to allow EU inspectors to visit the pipeline and even offered to foot the bill for repairs — an offer that Ukraine has accepted.

The announcement, which came Tuesday, was widely interpreted as a sign that Zelenskyy had caved to European pressure. Even so, he repeated in a letter to top EU officials that fixing the pipeline would take until late April or early May, because damage to a key pumping station had made the repair difficult.

In their own letter, von der Leyen, the president of the European Union’s executive arm, and António Costa, the president of its political arm, reminded Zelenskyy that unanimity was needed to secure both the 90 billion-euro loan and a new package of sanctions aimed at crippling Russia’s economy — both of which Ukraine wants.

If Hungary cannot be brought around, officials have hinted that backup options exist to keep Ukraine funded temporarily — but it is not yet clear what those would be.

Hungary has continued to express skepticism about the bloc’s attempts to broker some sort of agreement, leaving the success or failure of the effort uncertain.

On Thursday, Zelenskyy sounded glum in a social media post, saying it was not clear when the loan would be unblocked.

“This is critically important for us,” he wrote. “It’s a resource for protecting lives.”

This article originally appeared in The New York Times.