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EU Leaders Agree on Enlargement but Stall on Ukraine Funding

  • EU leaders managed to bypass Hungary's potential veto on Ukraine's EU accession, marking a significant enlargement decision.
  • The EU summit failed to finalize a funding package for Ukraine, deferring the decision to a future meeting.
  • The summit's outcomes indicate a shift in the EU's political direction, with a focus on expansion but also revealing internal divisions and challenges.
EU

The EU summit on December 14-15 brought good and bad news for Ukraine. Before the summit, most diplomats I spoke to thought it would be easier to agree on fresh EU funding for the war-torn country than to green-light the start of accession talks with Kyiv. Even the European Council President Charles Michel, speaking to RFE/RL a couple of days before the big pre-holidays meeting in Brussels, hinted as much.

But the historic decisions on EU enlargement -- not only related to Ukraine but also opening accession talks with Moldova and Bosnia-Herzegovina, as well as bestowing candidate status on Georgia -- ended up being the easiest decisions of all, with agreement reached already by early evening on the first day of the summit. So much for all the talk before -- including mine -- about the summit dragging on well into the weekend.

Instead, EU leaders couldn't agree on the 50 billion euros ($55 billion) of fresh funding for Ukraine for the next four years. The best they could do, after hours of fruitless talks, was to agree to come back to the issue in late January when a new EU summit is scheduled.

The tricky part of the enlargement decision was expected to be how to circumvent a Hungarian veto. (Read more about Hungary's objections here.) And, in the history of EU summits, it was solved in a completely new way. Hungarian Prime Minister Viktor Orban simply stood up and left the room. Before, during, and after the session, Orban kept repeating that he didn't agree with opening of talks for Ukraine -- but he did allow the other 26 to vote for it.

In the end, this meant that Hungary didn't actively veto the enlargement decision. For a conclusion to be agreed in the European Council -- which is made up of all the EU heads of state or government and defines the EU's political direction and priorities -- a quorum is needed, which in this case meant just two-thirds of the council needed to vote. Why hasn't this been done before, many EU officials and diplomats were asking. Was this a way for the EU to break impasses in the future?

While Orban maintained during the summit that neither Hungary nor the EU as a whole were ready to open EU accession negotiations with Ukraine, in remarks before the meeting he hinted that there would be a compromise. What he accentuated in those earlier remarks was that he was against the "rapid" or "fast-tracked" accession of Ukraine. And with this, he opened up the opportunity for a deal.

According to EU officials I spoke to during the summit on the condition of anonymity because they weren't allowed to speak on the record, that deal was hammered out over breakfast on the morning of the first day of the summit between Orban, German Chancellor Olaf Scholz, French President Emmanuel Macron, and the presidents of the European Commission and the European Council, Ursula von der Leyen and Charles Michel, respectively. That was the deal that the 26 leaders eventually agreed on, while Orban, presumably, was taking a bathroom break.

Deep Background: To understand the compromise, it's helpful to look at two sentences in the EU summit conclusions that the leaders signed off on. The sentences relate to the accession of Ukraine and Moldova, as these countries are paired in the enlargement process.

"The European Council decides to open accession negotiations with Ukraine and with the Republic of Moldova. The European Council invites the Council [of the European Union, where EU government ministers discuss, amend and adopt laws] to adopt the respective negotiating frameworks once the relevant steps set out in the respective Commission recommendations of November 8, 2023, are taken."

The first sentence is a clear win for Ukraine (and Moldova). When I spoke to Ukrainian officials before the summit, what they wanted most was clear and crisp language confirming that accession talks are opened. They got it -- and Hungary relented.

The second sentence, however, seems to already be kicking the can down the road and leaving some wiggle room. To start accession talks, you need to adopt a negotiation framework -- and, with that, you open up the EU candidates once again to potential delays and further Hungarian vetoes.

The European Commission actually opened itself up for this "solution" when they presented their big enlargement report in November. There they noted that they would report back to EU member states by March 2024 at the latest on the conditions that remained for Ukraine, Moldova, and Bosnia-Herzegovina.

The remaining issues for Ukraine were to adopt laws to make its National Anti-Corruption Bureau function better; address the outstanding recommendations highlighted by the Council of Europe's Venice Commission on state language, media, and education -- a sore point for Budapest as it claims that Ukraine is discriminating against its ethnic Hungarian minority; and, finally, to enact a law regulating lobbying.

Kyiv says it has already passed the first two laws and will soon enact the lobbying legislation. Addressing the EU leaders via video link from Kyiv on December 14, Ukrainian President Volodymyr Zelenskiy said Ukraine is expecting the negotiation framework will be adopted in March. That would appear to be the most logical scenario, as EU leaders are due to meet that month for a summit in Brussels. But, as ever with Brussels, don't count on it. Orban was of the opinion at the summit that Ukraine hadn't fulfilled any of the remaining three conditions. And in the end, he has a veto and is prepared to use it.

