Ukraine

Officials involved in talks said one model funded by debt has gained traction as the most practical way to provide support if Orbán refuses to drop his veto at a planned summit on February 1.

This scheme would involve participating member states issuing guarantees to the EU budget, enabling the European Commission to borrow up to €20bn on capital markets for Kyiv next year, people briefed on the talks said. The precise terms are still under discussion and the final amount would be set according to Ukraine’s needs, they added.

The arrangement is similar to the structure used in 2020 when the commission provided up to €100bn in cheap financing to EU countries for short-term work-support schemes during the Covid pandemic.

Crucially, the option would not require guarantees from all the EU’s 27 member states, as long as the main participants included countries with top credit ratings. That would allow the EU to sidestep Hungary’s veto because it would not require unanimous backing.

Some countries, including Germany and the Netherlands, would need parliamentary approval for national guarantees, a process that officials hope could be completed in time to provide aid to Ukraine by March.