Hungary to transfer $195mln to Ukraine as part of EU loan

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Hungary is transferring €187 million ($195 million) to Ukraine as part of a European Parliament-approved $18 billion loan, a decree published in the government gazette said.

"The government... calls on the Finance Minister [Mihaly Varga] to take care of securing 187 million euros, which make up Hungary's share of the €18 billion euros loan the European Union will provide to Ukraine," the decree, signed by Prime Minister Viktor Orban, said.

Hungary's government directed Varga and Foreign Minister Peter Szijjarto to kick off negotiations with Kiev to draft an agreement on the matter, which would allow Ukraine to receive funds from Budapest.

The EU loan, obtained from financial markets, will be repaid in quarterly installments with the consistency and predictability needed to keep Ukraine afloat amid the conflict.

It is conditional for Ukraine. The country needs reforms to fortify its institutions and get it ready for both reconstruction and its path to EU membership.

The conditions include steps to combat corruption, judicial reform, respect for the rule of law, good governance, and institution modernization, all of which will be examined by the European Commission before each installment.

Before the Commission can access the markets and distribute the support in early 2023, the loan must now receive unanimous approval from the EU Council by December 6.

€19.7 billion have been given to Ukraine by the EU and its member states, the majority of which came in the form of macrofinancial aid that was authorized by the European Parliament in September and July.

The loan is part of a plan for economic assistance to Ukraine proposed by the European Commission on November 9, though Hungary refused to support the proposal at the time, citing fears that the European Union was plunging itself into unsustainable debt.

"We are ready to continue to support Ukraine based on a bilateral agreement," Szijjarto said. "But we will certainly not support any kind of joint EU borrowing in this field."

"We have done so once already. We supported the loan the EU took out during the coronavirus pandemic, and that was more than enough," he explained.

Meanwhile, Hungary has been under EU sanctions, with the latter blocking a large sum of funds for the state.

Days Szijjarto's statements, European Parliament member Thierry Mariani said the EU had to release the delayed funding for Hungary in order for it to drop opposition to a new multibillion-dollar financial aid package for Ukraine.

He stressed that if the EU were to exert financial pressure on Hungary, it would run the risk of regressing its commitment to democracy.

Mariani accused Berlin and Paris of actively supporting Brussels as it increases pressure on member states that defy it by cutting off money due to perceived "illiberalism", while liberally supporting an outsider in Ukraine.