The Hungarian opposition faced pressure as Prime Minister Viktor Orban steered his government toward a potential setback during the midterm review of the European Union budget through 2027, as a 50 billion euro aid package for Ukraine was contemplated. Negotiators from the European Parliament and the Council reached a standstill moment earlier this week on Kiev aid and the broader budget framework, ultimately approving a plan that not only covers urgent needs but also adds about 64.5 billion euros in additional funding over the next four years. The package touches on Ukraine relief, migration policy, defense, and Europe’s overall competitiveness and resilience in a rapidly changing global environment.
The multi-annual budget framework, spanning 2021 to 2027, sets the ceiling for yearly EU spending. In recent years, successive crises have strained the margin for maneuver within the budget, pushing member states to undertake a review that is unusually ambitious in its scope, given the conventional challenges of budget negotiations.
With resources tight, the European Commission last year proposed extending the budget period from 2024 to 2027. A deal could not be finalized in December, but after political resistance from Orban and his claim that the EU had placed him in a difficult position, negotiators achieved a breakthrough at the February 1 summit. Early this morning, after an initial agreement on Ukraine aid was reached on Tuesday, Council and European Parliament negotiators sealed an interim agreement on the review. This agreement would allow the EU to provide itself with roughly 65 billion euros in additional funding. Commission President Ursula von der Leyen affirmed to the European Parliament that the aid would begin to flow in March, signaling a faster-than-expected disbursement timeline and a stronger certainty for fiscal planning across member states.
Foreign policy
The review contemplates a package of 50 billion euros for Ukraine, comprising 33 billion in loans and 17 billion in subsidies. Additionally, the accord includes allocating 2,000 million euros to bolster immigrant management at borders, 3.1 billion euros to support neighboring countries’ priorities, and a further 4.5 billion euros for other foreign policy initiatives. These allocations reflect a broad strategic objective: to sustain Ukraine’s stability while reinforcing Europe’s border, defense, and diplomatic posture in a time of geopolitical tension.
The overall budget increase, pending final approval in the Council and the European Parliament plenary by late February, aims to fill financing gaps that could impede the bloc’s ability to respond to future crises and to strengthen long-term budgetary planning. A flexibilities mechanism is included with a 3,500 million euro reserve to address unforeseen needs, and an additional 1.5 billion euros is set aside to support the Strategic Technologies Platform and defense investments. The revision also introduces measures to counter rising costs linked to interest payments on the Next Generation EU program, a move intended to stabilize financing conditions as the program continues to mature and deliver on its investment promises across the Union.