EU headed for 'major crisis' as Orban threatens to block funding amid sovereignty row

“We are heading toward a major crisis,” one EU official said, ahead of the upcoming mid-December meeting.

One senior EU diplomat warned this could become “one of the most difficult European Councils” as today Orban claimed he would not bring up the topic of Ukraine's accession to the EU as “it is already clear in advance that there will be no agreement”.

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In mid-December, EU leaders are due to make an important choice on whether to bring Ukraine into the 27-nation club and secure a budget deal to grant Kyiv a €50 billion (£43.3billion) lifeline.

The meeting is supposed to signal to the US that, in spite of the EU’s current focus on the Israel-Hamas war, the Union is still fully committed to Ukraine.

However, Orban, Putin’s closest EU ally, is set to shake up the meeting with his threats to block all EU Commission aid to Ukraine.

A Hungarian official has signalled that Budapest will not support a “premature proposal” that would admit Ukraine to become a member of the EU.

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Gergely Gulyas, the chief of staff to Orban, told AP at a press conference that it was too early to begin formal talks on the situation.

“We are dealing with a completely premature proposal,” Gulyas said, adding that Hungary “cannot contribute to a common decision” on inviting Ukraine to join the member bloc.

He also said that Hungary does not intend to support proposed amendments to the EU’s budget, which would provide more than €50billion in aid to Ukraine.

Some EU members believe that Orban’s threats are a means to put pressure on the 27-nation club, who are currently freezing billions in Hungarian funds.

Around €22billion (£19billion) in funds have been frozen since last December after it was decided that Hungary was not complying with the rule of law.

Blocked over concerns over human rights, the plan to unfreeze the funds is considered a bargaining chip by von der Leyen in return for Hungary lifting its veto of the EU budget revision.

The EU Commission proposed a €66billion (£57.1billion) increase to the Union’s shared budget, which would include the €50billion support package for Kyiv.

Budapest has made progress in recent months to fulfil rule of law milestones set by the bloc but during a press conference in October, MEPs from several major political parties told the Commission not to fall to Orban’s “extortion”.

Thawing the funds would mark a victory for Prime Minister Viktor Orban, who swore he would not agree to any increase in the EU budget until Hungary was able to access it again.

EU lawmakers have expressed doubts that thawing the funds would send a bad “signal” to other member states.

“In practice, as of right now, none of the milestones is fulfilled (…), it would be extremely detrimental to unfreeze this money”, Green MEP Daniel Freund said.

“Regrettably, the Hungarian government is not a good-faith actor. Guarantees must be ironclad, as there is a significant risk of them being abused,” Renew Europe MEP Katalin Cseh warned.

“Viktor Orban still seems to be under the impression that he can use the EU as a cash machine and now giving him access to funds again in exchange for limited and easily circumvented reforms would be the wrong signal”, socialist MEP Thijs Reuten added.

He continued: “As soon as these funds will be released, the Orban government will use every opportunity to reverse positive developments.”