AP —
The European Union has approved a huge two-year loan package to meet Ukraine’s economic and military needs, Cyprus’ president announced on Thursday, as oil began flowing into key pipelines to Hungary and Slovakia, ending months of political deadlock.
The EU also approved new sanctions against Russia over its war with Ukraine. The measure was prepared earlier this year and was due to be announced in February to mark the fourth anniversary of the conflict, but was opposed by Hungary and Slovakia.
Hungary and Slovakia have been at loggerheads with Ukraine since oil shipments from Russia to the two EU countries were halted in January following pipeline damage. Ukrainian authorities blamed the damage on Russian drone strikes. Both countries confirmed on Thursday that deliveries had resumed.
Ukraine desperately needs a 90 billion euro ($106 billion) loan package to rebuild its war-torn economy and keep Russian troops at bay. Hungary has broken a December agreement on funding, angering EU member states.
Cypriot Finance Minister Makis Keravnos said: “Today the Board approved the final elements necessary to enable the disbursement of a €90 billion loan to Ukraine.” “Loan disbursements will begin as soon as possible, providing essential support for Ukraine’s most pressing budgetary needs.”
“Promised, delivered, delivered,” European Council President Antonio Costa posted on social media hours before he was scheduled to chair the EU summit in Cyprus, which holds the EU’s presidency until June 30.
The financing package was given the political green light after Russian oil started flowing back into Hungary and Slovakia through the Druzhba pipeline that crosses Ukraine. Populist Slovak Prime Minister Roberto Fico welcomed the development as “good news”.
“I would like to pray for the establishment of serious relations between Ukraine and the European Union,” Fico said.
Hungarian energy group MOL said: “Early on Thursday, we received crude oil at the Feniesrike and Budkovce pumping stations. Thus, the transport of crude oil through the Druzhba pipeline system to Hungary and Slovakia has resumed for the first time in almost three months.”
Most of Ukraine and its supporters oppose Russian President Vladimir Putin’s imports of Russian oil, which are funding the country’s war against Ukraine, now in its fifth year. However, unlike other countries in the European Union, Hungary and Slovakia remain dependent on Russia for their energy needs.
Hungarian nationalist Prime Minister Viktor Orbán, who recently lost an election, accused Ukraine of deliberately delaying repairs, a claim that Ukrainian President Volodymyr Zelenskiy denied.
Fico said Thursday that he still did not believe at all that the pipeline was damaged, insisting that the pipeline and oil were “used in the current geopolitical battle.”
The uproar raised further troubling questions about EU decision-making, which can often hold national interests hostage when a unanimous vote is required. In recent months, several government officials have called for expanding the majority vote.
The 27-nation bloc initially planned to use frozen Russian assets as collateral for the loan. However, that option was blocked by Belgium, which holds most of the frozen assets.
In December, the Czech Republic, Hungary and Slovakia agreed not to stop EU member states from borrowing money on international markets unless the three countries need to join the plan.
But Prime Minister Orbán, who has repeatedly blocked EU aid to Ukraine, later abandoned the deal over the pipeline issue and intensified campaigning ahead of an April 12 general election, which he lost in a landslide, angering 24 other countries.
The EU has also been trying to impose new sanctions on Russia since February to undermine the war effort, but Hungary and Slovakia have also blocked these measures, citing oil disputes.
The sanctions prohibit the provision of services such as maintenance and refueling to vessels illegally transporting Russian oil. More than 40 ships believed to be part of Russia’s shadow fleet were also targeted.
Oil revenues are the backbone of Russia’s economy, allowing Putin to funnel money to the military without exacerbating inflation for ordinary people or avoiding currency collapse.
Asset freezes have been imposed on about 60 more “entities,” many of them companies, government agencies, banks, and other organizations, adding to the list of more than 2,600 Russian government officials and entities already sanctioned, including President Vladimir Putin, his political associates, oligarchs, and dozens of parliamentarians.
