Hungary's economy targeted in EU retaliation plan

In a tense diplomatic standoff, officials in Brussels have allegedly devised a clandestine strategy aimed at Hungary's economy should Prime Minister Viktor Orbán persist in blocking a €50 billion support package for Ukraine.

Reported by the Financial Times, the plan underscores the growing frustration among European capitals over what diplomats term Orbán's "policy of blackmail." Orbán, who leads the bloc's most pro-Russia state, faces mounting criticism for his obstructionist stance.

The proposed strategy, according to the FT, entails measures to destabilize Hungary's economy, including currency devaluation and undermining investor confidence.

Orbán's refusal to greenlight the €50 billion aid for Ukraine prompted an emergency leaders' meeting scheduled for Thursday to address the impasse.

The reported document outlines that if no agreement is reached at the February 1 summit, other EU leaders would publicly express their inability to provide EU funds to Budapest, citing the Hungarian PM's uncooperative behavior.

Hungary's economy heavily relies on the single market, with a significant portion of its exports destined for neighboring EU countries. European Commission data reveals that 78% of Hungary's exports go to EU states, with Germany alone accounting for 28%, followed by Romania, Slovakia, Austria, and Italy, each at 5%.

The EU has previously frozen €20 billion in funds over concerns regarding LGBTQ+ rights and other rule of law issues, attempting to coerce Hungary into alignment with EU policies.

János Bóka, Hungary's EU minister, rebuffed claims of pressure, asserting that Hungary engages constructively in negotiations and denies any link between aid for Ukraine and EU fund access.

Amid escalating tensions, some member states advocate triggering article 7 of the EU treaty, which could result in Hungary losing its voting rights if Orbán persists in blocking EU decisions.

The European Council president, Charles Michel, delayed his planned resignation amid fears of Orbán's prolonged chairmanship at summits until a successor is appointed.

While some diplomats caution against invoking article 7 as a last resort, Orbán shows no signs of yielding. Budapest's latest proposal suggests annual approval for Ukraine aid, a move EU leaders view as granting Hungary an annual veto, potentially leaving Ukraine in limbo for funds until 2027.

As the diplomatic standoff intensifies, EU leaders remain firm in their resolve, unwilling to compromise on principles or leave Ukraine's fate uncertain in the years ahead.

[With information sourced from The Guardian]