EU summit: Hungary holds Ukraine aid ransom over Druzhba oil

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European Commission President Ursula von der Leyen insisted early on Friday that the European Union would find a way to pay out a promised €90-billion ($104.2-billion) loan to Ukraine — despite continued resistance from Hungary.

"We will deliver ​one way or the other," von der Leyen ​told reporters after a summit in Brussels, where ‌EU leaders failed to convince Hungarian Prime Minister Viktor Orban to lift his veto on the vital loan to Kyiv.

"A deal is a deal, we need ​to honor our word," EU Council President Antonio Costa. "And no one can blackmail the European Council."

German Chancellor ⁠Friedrich ​Merz called Orban's veto an unprecedented "act of serious disloyalty," adding: "This is a serious violation of the principle of loyalty ⁠of the ​member states amongst each other, and it damages the standing of the European Union."

German Chancellor Friedrich Merz accused Hungarian Prime Minister Viktor Orban of "disloyalty" for blocking a crucial loan for Ukraine, despite having approved it alongside fellow EU leaders just months ago.

"It is a gross act of disloyalty within the European Union," Merz said at a press conference early Thursday morning after a Brussels summit. "I am firmly convinced that it will leave deep marks."

Merz also said that EU leaders have asked the European Commission to find possible ways to pay out the promised €90 billion ($104 billion) loan to Ukraine despite Hungary's ongoing resistance.

Leaders of the European Union have called for a moratorium on strikes against energy and water facilities in the Middle East.

In a statement issued late on the first day of a two-day summit in Brussels, the European Council said it "strongly condemns Iran’s indiscriminate military strikes against countries in the region and expresses its solidarity with countries affected."

The EU leaders called for "de-escalation and maximum restraint, the protection of civilians and civilian infrastructure and full respect of international law by all parties."

The statement also said the EU "stands firmly and unequivocally" with Cyprus, the closest member state to the conflict. 

A UK base in Cyprus was struck early on in the war by a drone believed to have been fired from Lebanon, where Iran-backed militant group Hezbollah is based.

After Budapest and Bratislava refused to supportplans first agreed upon last December to start providing the funds to Ukraine,leaders of the EU's 25 other member states agreed to revisit the issue at their next summit in late April. 

It is conceivable that several key aspects of the deadlock could have changed by then: 

• Hungary's general elections take place on April 12, so win or lose, Orban will not be in the midst of a heated election campaign against Peter Magyar next time leaders convene in Brussels
• Further progress might have been made on the relatively recently imposed damage to the Druzhba pipeline, which went offline at the end of January
• Negotiations between Russia and Ukraine brokered by the US and others may or may not have restarted, amid their temporary pause during the war in Iran
• And the fighting in Iran and the Gulf, and the energy price pressures that the conflict is causing, might also have taken on new dimensions 

Slovakian Prime Minister Robert Fico also published a video statement on X, saying that he refused to support the conclusions from Thursday's summit that "fully support Ukraine." 

He said the meeting had "focused exclusively" on the blocked Ukrainian aid package and the resumption of oil deliveries via the Druzhba pipeline, and said that "in neither case was any progress made." 

Fico said he told European leaders about the state of emergency imposed in Slovakia in response to the oil shortage and the practical difficulties caused by what he termed a "unilateral decision" from Ukraine's Zelenskyy. 

"I reiterated that it is remarkable that after all the support the EU has provided to Ukraine, we as a major international organization are neither able to persuade nor compel President Zelenskyy to allow an immediate inspection of the allegedly damaged pipeline, its repair and operational restoration as soon as possible," he said. 

Fico said he asked the leaders whether the EU was "genuinely so weak" or whether the real goal was to cut Hungary and Slovakia off from Russian oil deliveries earlier than the exemption from sanctions originally granted to the two countries that was to run until the end of 2027.

Hungarian Prime Minister Viktor Orban has said that he has stuck to his position at Thursday's summit. He posted a video online asking questions from an aide for social media. 

"It was tough. We have just finished arguing about it," Orban said. 

He said that he faced pressure both from Ukraine's Zelenskyy "blackmailing us with oil," and from the assembled European leaders trying to convince him to change his stance. 

He asserted more than once that Hungarians' views on the issue were "united" and that the country had the right to "say no to the Ukrainian war loan."

After accusing Zelenskyy and some European leaders of "blackmail" multiple times, Orban concluded by saying: "If there is oil, there will be money; if there is no oil, there is no money." 

