Markets 
Published on •Updated
European Union countries have agreed to release a €6.6 billion programme of military aid for Ukraine that had stalled since spring 2023, when Hungary imposed a controversial veto that paralysed the initiative.
The agreement at the political level was reached on Friday during a meeting of the Political and Security Committee in Brussels.
“That’s good news for Ukraine and bad news for Russia,” High Representative Kaja Kallas wrote on social media, announcing the news.
“Moscow’s hybrid attacks try to intimidate Europe into scaling back its support for Ukraine. Europe is doing the opposite.”
The so-called European Peace Facility (EPF) was designed to partially reimburse weapons and ammunition that member states donate to Ukraine.
In the early years of the war, the EPF was considered one of the bloc’s central lines of assistance and was regularly topped up with fresh money.
But in May 2023, Hungary, under then-Prime Minister Viktor Orbán, slapped a veto that stopped the scheme dead in its tracks.
Budapest complained about Kyiv’s decision to add OTP Bank, Hungary’s largest commercial bank, to its list of “international sponsors of war”. The name-shaming catalogue was discontinued in 2024 after pushback from Western allies.
Still, Hungary kept its veto in place, angering other capitals. The EPF eventually fell off the radar as Brussels set up new assistance programmes.
The deadlock was broken only this year when Orbán lost the parliamentary elections in April, and Prime Minister Péter Magyar came to power. Since then, member states have been negotiating the terms for the release of the €6.6 billion.
According to Kallas, the agreement reached on Friday splits the pot into three strands:
- €4.7 billion for reimbursements
- €1 billion for joint procurement of military equipment
- €900 million for the EU mission that trains Ukraine’s armed forces
Some countries will wire their share of €4.7 billion in reimbursements directly to Ukraine, Kallas said without naming them.
Several legislative acts need to be adopted before the money is actually released.
The news comes at a precarious time for Ukraine, which is staring down a $27 billion (€23.67 billion) shortfall in its Ministry of Defence.
The European Commission and the International Monetary Fund are in talks with the Ukrainian government to determine a possible solution.
On Friday, Ukrainian President Volodymyr Zelenskyy warned the budget crunch needed to be resolved between October and November to pay for drone deliveries scheduled for the first three months of 2027.
“Everyone understands that Ukraine cannot be left on its own and that more must be invested in Ukrainian-made drones and missiles, because most of this deficit is precisely the funding needed for weapons,” Zelenskyy said.
“Everyone understands how difficult it is to get through this period amid constant strikes. Ukraine will not be left alone.”
Read the full article here
