The EU has drawn up plans to sabotage Hungary’s economy if Prime Minister Viktor Orban decides to block a €50billion (£42.6billoin) aid package to Ukraine this week.
The plans will target Budapest’s economy in an attempt to hit “jobs and growth”. EU officials have proposed weakening its currency and reducing investor confidence as part of the strategy.
Last December, Orban vetoed the EU’s plan to send an aid package to Ukraine. Leaders are now meeting on Thursday to revisit the matter, however, the Hungarian prime minister has vowed to block it again.
“In the case of no agreement in the February 1 [summit], other heads of state and government would publicly declare that in the light of the unconstructive behaviour of the Hungarian PM … they cannot imagine that” EU funds should be provided to Budapest, the document, cited by the Financial Times, claims.
Last December, Orban vetoed the EU’s plan to send an aid package to Ukraine
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If funding is blocked, “financial markets and European and international companies might be less interested to invest in Hungary”, the document states.
The penalty “could quickly trigger a further increase of the cost of funding of the public deficit and a drop in the currency”.
János Bóka, Hungary’s EU minister, told the Financial Times that whilst he was unaware of the financial threat, his country “does not give in to pressure”.
“Hungary does not establish a connection between support for Ukraine and access to EU funds, and rejects other parties doing so,” he said. “Hungary has and will continue to participate constructively in the negotiations.”
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The EU has drawn up plans to sabotage Hungary’s economy if Orban decides to block a €50billion (£42.6billoin) aid package to Ukraine this week
GETTYAn EU source said: “The reality is Hungary has not really been flexible on this. The member state level of frustration is increasing. It is higher than in December.”
On Friday, it was reported that Brussels diplomats are said to be considering using Article 7, a clause in the EU treaty that allows it to suspend a member's voting rights.
One EU diplomat told Politico: “If Orbán really blocks again an agreement [on the budget and €50billion for Ukraine] at the February summit, using Article 7 to strip Hungary of its voting rights could become a real option.”
Last month, the European Commission handed £8.5billion to Hungary. The funding was initially frozen due to corruption and rule of law concerns with Hungary's government.
Ursula Von der Leyen was accused of striking a “dirty deal” with Budapest, with the European Assembly accusing the commission of giving in to blackmail from Orban.
Ursula Von der Leyen was accused of striking a “dirty deal” with Budapest after releasing some of their funds
PAThe European Commission has said it released the funds because Hungary had shown sufficient effort to address concerns over the rule of law, with Von der Leyen saying it had no option but to approve the funds.
She said: “These are the rules we have all agreed to. We will follow them. This is what makes the rule of law stand out from arbitrary power.”
The EU is still blocking about £17billion (€20billion) in funds from Hungary.
In comments made ahead of the EU summit, Orban warned Von der Leyen that the bloc is “about to make a terrible mistake”.
Speaking about the union's plans to begin membership talks with Ukraine - and provide 50 billion euros in financial aid - Orban said: “The European Union is about to make a terrible mistake, and they must be stopped.
“This is a mistake; we are destroying the European Union.”