Orbán’s last stand: EU braces for showdown over €90B Ukraine loan

BRUSSELS ― For much of the past decade, Hungary’s Viktor Orbán has succeeded in bending the EU’s agenda to his will by forcing leaders to overcome his vetoes in one high-level gathering after another.

On Thursday he’s ready to do it again — possibly for the last time as he faces a tough battle for reelection against rival Péter Magyar next month.

By threatening to block, at a gathering of EU leaders in Brussels, a €90 billion loan for Ukraine that he’d approved in December, Orbán has crossed a red line when it comes to opposing Brussels. In doing so he is setting himself up for a reckoning with the bloc that could come soon after the Hungarian election, five EU diplomats and one national European government cabinet minister said.

While the bloc has so far shied away from a major confrontation with Hungary — it hasn’t stripped Budapest’s voting rights, for example — this cautious calculus may well change after the election. At that point, fears of feeding into Orbán’s campaign narrative will be displaced by the need to dissuade other leaders from copying the Hungarian strongman, said the same diplomats and officials, who were granted anonymity to discuss sensitive summit preparations.

A reckoning was in the cards regardless of the outcome of Hungary’s April 12 election, the officials said, but would arrive much faster if Orbán is re-elected. He is currently nine percentage points behind Magyar, according to POLITICO’s Poll of Polls.

“The behavior from Hungary is a new low,” Sweden’s Europe Minister Jessica Rosencrantz told POLITICO ahead of Thursday’s European Council. Asked if Stockholm would consider using legal tools against Hungary, including deploying Article 7 of the EU’s Treaty to take Budapest’s voting rights away, she said: “Absolutely, we are open.”

If Orbán is reelected, “there will be a serious conversation among a group of countries about how to handle this going into the future,” one of the diplomats said. That conversation would likely play out differently if Magyar prevails, as he “indicates that he wants to play a more constructive game,” while EU leaders would likely play a “waiting game” to see how the new government behaves.

What exactly the EU would do to rein in a reelected Orbán remains an open question. So far it has proven impossible to obtain the backing of 26 out of 27 EU countries for an Article 7 proceeding against Budapest. But other legal options, such as tying EU funds to even more stringent rule-of-law conditions, are already on the table, the diplomats said, as is dragging Orbán to court over his obstruction on the loan.

During a closed-door meeting of foreign ministers in Brussels earlier this week, German Foreign Minister Johann Wadephul showed just how little patience the EU still has for Hungary, warning that Budapest’s obstructionism could no longer be tolerated, according to three diplomats who were briefed on Foreign Affairs Council talks.

The diplomats disputed an account of the exchange by the Hungarian PM’s political adviser — who wrote in a post on X that Wadephul had threatened Hungarian Foreign Minister Péter Szijjártó with “very serious consequences.” The diplomats described the German minister’s remarks as “very direct,” “very clear” and “leaving no doubt that this can no longer be tolerated.” Other unnamed foreign ministers had been even more direct with Szijjártó, leaving him “taken aback,” according to one of the diplomats.

“Prime Minister Orbán should understand that he is all the time testing the limits of what other member states are willing to put up with,” said a second senior EU diplomat from a mid-sized country. “This cannot continue.”

A third diplomat said: “This will definitely have consequences after the elections. We are just waiting for that to happen.”

Rock and hard place

What’s especially galling about Orbán’s latest standoff to many of his critics is how well he laid his trap — and how easily EU leaders walked into it. Merely blocking the EU’s 20th Russian sanctions package wasn’t a big enough spectacle for the Hungarian PM. But the Druzhba oil pipeline, which Kyiv said had been damaged in a Russian attack in January, fit the bill perfectly.

Orbán seized on the halt in Russian oil deliveries to block the €90 billion loan, reneging on his own word to other EU leaders and devising an ideal Brussels-Budapest-Kyiv standoff for his campaign. And the Hungarian, who is now the longest-serving leader around the EU Council table, made the most of it by detaining an armored convoy carrying Ukrainian gold and officials, and then posting a video of himself alleging that Ukraine had threatened his family.

It didn’t help that Ukrainian President Volodymyr Zelenskyy also escalated the situation by refusing to allow EU inspectors to examine the pipeline for weeks and then saying he had no interest in repairing Druzhba.

“This was building for weeks, literally. And now here we are [in] the Council, and it’s his [Orbán’s] show again,” the third EU diplomat said.

European Council President António Costa, the main EU official in charge of dealing with Orbán ahead of leaders’ summits, hinted at taking a harder stance against the Hungarian prime minister in a letter he sent Orbán on Feb. 23. The letter that warned that by reneging on his support for the loan, Orbán had broken the EU’s principle of sincere cooperation, thereby exposing himself to legal consequences.

But Costa didn’t follow up on the threat, with a European Council official telling POLITICO that the idea of suing Budapest over the obstruction had been dropped because the Court of Justice would “take too much time” to act. The EU needs a short-term solution for the Ukraine loan, the official said.

“This is hard to understand,” the third diplomat said. “They should have played hardball, at least tried it out, in the meantime put some temporary measures on him. It would have been at least something than this wobbling. But nothing came.”

Now leaders face a dilemma as Orbán once again threatens to steal the show at the European Council meeting: Call his bluff by taking the loan off the table, and risk infuriating Zelenskyy, who has been invited to the the meeting — or embrace a confrontation with Orbán that will inevitably seem like the EU is giving in to blackmail.

“There is clear reluctance to give Orbán the spotlight,” the same diplomat said. “We won’t give him that space at the EUCO. But if we fail on the loan, Zelenskyy will rightly be furious.”