Orbán Threatens to Block EU Aid to Ukraine. EU Law Says Rule-Breakers Can Lose Funding – Not Gain Leverage.

Olga Nesterova
5 hours ago
5 min read

When Hungarian Prime Minister Viktor Orbán warned Brussels that Hungary will block “any and all” EU aid to Ukraine unless the European Union “immediately and unconditionally” backs Donald Trump’s 28-point “peace plan,” he wasn’t just making a political threat. He was colliding head-on with the basic logic of EU law.

Under EU rules, countries that violate the Union’s core values and legal obligations can lose EU funding. They are not supposed to be rewarded with leverage over everyone else’s security policy.

This matters, because Orbán is trying to turn EU solidarity with Ukraine into a bargaining chip — while Hungary itself is already under rule-of-law sanctions and has billions in EU funds frozen.

What Orbán is threatening

According to reporting based on his letter to European Commission President Ursula von der Leyen, Orbán has:

Demanded that the EU back the U.S. 28-point “peace plan” for Ukraine, which is illegal.
Threatened to block all EU financial assistance to Kyiv if it does not.

This follows a pattern: Hungary has repeatedly used its veto power to stall Ukraine’s accession talks, to water down Russia sanctions, and to block or delay packages of EU aid.

Now Orbán is tying that veto directly to a controversial plan that heavily favors Russian demands — including territorial concessions, permanent limits on Ukraine’s military, and lifting sanctions on Russia.

What EU law actually says about money and rule-breaking

The Treaty on European Union (TEU) starts with values: Article 2 says the EU is founded on respect for human dignity, democracy, equality, the rule of law, and human rights. All Member States commit to these when they join.

If a state persistently breaches these values, Article 7 TEU allows other members to suspend certain rights, including voting rights in the Council.

But the more concrete answer to your question — where is the rule about losing money? — is found in Regulation (EU, Euratom) 2020/2092, the rule-of-law conditionality regulation.

It does three key things:

Defines rule-of-law breaches that matter for the EU budget

It lists situations like undermining judicial independence, failing to prevent corruption or conflicts of interest, or allowing arbitrary decisions by public authorities — all of which can threaten “sound financial management” of EU money.
Creates a trigger:

Under Article 4(1), once it is established that rule-of-law breaches in a Member State affect or seriously risk affecting the EU budget or the Union’s financial interests, “appropriate measures shall be taken.” In plain language: if your rule-of-law problems put EU money at risk, the EU must act.
Specifies the sanctions:

Article 5(1) allows the EU to suspend approvals of programmes, suspend or reduce commitments and payments, block new commitments, suspend disbursements or loans, and even demand early repayment. In practice, that means freezing or cutting EU funds until problems are fixed.

Hungary and Poland tried to get this regulation annulled. In March 2022, the Court of Justice of the EU rejected their challenge and confirmed that the mechanism is lawful and compatible with the Treaties.

Since then, the EU has used this tool directly against Hungary:

In December 2022, EU countries agreed to suspend about €6.3 billion in cohesion funds for Hungary.
In total, between cohesion funds and recovery-plan money, tens of billions of euros have been frozen or made conditional on rule-of-law reforms.

So the legal reality is the opposite of Orbán’s narrative:

When a state undermines the rule of law, EU law allows Brussels to withhold money — not for that state to withhold solidarity from others.

Orbán’s veto vs. the EU’s duty of solidarity

Orbán’s threat relies on one political fact: many key decisions on Ukraine — especially big, multi-year financial packages — still require unanimity. That gives every capital, including Budapest, a veto.

But veto power is not an absolute right to sabotage the Union’s core interests.

Some legal scholars argue that when a Member State systematically abuses its veto in breach of the duty of sincere cooperation and solidarity (also rooted in Article 2 TEU), its vote should not be counted — allowing decisions to be taken without it under Article 238(4) TFEU.

In practice, EU leaders are already experimenting with “EU-26” formats and intergovernmental arrangements to get around Hungary’s obstruction — for sanctions, for using frozen Russian assets, and potentially for Ukraine aid.

So Orbán’s letter is less a show of strength than a demonstration of how far Hungary has drifted from the mainstream of EU law and policy, especially while it remains under a partial funding freeze.

The “Trump plan” problem: why the EU can’t just “sign”

There is a second legal fault line: the content of the 28-point “peace plan” itself.

The plan requires Ukraine to:

Accept permanent loss of territory,
Limit its armed forces,
Renounce NATO membership,
See Russia’s sanctions lifted and most frozen Russian assets returned,
While Russia makes minimal, mostly future-oriented promises not to attack again.

European leaders across the spectrum have already called this a “Russian wishlist” and warned that it rewards aggression and undermines fundamental principles like territorial integrity and the prohibition on the use of force.

For the EU, endorsing such a text is not just a political choice — it raises profound legal questions:

The EU and its Member States are bound by the UN Charter, including the duty not to recognize illegal territorial gains.
EU law itself, through Article 21 TEU, commits the Union’s external action to supporting international law, human rights, and the principles of the UN Charter.

So asking the EU to “immediately and unconditionally” support a plan that appears to legitimize conquest and forced territorial changes is asking it to walk right up to the edge of its own legal red lines — and possibly over them.

That is why most EU capitals are working instead on a counter-proposal and reiterating that any peace must be “just” and consistent with international law, not imposed on Ukraine under threat of aid cuts.

What it would mean to “give in” to Orbán’s ultimatum

If the EU were to give in to Orbán’s threat — support the Trump plan and halt aid to Ukraine in order to keep Hungary happy — it would signal three things:

Rule-of-law enforcement is negotiable.

A government already under EU funding sanctions for rule-of-law breaches would be rewarded with more leverage instead of facing consequences.
Solidarity can be blackmailed.

The principle that all states are obliged to support the Union’s fundamental interests — especially in an ongoing war on the EU’s borders — would be eroded.
EU law takes a back seat to transactional politics.

Both the rule-of-law conditionality mechanism and the Union’s obligations under international law would be treated as flexible bargaining chips, not binding commitments.

By contrast, upholding EU law would mean:

Continuing to enforce conditionality against Member States that undermine the rule of law and the Union’s financial interests.
Finding legal and political ways to bypass a bad-faith veto where necessary, so that Ukraine is not held hostage to domestic politics in Budapest.
Working on a peace framework that aligns with EU and international law, rather than one that forces unilateral concessions under duress.