Drilling Down

  • In Orban's talks with Michel and company, there was also an understanding that the leaders will come back to the issue in one year, meaning in December 2024. This does have some logic. Firstly, there are European Parliament elections coming up in June, and after that there will be an entirely new European Commission and a fresh European Council president.
  • Some EU officials fear that to give the de facto green light to Ukraine a few months before the European Parliament elections gives populists in some EU countries a potent electoral weapon, especially with the reported rise of "Ukraine fatigue." A way around that, according to the EU officials I spoke to, would be to put the accession question on hold for a few months, with the idea being that a new European Commission could look at the situation with a fresh pair of eyes.
  • While Orban didn't ruin the party this time around, most likely he will still try to slow the process down for Ukraine and will use every possible veto at his disposal as leverage to get what he wants -- namely, the EU funds for Hungary, caution on Ukraine, but also a shift toward conservatism in the bloc. That shift is happening already, as populists with strong anti-Ukrainian views won recent elections in the Netherlands and Slovakia, and there is growing reluctance among Republican lawmakers in the United States to commit more funds to arm Kyiv.
  • If the sands shift in Orban's favor over Ukraine, the EU might have to backtrack -- either with a reduction in funding for Ukraine or enlargement at a snail's pace. While Orban was alone in opposing the opening of accession talks with Ukraine, several member states would probably prefer if Ukraine wasn't fast-tracked into the club. An official from an Eastern member state, who wished to remain anonymous as they weren't authorized to speak on the record, recently told me: "Officially, we support Ukraine's entry by 2030. But, in reality, we wouldn't mind if it was closer to 2040." That, the official said, was because there are fears that the EU wouldn't be able to reform quickly enough to accommodate new members and that Ukraine will soak up too much of the bloc's budget.
  • With Ukraine's EU accession bid finally given the thumbs up, the other EU hopefuls were also approved, as no member states had any objections. Moldova will face the same uncertainty as Ukraine as to when the accession can start.
  • For Georgia, there is now candidate status -- which was given to Ukraine and Moldova in 2022 -- meaning that Tbilisi continues to be one step behind Chisinau and Kyiv.
  • There was also more positive language on Bosnia than was previously expected. What Sarajevo got was, in effect, a conditional opening of accession talks. The language was vaguer than that used with Ukraine and Moldova, with the summit conclusions noting that, "The European Council will open accession negotiations with Bosnia-Herzegovina, once the necessary degree of compliance with the membership criteria is achieved."
  • But, after strong lobbying from Austria, Croatia, Hungary and Slovenia, another sentence was added that at least gives a bit more clarity regarding when the next step can be taken: "It invites the Commission to report to the Council on progress at the latest in March 2024, with a view to making a decision."
  • The day before the summit, the European Commission released over 10 billion euros to Hungary that previously had been frozen over rule-of-law concerns. While Orban said that he wasn't leveraging his vetoes to secure the funds, it certainly looked like a very convenient coincidence that the cash started flowing to Budapest just as Orban needed to green-light a few decisions.
  • Hungary has indicated that it wants to receive all the EU funds that are currently being withheld -- worth nearly 20 billion euros. It's more than possible that Budapest will use future veto opportunities to try to get the frozen EU funds. And there will be plenty of opportunities to veto, as all the 30-plus negotiation chapters need unanimity from all 27 EU member states to be opened and closed.
  • The first opportunity for Hungary to use another veto will be on the decision to green-light a 50 billion euro kitty for Ukraine. The other member states couldn't convince Budapest to support the kitty last week, but the issue will be discussed and voted on again in late January.
  • In case Hungary won't blink, the other 26 member states might have to get creative again, with perhaps Orban popping out for a coffee when the vote is taking place. Of course, Orban can abstain, but Budapest has to agree to it first. And while unanimity on decisions is much preferred by Brussels -- as it ensures the full weight of the EU budget is behind the loans and grants to Ukraine -- the national budgets of the 26 member states could also guarantee those Ukrainian loans. Legally it's much messier, but it might just work.
  • While the member states not agreeing on funding for Ukraine before the end of the year was a big setback for the EU (and Ukraine!), time is on their side, as Kyiv won't reportedly run out of money until the second quarter of 2024.

Looking Ahead

On December 20, the EU's sanctions regime on Russia will face scrutiny from the bloc's supreme court, the European Court of Justice (ECJ). First, it will rule on the legality of the visa ban and asset freeze imposed on one of the most high-profile Russians, the former owner of Chelsea Football Club, Roman Abramovich. A win for the billionaire could potentially lead to other high-ranking Russians being taken off the Brussels blacklist.

That same day, the Luxembourg-based court will also rule on how widely applied the EU's flight ban on Russia, which was adopted last year, should be. The EU has banned all Russian-registered aircrafts from landing on, taking off from, or flying over EU territory. That ban also applies to planes not registered in Russia but owned or chartered by Russian citizens. The applicant in the case is a Russian-Luxembourgish national with a private pilot's license who is challenging the European Aviation Safety Agency's decision to prohibit him from flying.

By RFE/RL

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Leave a comment
  • Mamdouh Salameh on December 19 2023 said:
    The EU is offering Ukraine billions of dollars it can ill Afford rather than help stimulate its own economy which grew by a miserly 0.6 percent in 2023. The EU economy is projected to grow next year by a mere 1.4 percent

    The EU has been conned to impose sanctions on Russia in the aftermath of the Ukraine conflict in which no vital interests of its have been threatened.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




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