EU eyes approval for €90B Ukraine loan on Wednesday

BRUSSELS — EU ambassadors are poised to approve a €90 billion loan to Ukraine on Wednesday — if Russian oil transit to Hungary resumes in time.

In a sign of optimism they can get the deal over the line, the Cypriot presidency of the Council of the EU put the Ukraine loan on the agenda of a meeting of the EU’s 27 ambassadors on Wednesday. If oil flows resume before then, Hungary is expected to drop its opposition and the loan will be approved, four EU diplomats, who were granted anonymity to discuss the sensitive talks, told POLITICO.

Hungary’s outgoing Prime Minister Viktor Orbán said on Sunday that he will drop his veto of the loan as soon as oil transit through the Druzhba pipeline — which was damaged in a Russian strike in January — is restored. Ukrainian President Volodymyr Zelenskyy announced last week that the pipeline would be operational by the end of the month, but diplomats said there’s a strong chance flows could resume before Wednesday’s meeting.

If the loan is approved this week, Kyiv would be set to receive the money in May, offering relief to Ukraine’s war-battered economy as it continues to fend off Russia’s full-scale invasion, now in its fifth year. Once Hungary lifts its veto the European Commission would be able to disburse the funds after completing technical checks expected to take a few weeks.

After initially agreeing to the loan in December, Budapest blocked it in February as a dispute flared over the Druzhba pipeline. Orbán accused Zelenskyy of slow-walking repairs to the infrastructure in retaliation for Hungary’s friendly relations with Russia.

In a sudden turnaround, Zelenskyy committed to repairing the pipeline shortly after conservative opposition leader Péter Magyar defeated Orbán in last Sunday’s election. Magyar has not yet taken office.

Seb Starcevic and Jacopo Barigazzi contributed reporting.