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European Union diplomats approved Wednesday the payment of a 90 billion euro ($144 billion) loan to Ukraine and a new package of sanctions against Russia, after Hungary lifted its veto, the Cypriot bloc's president said.
The 27 countries of the European Union are now expected to sign the agreement on Thursday afternoon, said the spokesperson of the Office of the President.
The EU agreed last year to a loan to keep Ukraine afloat until 2026 and 2027. But Hungary refused to sign the deal as pro-Russian Prime Minister Viktor Orban accused Ukraine of sabotaging Russian oil shipments through a pipeline damaged by a Russian attack.
The standoff also delayed new sanctions against Russia, which the EU originally intended to implement to mark the fourth anniversary of Russia's full-scale invasion of Ukraine on Feb. 24, 2022.
The stumbling block was finally cleared when Hungarian oil giant MOL said on Wednesday it had been informed that the Ukrainian operator of the Druzhba pipeline was ready to resume transporting crude oil to Hungary and Slovakia.
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MOL said it expects the first shipments to arrive in Hungary and Slovakia as soon as Thursday. Both countries remain dependent on Russia for much of their energy.
Ukraine's prospects for a loan had already improved when Orban lost Hungary's parliamentary election on April 12. The leader of the winning party, Peter Magyar, said he would no longer block EU funds for Kyiv, even though he is expected to take office next month.
The idea of joint EU borrowing against the EU budget seemed impossible at first as it required consensus and faced opposition from Orban.
Hungary, Slovakia and the Czech Republic agreed to let the plan go ahead after EU leaders agreed it would not affect them financially.
The interest-free loan is to cover two-thirds of Ukraine's needs for the next two years, estimated at 135 billion euros (216 billion Cdn) in total.
Each year, 28 billion euros ($44 billion Cdn) will be spent on Ukraine's military needs and 17 billion ($28 billion Cdn) on general budget needs.
Ukraine is not expected to pay money out of its own funds, and the capital is due only if Russia pays war reparations after the conflict ends.
Russia has 210 billion euros ($351 billion Cdn) worth of central bank assets frozen in the EU that could be used for repayment.
The plan was designed to effectively use frozen Russian funds to aid Ukraine without confiscating the money, a move rejected as a legal risk.
Brussels expects other developed countries sympathetic to Ukraine to provide all the funding, which has already been promised in 2026.
The morning after the stunning election result, Hungarians reacted to the end of Viktor Orbán's 16 years in power. There are still questions about how the new government, led by Péter Magyar, will shake things up.
