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The spending plans of France and the Czech Republic for their slices of a €150 billion European defence programme have been finalised and are expected to be endorsed by the Commission shortly, diplomats have confirmed to Euronews.
Yet, while the plans are cleared, a row between Hungary and Ukraine over a damaged pipeline risks spilling over to the loan scheme and interfere with the timeline.
Diplomats familiar said they expect the two to be treated separately, as Budapest tussles for the loan while threatening a veto over two critical aid packages for Kyiv
The Commission, however, told Euronews that the plans “are still being assessed”, casting uncertainty over when any formal announcement might be made.
A total of 19 member statesapplied for financial assistance under the Security Action for Europe (SAFE) financial instrument. The Czech Republic, France, and Hungary are the only ones still awaiting the Commission’s approval.
The Commission’s endorsement of the 16 other plans was done in two batches, raising questions about whether the executive might want to move ahead with endorsing the three remaining plans together or split the announcements.
The Commission and Budapest are currently involved in a standoff over Hungary’s decision to veto a €90 billion loan for Ukraine and a 20th package of sanctions against Russia over an energy dispute with Kyiv. The move has provoked fury among member states supportive of Kyiv who denounce a weaponisation of veto powers.
Hungarian Prime Minister Viktor Orbán, who is in the midst of an electoral campaign on the back foot, is accusing Ukraine of withholding oil transit from Russia to Hungary via the Druzhba pipeline in order to create economic instability ahead of the 12 April ballot.
Euronews understands the EU executive is trying to leverage its SAFE approval to get Budapest to lift its veto on the sanctions package, which it had hoped could be approved before the fourth anniversary of Russia’s full-scale invasion of Ukraine on 24 February.
One diplomat who spoke to Euronews urged the Commission not to link the three packages together.
“I’d say the basic principle should be that if the plan is ready to go, the European Commission should greenlight it and not wait for the others and artificially put it into bundles,” they said.
Once the Commission endorses the plans, EU ministers have four weeks to give the second and final approval, this time by qualified majority.
The 16 other plans – collectively worth over €112 billion – have already secured the two approvals and should soon start receiving up to 15% of their total allocations to start purchasing the military equipment they need.
France and Hungary are both set to receive €16.2 billion, while €2 billion has been earmarked for the Czech Republic.
SAFE, which is part of the Commission’s Readiness 2030 plan to unleash up to €800 billion into defence before the end of the decade, is meant to boost the procurement of priority defence products.
These include ammunition and missiles, artillery systems, drones and anti-drone systems as well as air and missile defence systems, critical infrastructure protection, space asset protection, cybersecurity, AI technology and electronic warfare systems.
An important criterion of the scheme is that the equipment purchased must be European-made, with no more than 35% of component costs originating from outside the EU, EEA-EFTA, or Ukraine.
The scheme is designed to be advantageous to member states whose credit rating is not as good as the Commission’s, allowing for borrowing at more competitive interest rates.