Hungary unlocks €6.6 billion for Ukraine arms

Hungary's new government lifted its two-year veto on the European Peace Facility (EPF), the EU's off-budget fund for reimbursing countries that sent weapons to Ukraine. The released pot: €6.6 billion. Outstanding member-state claims against the fund: roughly €43 billion. Donor countries will collect about 15 cents for every euro they spent.

The veto lift was part of a broader trade. Over nine days, Budapest secured €16.4 billion in previously frozen EU structural funds, a minority rights deal with Ukraine protecting Hungarian-language schools and public administration in Transcarpathia (kormany.hu), and German diplomatic backing. Chancellor Merz, meeting Prime Minister Magyar in Berlin, pledged to help Hungary "back to the centre of Europe."

The Reimbursement Squeeze

EU foreign policy chief Kaja Kallas proposed dividing the €6.6 billion among member-state reimbursements, the EU's Ukraine training mission, and direct arms purchases for Kyiv (EEAS, Do Rzeczy). Under the EPF's original design, countries could recover about 40% of the value of donated equipment. Kallas's formula compresses that to roughly 10%.

Slovakia's Defence Minister Robert Kaliňák put the sharpest number on the gap: Slovakia expected €250 million and will receive approximately €25 million. The country donated MiG-29 fighters and S-300 air defence systems and will recover a fraction of their value. Poland faces a similar compression (Euronews). Both countries, along with Germany, rejected Kallas's proposal at the June 8 defence ministers' meeting.

Who Paid, Who Collected

The ledger rewards the country that blocked, not the ones that gave. Hungary never sent weapons to Ukraine. It held a veto for two years, then lifted it in exchange for €16.4 billion in unfrozen funds and a Ukrainian minority-rights settlement. Slovakia emptied its armouries and will recover a tenth of what it expected.

This gap is structural. The EPF was built in 2021 for modest peacetime burden-sharing, with an original ceiling of €5 billion across seven years. Full-scale war shattered that design. The ceiling rose to €17 billion, but member states transferred weapons far exceeding what the fund could cover (Kyiv Independent).

The Workaround Architecture

Rather than fix the EPF, the EU built around it. SAFE, a €150 billion loan facility for European defence procurement, operates under qualified majority voting (where decisions need a weighted majority and no single country can block alone). Poland received its first €6.6 billion SAFE tranche on May 29. The Ukraine Support Loan (€90 billion) uses enhanced cooperation, letting a willing group of states proceed while others opt out. The EPF is now the last EU military financing instrument where a single country can veto everything, and by far the smallest.

Removing the veto once does not change this architecture. Any future Hungarian government could reimpose the block, because the EPF's unanimity requirement remains in EU treaty law. Germany's foreign minister has called for replacing unanimity with majority voting in foreign policy (Deutschland.de), but activating that change itself requires unanimity. At least ten member states oppose the shift.

The Pending Fights

Kallas's compromise has not been adopted. The final allocation formula depends on a Council of the EU agreement (where member-state ministers legislate) that Poland, Germany, and Slovakia are actively contesting. An Orbán-era lawsuit against the EPF's use of frozen Russian asset revenues remains pending at the EU Court of Justice; the Magyar government has not withdrawn it.

Does the EPF still matter? With SAFE and the Ukraine Support Loan operating at multiples of its scale, the facility has become a reimbursement queue for donations already made. The countries that emptied their stockpiles first now stand at the back of a line where the payout keeps shrinking.