The EU-Ukraine loan worth €90bn is expected to move forward as European Union ambassadors meet in Cyprus, with growing optimism that months of deadlock could soon be resolved.
The funding package, agreed last December, has been stalled since February after Hungary blocked the payout amid a dispute over Russian oil supplies.
Hungary’s outgoing prime minister, Viktor Orbán, had vetoed the EU-Ukraine loan following disruptions to oil flows through the Druzhba pipeline.
However, Budapest has now indicated it may lift its opposition after Ukraine confirmed repairs to the pipeline, allowing oil supplies to resume to Hungary and Slovakia.
Orbán said over the weekend that once deliveries restarted, Hungary would no longer stand in the way of approving the loan.
The prospects for the EU-Ukraine loan have also improved following Orbán’s recent election defeat, ending his 16-year tenure.
Hungary’s incoming leader, Péter Magyar, has prioritised resetting relations with Brussels, which EU officials see as key to breaking the impasse.
Support seen as critical for Kyiv
EU foreign policy chief Kaja Kallas said ahead of the meeting that positive decisions are expected, stressing that the EU-Ukraine loan is vital for Kyiv.
Ukrainian Deputy Prime Minister Taras Kachka described the funding as “a matter of life and death”, noting that around two-thirds will support defence needs, with the remainder allocated to financial assistance.
The dispute centred on the Druzhba pipeline, a key route for Russian oil into Europe, which was damaged earlier this year during Russian strikes.
Ukraine said repairs had been completed, while Hungarian energy firm Mol confirmed oil flows were set to resume.
Kyiv had previously rejected accusations of an “oil blockade”, insisting the disruption was caused by infrastructure damage.
EU leaders push to unblock funds
Ukrainian President Volodymyr Zelensky said he had discussed the issue with European Commission President Ursula von der Leyen and European Council President António Costa, expressing confidence that there are no longer grounds to block the EU-Ukraine loan.
Next steps
If approved, the EU Ukraine loan could still take several weeks before funds are disbursed to Kyiv, according to Ukrainian media.
The decision is expected to be a key test of EU unity as the bloc continues to support Ukraine amid ongoing conflict and geopolitical tensions.
Also read: Zelensky expected at Cyprus EU summit
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