A Ukrainian serviceman prepares a howitzer to fire at Russian troops in the Donetsk region of the country. Photo: VYACHESLAV RATYNSKY/REUTERS
The European Union has created a £17.4 billion bypass fund to overcome Hungarian resistance to further support for Ukraine, it has emerged.
Officials were forced to prepare a “Plan B” after Prime Minister Viktor Orban's Hungarian minister vetoed a £43.5 billion aid package for Kiev at an EU leaders' summit in Brussels earlier this month.
Under the new plan, member states will provide guarantees to the bloc's overall budget to allow the European Commission to borrow money for Ukraine on international markets, reports the Financial Times.
Brussels' support is seen as crucial for the EU. support for Ukraine's economy while US President Joe Biden's own aid package remains blocked and slowing Western support has forced Kyiv forces to scale back military operations.
The Kremlin said that any new EU attempts to help Kyiv would not change the course of the war and would only damage the bloc's economy.
Kremlin spokesman Dmitry Peskov said EU taxpayers should understand this. their money was spent for other purposes.
Hungarian Prime Minister Viktor Orban vetoed the aid package to Kiev in the amount of 43.5 million pounds, but there is hope in Brussels that its resistance can be overcome. Photo: ATTILA KYSBENEDEK/AFP via Getty/AFP
Although the latest scheme is expected to bring in less than the £43.5 billion originally promised, it cannot be blocked by Hungary when EU leaders meet for emergency talks on February 1.
It only requires member states with the highest credit rating. agree to provide guarantees for the planned loans.
Some countries, including Germany and the Netherlands, will have to gain support for the plan from their national parliaments.
The structure of the plan is similar to the £86.9 billion deal used to provide low-cost funding to EU countries for short-term job support schemes during the coronavirus pandemic in 2020.
People briefed on the negotiations said if EU leaders will agree the plan on February 1, and the assurances will be enough to provide Ukraine with a £782 million tranche of funding from the International Monetary Fund.
This will be enough to prevent Kyiv from resorting to printing money. maintain a budget deficit that could cause inflation to spiral out of control.
The EU money is expected to arrive in March, the same day as the new bailout promised to Kiev during a meeting of G7 finance ministers last week.
One drawback being discussed by officials involved in the process is that the workaround would only provide Ukraine with low-cost loans, rather than grants that do not need to be repaid.
The previous scheme would have provided £14.7 billion in the form of grants and €28.7 billion in loans over the next four years.< /p>
Individual Member States will be invited to offer their own bilateral grants to support Kiev in the short term.
Hungary expects more funding before resuming aid to Ukraine
A second fallback option being considered by EU capitals could use existing structures to offer Ukraine cheap loans for just a few months.
It would require a majority of member states to vote for approval before it could be put into effect.
Both packages are under discussion, with final amounts yet to be agreed.
However, the £43.5 billion package originally drawn up in June remains a priority and there is still hope in Brussels. that Orbán’s opposition can be overcome.
The Hungarian Prime Minister was offered £8.7 billion in funding. Budapest was abandoned over fears of an erosion of democratic standards ahead of the summit earlier this month as part of a bid to win its endorsement.
Mr Orban's aides have made it clear they expect a further £17.4 billion sterling. must be dispersed before negotiations on assistance to Ukraine can be resumed.
Hungary is seen as Russia's closest ally in Europe. The central European state has not sent weapons to Ukraine and has opposed EU attempts to impose sanctions on Russian energy exports.
The EU workaround report comes after it emerged that at least 33 Russian sailors went missing yesterday /yesterday. On Wednesday after a Ukrainian missile attack on a warship in occupied Crimea.
According to the Russian opposition news agency Astra, about 20 people were injured and a 64-year-old port worker was killed in the attack on Novocherkassk.
The wreckage of a Storm Shadow cruise missile donated by Britain was found near a destroyed ship in the port of Feodosia.
“The ship completely burned down and sank,” the Astra company reported in the Telegram messenger.
The Russian Ministry of Defense confirmed the presence of the missile. hit the Novocherkassk but said it was only slightly damaged in the attack.
The ship was believed to have had 77 sailors on board when it was attacked at 3am local time on Tuesday morning .< /p>
It was also believed that the ship was carrying Iranian-made kamikaze drones of the Shahed type, used by Russian troops to bomb Ukraine.
The ship is visible in satellite images published by Planet Labs. partially submerged after impact.
Video footage of the attack showed a fireball lighting up the sky over the Crimean Peninsula.
Analysts speculated that there were secondary explosions of munitions based on the board being prepared.
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