EU member states have agreed to unblock a €90 billion loan for Ukraine and a new sanctions package against Russia after Kyiv resumed pumping Russian oil through the Druzhba pipeline to Hungary and Slovakia, ending Budapest’s veto.
The agreement, announced by Cyprus holding the EU’s rotating presidency, launches written procedures for final approval with formal signoff expected by Thursday afternoon. The loan, initially agreed in December, is vital to sustain Ukraine’s finances through 2026 and 2027.
Hungary’s outgoing prime minister Viktor Orbán had blocked the loan since March over a dispute with Kyiv regarding the Druzhba pipeline, which carries oil to Hungary and Slovakia — both heavily dependent on Russian energy. Orbán accused Ukraine of deliberately delaying repairs, while Kyiv said the pipeline, damaged by Russian drone strikes, was being fixed as quickly as possible.
Hungary’s MOL oil firm confirmed on Wednesday that crude oil was arriving via the pipeline from Belarus and expected in Hungary and Slovakia by Thursday at the latest. Slovak Economy Minister Denisa Sakova said pressurising had begun on Wednesday morning, with oil expected to flow into Slovakia on Thursday for the first time since January 27.
Ukrainian government sources told officials in Budapest and Bratislava that pumping had restarted at 12:35 local time (09:35 GMT) on Wednesday, hours after EU ambassadors began discussing the loan. Orbán had demanded the oil start flowing again before any disbursement could occur.
Orbán lost his parliamentary seat in the April 12 election to centre-right challenger Péter Magyar, ending his 16-year tenure as prime minister. His defeat cleared the way for the EU deal, though officials had worried approval might need to wait until Magyar took office in May.
The loan will be delivered as two interest-free tranches of €45 billion each in 2026 and 2027, with €28 billion annually earmarked for military spending and €17 billion for general budget needs. Funds will be borrowed on capital markets backed by the EU budget, though Hungary, Slovakia and the Czech Republic are exempt from participating in the joint borrowing due to prior opt-outs.
EU foreign policy chief Kaja Kallas said the loan was not only critical for Kyiv but also a signal that Russia cannot outlast Ukraine. Ukrainian Deputy Prime Minister Taras Kachka described the funding as “a matter of life and death” for Kyiv, with two-thirds allocated to defence and the rest to broader financial assistance.
The dispute had also delayed a new sanctions package against Moscow that the EU had hoped to adopt for the fourth anniversary of Russia’s full-scale invasion on February 24, 2022. With the pipeline issue resolved, both the loan and sanctions are now set for final approval.
POLITICO reported that EU diplomats expressed cautious optimism, noting the Thursday deadline was based on “very scientific calculations” of when oil would reach Hungarian and Slovak territory. One official warned of possible technical issues, while another said the flow “should be fine.”
Ukrainian President Volodymyr Zelenskyy welcomed the development as “the right signal under the current circumstances,” stressing that both support for Ukraine and pressure on Russia were necessary to end the war. He said Kyiv was fulfilling its EU obligations, including on the pipeline, and urged swift operationalisation of the support package.
Why did Hungary block the EU loan to Ukraine?
Hungary vetoed the loan due to a dispute with Kyiv over the Druzhba pipeline, with outgoing prime minister Viktor Orbán accusing Ukraine of deliberately delaying repairs to the infrastructure critical to Hungary’s oil supply.
How is the €90 billion loan structured?
The loan consists of two interest-free tranches of €45 billion each for 2026 and 2027, with €28 billion per year allocated for military spending and €17 billion for general budget needs, backed by the EU budget on capital markets.
What role did the Druzhba pipeline play in unlocking the loan?
Hungary made clear its support for the loan depended on physical oil flow through the Druzhba pipeline to its territory, and lifting its veto only followed confirmation that crude was arriving from Belarus and expected in Hungary and Slovakia by Thursday.
