EU approves critical €90bn Ukraine loan after pipeline dispute resolved

Ukraine’s lifeline secured amid political shifts in Hungary

European Union envoys gathered in Cyprus under the expectation that a long-stalled €90bn (£78bn) loan for Ukraine will soon be finalized. This financial support, crucial for Kyiv’s ongoing efforts, had been delayed for months due to tensions over Russian oil deliveries. The deadlock stemmed from Hungary’s Viktor Orbán, who had blocked the loan’s release in February, demanding that oil flow through the Druzhba pipeline resume before approval.

Damage repaired, political barriers fall

Ukraine claimed the Druzhba pipeline, a key energy route, was damaged in Russian strikes. With recent repairs reported, the EU now appears poised to clear the final hurdle. Orbán’s electoral loss last Sunday marked the end of his 16-year tenure as Hungary’s prime minister, easing tensions with Brussels. His successor, Péter Magyar, has signaled a willingness to mend relations, prioritizing improved cooperation with the EU.

Leaders express confidence in funding release

EU foreign policy chief Kaja Kallas emphasized the significance of the decision, stating,

“We expect some positive decisions… on the €90bn loan. Ukraine really needs this loan and it’s also a sign that Russia cannot outlast Ukraine.”

Ukrainian Deputy Prime Minister Taras Kachka called the loan “a matter of life and death” for Kyiv, noting that two-thirds of the funds will address defense needs, while the remainder will cover broader economic support.

Energy firm confirms oil flow resumption

Hungarian energy company Mol announced that Russian oil supplies would restart through the Druzhba pipeline on Wednesday, reaching Hungary and Slovakia for the first time since January 27. Orbán, serving as caretaker leader until early next month, confirmed that the loan would be approved once the pipeline was operational.

Political maneuvering and past conflicts

During Hungary’s election campaign, Orbán accused Ukraine of enforcing an “oil blockade,” arguing the EU was aligning with Kyiv against him. Satellite images showed significant damage to a Ukrainian oil facility in late January, with Kyiv asserting repairs required time and facing Russian attacks. Meanwhile, Ukraine has also targeted Russian oil infrastructure, including a pumping station in the Samara region linked to the Druzhba pipeline.

Opt-out agreement and campaign rhetoric

Orbán’s refusal to support the loan had prompted EU leaders to grant Hungary, Slovakia, and the Czech Republic an opt-out from the funding scheme. His campaign posters depicted Ukrainian President Volodymyr Zelensky alongside his rival Magyar, warning of shared threats. Zelensky, however, asserted that the EU’s conditions had been met, stating,

“There can be no grounds for blocking it any more. The EU asked Ukraine to repair the Druzhba oil pipeline, which had been destroyed by Russia. We have repaired it. We hope the EU will also deliver on the agreed commitments.”

Timeline for financial assistance remains uncertain

Despite the approval, Ukrainian media report that it could still take weeks for the funds to reach Kyiv. The resolution of the pipeline dispute now hinges on Hungary’s readiness to endorse the loan, with Orbán’s interim leadership setting the stage for a potential breakthrough.