Hungary accuses EU of blackmail over Ukraine aid standoff

Hungary accused the European Union of blackmail after a leaked document reportedly suggested that the bloc plans to sabotage Budapest’s economy if it vetoes fresh aid for Ukraine at a summit later this week.

Hungary’s minister for EU affairs took to social media to lambast the paper drawn up by EU officials and cited Sunday by the Financial Times, which said that Brussels has developed a strategy to target Hungary’s economic weak spots and undermine investor confidence over its blockade of funds to Kyiv.

“Hungary does not give in to blackmail,” Bóka János wrote in a post on X, the platform formerly known as Twitter.

“The document drafted by Brussels bureaucrats only confirms what the Hungarian Government has been saying for a long time: access to EU funds is used for political blackmailing by Brussels,” he added.

According to the report, Brussels said that if Budapest does not back down, EU leaders should pledge to shut off all funding to the country, which in turn would spook markets, weaken the country’s forint currency and lead to a surge in the cost of borrowing.

A senior EU official on Monday described the document as a background note describing the current state of the Hungarian economy, and said that it did not outline any specific plan relating to Budapest, the EU budget or Ukraine funding. It added that budget talks remain ongoing and will continue to be based on reaching a compromise that is acceptable to all 27 member states.

Orban in December blocked a vote on the extension of aid to the war-torn country and abstained from a vote paving the wave for Ukraine’s EU accession talks.

However, Hungary may be showing signs of softening its stance, according to the FT report, which cited Bóka as saying that Budapest had sent a new proposal to Brussels on Saturday, indicating that it was open to using the EU budget for the Ukraine aid so long as caveats were added that would allow it to change its mind at a later date.

Orban’s political director said that the document showed that the EU was unwilling to compromise with Budapest.

“Brussels is using blackmail against Hungary like there’s no tomorrow, despite the fact that we have proposed a compromise,” Balázs Orbán wrote in a post on X.

An EU spokesperson did not immediately respond to a CNBC request for comment on Budapest’s new proposal.

Hungary has often proved a thorn in the EU’s side over support for Ukraine. It also remains the one remaining holdout in Sweden’s bid to join NATO, after Turkey’s Parliament approved Stockholm’s bid last week.

Orban is due to meet later this week with his Swedish counterpart Ulf Kristersson to discuss the bid further.