Italian Prime Minister Giorgia Meloni drew attention to a pair of meetings at the Italian delegation's headquarters in Brussels on Thursday amid the European Council summit in a post online. 

"This morning I met with German Chancellor [Friedrich] Merz and Belgian Prime Minister [Bart] De Wever for an exchange of views ahead of the discussion on European competitiveness," she said, adding that "we focused in particular on the consequences of the conflict in the Middle East on the global energy market and on possible initiatives to be adopted swiftly to curb the upward pressure on prices." 

After these talks, Meloni said that she, Danish Prime Minister Mette Frederiksen and the Netherlands' Prime Minister Rob Jetten co-chaired "a meeting among some of the Member States most concerned with the topic of innovative solutions to be applied to the management of the migration phenonmenon and, in particular, to the strengthening of the legal framework on returns."

Meloni's right-wing government, which is also a major focal point for irregular migration in the Mediterannean, has been among those leading the push for migration and asylum reforms in the EU. She said the represenatives from most member states, including Germany, attended the session, as well as European Commission officials.

EU's foreign policy chief Kaja Kallas said there was "no appetite" among European leaders to expand an EU naval mission in the Red Sea, a response primarily to attacks by the Iran-backed Houthis in Yemen on global shipping, into the waters in the Persian Gulf and particularly the Strait of Hormuz. 

Kallas was also critical of US President Donald Trump's threats following the latest exchange of fire around energy production sites to "massively blow up the entirety of" South Pars, the largest gas field in the world, which Iran and Qatar share, should Tehran attack Qatar again. 

"We need an exit from this war, not escalation," she said. 

French President Emmanuel Macron similarly said that Europe would "advocate for de-escalation and a return to stability in the Middle East." 

Austrian Chancellor Christian Stocker, representing a constitutionally neutral nation that never joined NATO, spoke in starker terms, saying, "Europe — and Austria as well — will not allow itself to be blackmailed." He also remarked that "intervention in the Strait of Hormuz is not an option for Austria anyway."

However, four key EU naval forces did issue a joint statement Thursday indicating a willingness to participate in "appropriate efforts to ensure safe passage through the strait" once a ceasefire or peace deal could be reached. The UK, France, Germany, Italy, the Netherlands and Japan issued the statement. 

German Defense Minister Boris Pistorius went into more detail on what Berlin might be able to offer, saying, "We rule nothing out but it depends on the situation after a ceasefire."

He said he could imagine participating "as part of an international mandate or internaional cooperation ... if all the parameters fit and the Bundestag [parliament] votes in favor." 

Speaking to European leaders in a video address, Ukrainian President Volodymyr Zelenskyy described the €90 billion (roughly $105 billion) loan package for Ukraine as "critical."

He said Ukraine was currently facing a "very difficult" situation four years after Russia's full-scale invasion, as Hungary tries to block the financial assistance until the Druzhba oil pipeline is restored, and that he hoped Europe would find a way to maintain its support. 

The Ukrainian leader said Kyiv was "working productively" with the EU on facilitating the pipeline's restoration. 

The loans package is destined for military and other domestic spending by the government in Kyiv, long cash-strapped even before the war with Russia put severe strain on its spending and earning capacities. EU officials believe that Ukraine needs at least a sizeable chunk of the €90 billion package by the start of May to remain solvent; during the negotiation phase, Zelenskyy had spoken of a projected 2026 shortfall of up to €50 billion. 

Zelenskyy called the potential disruption of the loan a sign that it was often hard for the EU to "implement decisions that have already been made," and said he hoped this would not be the case with the accession process Ukraine seeks to become an eventual EU member, another issue Orban is likely to resist. 

Zelenskyy also raised hopes of a possible resumption of talks with Russia brokered by the US, which have been frozen ever since the bombardment of Iran began, saying he had "received signals" from the US in recent days that the talks might resume "soon." 

The European Parliament's Trade Committee has indicated plans to implement the trade deal struck between the EU and US last year, provided certain conditions are met. 

Committee chair Bernd Lange, however, said that before the agreement could come into force, the US must give a binding commitment to comply with the negotiated terms and show concrete progress towards reducing additional tariffs on steel and aluminium products. 

"We are calling for all EU products containing less than 50% steel or aluminium to be returned to a tariff rate of 15%," Lange said. 

The deal stuck last year, removing many of Trump's so-called "Freedom Day" tariffs arbitrarily imposed more or less worldwide, still needs approval from the European Parliament and EU member states before it can come into force. 

