EU agrees $54 billion in new aid for Ukraine as conditions help Hungary fall in line

WATCH: Ross Cullen reports on the latest from the EU summit in Brussels

European Union leaders unanimously agreed to extend $54 billion in new aid to Ukraine following weeks of resistance from Hungary and winning praise from Kyiv.

Before the summit started, EU leaders piled pressure on Hungary to lift its block, telling Prime Minister Viktor Orban to pick sides in what several saw as an existential challenge posed by the conflict in Ukraine. Before the announcement, Russia said that the EU was involved in "attempts to demonize Russia."

"We have a deal. Unity," said European Council President Charles Michel in a post on X. "All 27 leaders agreed on an additional 50-billion-euro support package for Ukraine within the EU budget. This locks in steadfast, long-term, predictable funding for Ukraine."

Ukrainian President Volodymyr Zelenskyy welcomed the agreement, saying the aid would strengthen long-term economic and financial stability of his country as the war approaches its third year. 

Kyiv, which relies heavily on Western aid in its battle with Moscow, said it expected to receive the first tranche of $4.87 billion from the EU in March.

The agreement comes after weeks of wrangling with Orban, who vetoed the aid package last December. He said Hungary relented over the EU deal after accepting conditions that withheld EU funds from Hungary would not end up in Ukraine and that Ukrainian aid would be used sensibly. Orban added he was pleased markets reacted positively to the agreement.

Diplomats confirmed that, in exchange for the green light from Hungary for the Ukraine aid, the bloc did not commit to releasing any of the billions of euros of EU funds intended for Hungary but frozen by Brussels over widespread concerns about human rights and the rule of law in the country.

They said the aid deal included a yearly discussion of the package and the option to review it in two years "if needed", but no clear veto right for Budapest.

"He gave some ground," said one European diplomat on Orban's concessions. "He saw that people were growing irritated, that there was a line not to cross." 

With an agreement on budget support done, the leaders were next discussing military aid for Kyiv. The bloc is seen falling short of its target of sending artillery shells to Ukraine, while a stand-off between Germany - the EU's paymaster - and other member states casts uncertainty over the future of a military aid fund that has bankrolled billions of euros in arms for Ukraine.

The Kremlin said on Thursday that European officials were talking up the prospect of a conflict with Russia, warning that the U.S. would try to make Europe foot the bill for supporting Ukraine.

Kremlin spokesman Dmitry Peskov said: "The situation is obvious: These are attempts to demonize Russia, to create the image of an enemy who is used to knock out additional money from taxpayers.

"We understand that Kyiv continues to experience problems, and the collective West is also experiencing problems. Obviously, there will be a process of trying to shift the financial burden of Washington's support for the Kyiv regime onto the shoulders of European taxpayers."

Budget unity for Kyiv

Before the summit began, leaders of Germany, Poland, Belgium and Finland were among others to say on Thursday it was crucial the 27-nation bloc agreed as one to offer aid to Kyiv from their joint-budget through 2027.

Orban, who has cultivated close ties with Moscow, has stepped up criticism of the EU's strategy to prop up Ukraine with financial and military aid.

On Thursday, he posted pictures of himself on social media walking around tractors ahead of a farmers' protest in Brussels. He and an aide to Michel posted pictures of groups of leaders seemingly discussing a draft agreement in separate huddles before they all met behind closed doors as 27.

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German Chancellor Olaf Scholz had made clear what the expectation of the other 26 EU countries was on Thursday, saying the EU was "a community in which all stand in solidarity." Polish Prime Minister Donald Tusk said time for Orban's "games" was over: "He has to consider if he is in, or out."

The EU's decision comes at a time of uncertainty over the future of U.S. aid to Ukraine. Some EU officials said that, without fresh budget support, Kyiv would run out of cash in March. Orban has had many bitter run-ins with the EU, haggling over billions of euros earmarked for Budapest in the shared EU budget but frozen over concerns about democratic backsliding.

He has also criticized Western sanctions against Russia since the Ukraine conflict began in February 2022, becoming more and more at odds with his EU peers.

A German diplomat said Orban felt he was putting himself in a position that was "not comfortable."

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