The European Union is considering a bold move to cut off funds to Hungary in the event that it blocks fresh aid to Ukraine at an upcoming summit, as revealed in a document prepared by EU officials and obtained by Financial Times. Additionally, the European Union is contemplating the possibility of suspending Hungarian Prime Minister Viktor Orbán’s voting rights, a severe measure colloquially termed the “nuclear option.”

At an upcoming summit on February 1, EU leaders are set to deliberate the mid-term revision of the union’s 2021-2027 budget, a decisive agenda that includes critical support for Ukraine.

The confidential document delineates Brussels’ response should Hungary persist in vetoing aid to Kyiv, a response that includes targeting Hungary’s economic vulnerabilities, jeopardizing its currency, and undermining investor confidence.

If Hungarian Prime Minister Viktor Orbán remains steadfast in his pledge to block the EU’s €50B aid package for Ukraine, the document specifies that EU leaders should be prepared to cease all EU funding to Budapest.

Expressing disdain for the Hungarian Prime Minister’s uncooperative stance, the document asserts that “in light of the unconstructive behavior of the Hungarian PM… they (EU leaders) cannot imagine that” EU funds would be allocated to Budapest. Furthermore, it notes that such punitive actions “could quickly trigger a further increase of the cost of funding of the public deficit and a drop in the currency.”

Responding to these developments, Hungary’s EU minister, Bóka János, vocally stated the country’s refusal to succumb to what he labeled “blackmail” from Brussels, arguing that “access to EU funds is used for political blackmailing.”

Despite Hungary’s strong stance, the country presented a new proposal to Brussels, signaling willingness to utilize the EU’s budget for Ukraine aid and even consider issuing debt to finance the initiative. However, it attached stipulations that would allow Hungary to retract its support at a later date.

Against this backdrop, an EU diplomat informed Politico that “If Orbán blocks an agreement, using Article 7 to strip Hungary of its voting rights could become a real option,” referencing the EU’s most severe sanction against a member state.

It’s worth noting that Orbán stands as the sole EU leader who maintains close ties with Russia following its invasion of Ukraine in early 2022.

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