Hungary Drops Ukraine EU Veto, Clearing Way for Accession Talks and €40 Billion Defense Fund

Jun 04, 2026 10:30 Updated Jun 04, 2026 11:16

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Vlad Litnarovych

News Writer

Ukraine received two major signals of support from the European Union this week, as Hungary’s new government reportedly lifted its veto on billions of euros in arms reimbursements for EU countries supplying Kyiv. At the same time, Cyprus began preparations to open the first cluster in Ukraine’s accession negotiations.

Hungary has unblocked more than €40 billion in compensation for EU countries that provide weapons to Ukraine from their own stockpiles, Politico reported on June 3, citing six EU diplomats.

According to the report, Budapest announced the shift during a meeting of the EU Council’s Political and Security Committee. The government of Prime Minister Péter Magyar lifted Hungary’s veto on payments under the European Peace Facility. This off-budget EU mechanism reimburses member states for roughly 40% of the value of weapons sent to Ukraine.

The previous government of Viktor Orbán had blocked the payments for two years. Because decisions under the mechanism require unanimity, Hungary was able to stop the tranches on its own, creating a backlog of more than €40 billion owed to donor countries and forcing the EU to search for alternative ways to keep weapons flowing to Ukraine.

Germany and the Netherlands were among the countries most affected by the freeze.

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For now, the decision releases €6.6 billion, with the remaining compensation expected to follow later.

“This will be a positive reinforcement for those member states that have provided the strongest support to Ukraine,” an EU diplomat said.

EU countries still need to agree on new rules for how the funds should be used, including whether reimbursements should return to national budgets or be directed toward additional support for Ukraine. The issue is expected to be discussed at an informal meeting of defense ministers in Cyprus next week.

The development came as Cyprus, which currently holds the EU presidency, announced that it had begun preparations for the formal opening of Cluster One in accession negotiations with Ukraine and Moldova.

“Today the Cyprus Presidency initiated the preparation for the formal opening of Cluster one in the accession negotiations of Ukraine and Moldova,” the presidency said.

“This marks a significant milestone in their European integration path, and sends a strong message of EU unity and determination,” it added.

The Cyprus Presidency said it would continue working in the coming days to finalize discussions in the Council on formally opening the cluster.

“The Cyprus Presidency, guided by the merit-based approach, is delivering on enlargement, which is a strategic priority and one of the European Union’s most transformative policies,” the statement said.

Together, the two moves represent a significant political opening for Kyiv: one aimed at easing pressure on countries that have sent weapons to Ukraine, and the other moving Ukraine’s EU accession process closer to a formal new stage.

Earlier, Hungary indicated it would drop its longstanding opposition to Ukraine’s bid for European Union membership, clearing the way for both Ukraine and Moldova to commence formal accession negotiations.

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