Hungary Ends Two-Year Block on Ukraine Arms Payouts

Hungary’s new government has ended the country’s two-year blockade on Ukraine arms reimbursements, enabling the EU to unlock €6.6 billion in immediate funding.

The U-turn marks an important pivot in Budapest’s foreign policy as the previous administration of Viktor Orbán had used the requirement for unanimous consent to stall the European Peace Facility (EPF), creating a backlog of over €40 billion in pending reimbursements. 

The backlog angered big donor countries like Germany and the Netherlands while forcing the EU to use workarounds to ensure Ukraine continued receiving crucial arms deliveries at a time when danger from Russian forces was mounting. 

Budapest’s decision to lift its veto on the EPF, an off-budget EU funding mechanism that compensates countries for around 40% of the value of arms they send to Ukraine, immediately frees up €6.6 billion in reimbursements, with more expected to follow.  

EU officials are now tasked with finalizing protocols for the distribution of the funds and future claims. Ukrainian Foreign Minister Andrii Sybiha has urged EU partners to leverage the newly available reimbursements to purchase air defense assets from the US through NATO’s Priority Needs List (PURL) program. 

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The change in position is part of a broader effort by the new Hungarian Prime Minister, Péter Magyar to reset relations with the EU, NATO and Ukraine.  

His nationalist predecessor Orbán had increasingly aligned Hungary’s foreign policy with Russia, angering EU partners with repeated obstructionism on Ukraine.  

In contrast, Magyar has already lifted Hungary’s veto on the EPF and its opposition to a €90 billion EU loan to Kyiv, although he has refused to send weapons to Ukraine. 

Parallel to the military funding, Budapest has also signaled its willingness to unblock the initiation of Ukraine’s EU accession negotiations. This follows productive talks on the rights of the ethnic Hungarian minority in western Ukraine. 

Such a step would allow Ukraine and Moldova to move toward opening their first formal negotiation cluster, signaling a broader warming of diplomatic relations.  

On Friday, Hungary also reached a deal with the European Commission to unblock €16.4 billion in frozen EU funds in the coming months, which had been withheld over rule-of-law and corruption concerns under Orbán.