The parliamentary committee put the implementation process on hold at the height of the Greenland uncertainty triggered by Trump earlier this year as he threatened the reimposition of sanctions unless his ill-defined demands regarding the autonomous Danish territory were met. Those tensions have since somewhat subsided after Trump backed down almost as quickly as he had sounded the alarm, issuing similarly few details on what a vague new "deal" had done to change his mind. 

On Thursday, ahead of the leaders' summit in Brussels, a majority of the committee voted to continue the implementation process. 

The EU will also retain the right to suspend the agreement if economic pressure is used as a political lever, committee chair Lange said. 

The European Central Bank on Thursday held its key interest rate steady at 2%, also leaving its other two benchmark rates unchanged, but warned that the war in Iran and resultant energy cost pressures were clouding the outlook for growth and inflation in the eurozone. 

"The war in the Middle East ... will have a material impact on near-term inflation through higher energy prices," the ECB President Christine Lagarde said. "Its medium-term implications will depend both on the intensity and duration of the conflict and on how energy prices affect consumer prices and the economy." 

The central bank also indicated it was keeping its options open and continuing to monitor the war and its effect on inflation and growth. 

"The Governing Council is well positioned to naviage this uncertainty," Lagarde said. "Inflation has been around the 2% target, longer-term inflation expectations are well anchored, and the economy has shown resilience over recent quarters." 

Central banks in the US, Canada, Japan, Britain, Sweden and Switzerland delivered broadly similar messages earlier in the day or on Wednesday. 

Rising energy prices could be liable both to accelerate inflation and to dampen economic activity as companies and consumers face higher electricity and fuel bills. 

Finnish Prime Minister Petteri Orpo told reporters on arrival in Brussels that he believed Hungary's Prime Minister Orban was mainly focused on election grandstanding as he seeks a fifth term in office. 

"He's using Ukraine as a weapon in his election campaigning, and it's not good. We had a deal, and I think that he betrayed us," Orpo said. 

Meanwhile, German Chancellor Friedrich Merz told German lawmakers on the eve of the summit that "the guiding principle of the European Union is one of loyalty and reliabilitly." 

He accused Orban of "setting up this blockade in Europe now for domestic political reasons and because of an election campaign that is being conducted there." 

Like Orpo, Belgian Prime Minister Bart de Wever alluded to Hungary's prior agreement to the statement on Ukraine assistance, saying it was "unacceptable" to refuse to "execute" a prior decision. 

Austria's chancellor, Christian Stocker, said that if Orban was indeed using the election as a pretext, "this is not a valid argument given the situation in Ukraine, the plight of the people in Ukraine, and what we ourselves have decided." 

Hungarian Prime Minister Viktor Orban, fighting for his political survival in a fierce general election campaign against a breakaway conservative rival, has threatened to block a major financial assistance package for Ukraine unless Russian oil imports via the Druzhba pipeline are reactivated. 

The pipeline has been out of service since January, when Ukraine said it was damaged as a result of Russian attacks. Hungary, however, has questioned the need to shut down the pipeline, calling for an EU team to analyze the damage and repair it if necessary. 

"I will never support any kind of decision here which is in favor of Ukraine," Orban said, as he arrived in Brussels on Thursday. "The Hungarian position is very simple. We are ready to support Ukraine when we get our oil, which is blocked by them."

Hungary and Slovakia were granted special dispensation from EU sanctions on Russian oil deliveries imposed after the 2022 full-scale invasion of Ukraine. This was on the basis that the landlocked countries, both led by politicians still maintaining comparatively warm ties to Moscow, were particularly dependent on the Russian exports. 

Orban has described the oil's supply as "existential for Hungarians." 

Ahead of the meeting, Slovakian Prime Minsiter Robert Fico also withdrew his support for a planned summit statement on Ukraine because it did not include the pipeline oil delivery issue as he had requested. 

"This is being rejected for incomprehensible reasons," he told the Slovak parliament. "I will not vote for the conclusions on Ukraine."

Hello and welcome to our updates from the two-day EU leaders' summit in Brussels, which is likely to wrap up on Friday morning. 

The meeting is sure to be influenced in large part by the developments in Iran and the wider region since the first US and Israeli strikes on February 28. 

But EU leaders are also trying to use the meeting to ensure that the conflict in Ukraine is not forgotten, while the Trump administration's eye and military equipment are squarely focused on a different region.

Hungary, in particular, could make this difficult. Its prime minister, Viktor Orban, is calling for the repair and or reactivation of a Russian oil pipeline in Ukraine that until recently supplied Hungary and Slovakia. The two countries had been granted exemptions to EU sanctions on Russian oil imports.