Brussels Considering Financial Tactics to Sway Hungarian Policy on Ukraine Aid

Otis De Marie

Belgium (Brussels Morning Newspaper), The European Union’s recent engagement with Hungarian Prime Minister Viktor Orbán has taken an intriguing turn, steering towards the turbulent waters of international financial markets. According to a recent report by the Financial Times, an official memo in circulation within the corridors of Brussels details a strategic plan aimed at destabilizing the Hungarian economy. This bold move is on the table if Orbán persists in his current course of action, which has been a thorn in the EU’s side.

This development is not just a simple strategic shift; it’s a reflection of a frayed patience with Orbán in Brussels. The fact that such measures are being discussed openly is a testament to the heightened tensions. The timing of this news is critical, as it precedes a crucial EU summit scheduled for next Thursday. This summit is pivotal for the approval of a substantial 50 billion euro aid package for Ukraine. Orbán’s previous blockade in mid-December threw a wrench in the works, leading many to hope that a delay might bring Hungary to a point of agreement. However, as the summit draws near and the negotiations with Budapest remain fraught with difficulty, the pressure is palpable.

The document, emerging from EU Council President Charles Michel’s secretariat, offers an analysis of the Hungarian economy. According to insiders, while it stops short of presenting a concrete plan to weaken Hungary’s economy, it implies that Hungary’s eligibility for EU funds might be at risk if it continues to obstruct aid to Ukraine. This tactic is significant, considering that some EU funds for Hungary are already withheld due to rule-of-law concerns.

What’s striking here is the direct approach of suggesting that the flow of all European money to Hungary could be halted. Such a move would undoubtedly shake the confidence of international investors in Hungary’s economic stability. This isn’t mere speculation – the Hungarian forint’s immediate 0.7 percent drop in value following the Financial Times report underscores the potential impact. It’s a precarious time for Hungary, already grappling with above-average inflation and other economic challenges.

Budapest’s response was swift and sharp, with Hungarian EU Affairs Minister János Bóka accusing Brussels of “blackmail,” despite claiming Hungary’s “constructive” stance in negotiations. Contrast this with the EU’s approach back in December, when a mix of diplomacy and charm was employed to sway Orbán. High-profile interactions, including calls from various EU leaders, a visit from Michel, and a dinner hosted by French President Emmanuel Macron at the Elysée Palace, were all part of the playbook.

Now, however, the tone has shifted dramatically. From charm to veiled threats, the EU’s strategy seems to be hardening. Discussions about invoking the Article 7 procedure, which could strip Hungary of its voting rights – a drastic measure within the EU’s framework – are becoming more frequent. This reflects ongoing concerns over Hungary’s disregard for democratic values and the rule of law.

Keeping Budapest under pressure, the EU is also considering assembling a Ukraine support package with the other 26 member countries. However, this route is laden with procedural complexities and political concessions that some leaders are reluctant to make.

Back in December, the EU’s tactic was to play it soft with Orbán, trying to pacify him in the debate over Ukraine funds. A key decision on opening accession negotiations with Kyiv, which Orbán opposed, was even taken during his brief absence from a meeting. But now, it seems, the strategy has evolved into a more assertive stance.

As we await the outcomes of the Thursday summit, one question lingers: Will this shift towards a tougher approach prove effective in dealing with Orbán and his policies? Only time will tell, but the stakes are undoubtedly high, not just for Hungary and the EU, but for the broader geopolitical landscape.

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Otis De Marie is a journalist specializing in the intersection of politics and economics and has an in-depth understanding of geopolitics and foreign affairs.