EU to Provide Additional Funds for Russia-Ukraine War

The European Commission's proposal includes continuous support for Ukraine until at least 2027. In other words, the EU is counting on financing the consequences of a protracted war, Akos Bence Gat, a researcher at the National University of Public Service, told Magyar Nemzet in connection with the bloc's mid-term amendment of its seven-year budget and the need for additional funds from member states. The head of foreign relations at the Danube Institute also explained how this could affect the 2024 EU elections.

The proposed EU budget change would not help the functioning of member states or the EU, but would primarily provide additional resources for the bloc's commitments regarding the Russia-Ukraine war. All this without exactly knowing how the money sent to Ukraine so far has been spent. This raises many questions. Furthermore, in the current economic situation, no member state is willing to provide Brussels with additional resources, Akos Bence Gat, researcher at the National University of Public Service and head of foreign relations at the Danube Institute, told Magyar Nemzet in connection with the European Union's mid-term revision of its seven-year budget, which entails the collect of additional funds from member states.

Akos Bence Gat says: the EU is preparing to finance the consequences of a protracted war (Photo: Danube Institute)

The president of the EU's executive body announced in June that the seven-year budget framework adopted after much heated debate in 2020, would have to be revised, also requiring member states to pay in around €66 billion. The budget amendment aims to manage migration, help Ukraine and increase the salaries of EU officials, among other things.

Although the final statement following the October European Council meeting was terse regarding the budge modifications, it is clear from the statements of several heads of state and governments in attendance that the European Commission's draft has been rejected by state leaders, who have asked the Commission to come up with a more realistic proposal.

Interest on EU money

The EU is not obliged to finance the functioning of the Ukrainian state. In this case, it is not a question of an existing budget item suffering from underfunding, but a new policy objective that the Commission wants member states to finance. And this can only be achieved if all member states agree to the decision," said the Danube Institute's head of foreign relations, explaining that  €50 billion of the €66 billion extra budget, would be earmarked for Ukraine by EU bureaucrats. He added that the Commission's proposal would provide continued support for Ukraine until at least 2027,

in other words, the EU is preparing to finance the consequences of a protracted war.

The expert noted that the Commission has also cited the need to finance the increased interest costs of the financial markets loan previously taken by the European Union. The researcher explained that the EU borrowed for the first time in its history to finance the Next Generation EU Fund for economic recovery after Covid-19, and now the interest rates on this have rocketed.

This raises particularly interesting questions from the perspective of our country.

"Hungary has not been given any of the recovery fund so far for political reasons, yet the Commission still expects Hungary to contribute to the increased interest costs of this fund. To put it mildly, the expectation is politically and morally on weak footing," he said.

Hungary's bargaining positions  

The researcher also pointed out that the issue of EU funds due to Hungary has become highly politicized and are clearly part of political bargain. EU funds are being used to blackmail Hungary into supporting certain EU policy decisions.The Hungarian government has repeatedly indicated that the issue of EU funds for Hungary should be treated as objectively as possible, separate from other political issues.

At the same time, if the EU institutions insist on blurring this issue with other political matters, a bargaining position may inevitably open up for Hungary as well.

However, the researcher added that the current power politics in the EU is detrimental to EU cooperation. "One of the EU's strengths in the past has been its ability to find solutions that are acceptable to all even the most complex issues. But today, the search for consensus is unfortunately seen as a weakness and is increasingly shunned within the European Union. The new trend is to ram through the will of the heavy-weight political and institutional players in EU decision-making at all costs.

What if member states run dry?

The expert also pointed out that as the European Parliament elections approach, the Commission announced at the half-way point that the common seven-year European budget is already starting to run out. "If a member state government were to come up with something like this before a national parliamentary election campaign, it would certainly be asked: why should taxpayers pay in more money? Have they been good stewards of the resources so far?"

By comparison, the EU leadership doesn't at all seem to be afraid of being held to account in next spring's elections, which raises questions about the democratic functioning of the EU.

In response to Magyar Nemzet's question, the expert said that the budget amendment issue is likely too complicated to be a major European parliamentary election campaign talking point on its own. However, specific issues linked to the budget revision, such as the war in Ukraine, migration or EU funds, could play a much more decisive role at the ballot box.

Cover photo: Ukrainian artillerymen in the Kharkiv region (Photo: MTI/AP/Jevhen Maloletka)