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The European Union has approved the disbursement of a €90 billion ($106 billion) loan to Ukraine, after Hungary lifted its veto.

The development ends months of political deadlock over a critical financial support package.

EU ambassadors granted preliminary approval during a meeting on Wednesday, according to the bloc’s rotating presidency, currently held by Cyprus.

The decision follows a breakthrough in a parallel dispute over energy supplies, with Ukraine confirming it had repaired the Druzhba pipeline and resumed Russian oil flows to Hungary and Slovakia.

Pipeline resolution breaks deadlock

The restoration of oil flows through the Druzhba pipeline proved pivotal in resolving the impasse.

Hungary had previously blocked the loan, citing concerns over disrupted energy supplies after the pipeline was damaged in a January drone strike.

Hungary’s then-prime minister Viktor Orban had insisted that Ukraine restart oil transit before approving the aid package, despite having earlier agreed to the funding in December.

His stance drew criticism from other European leaders, who viewed the delay as undermining collective support for Ukraine.

The resolution of the pipeline dispute also cleared the way for EU ambassadors to approve a new package of sanctions against Russia, which Hungary and Slovakia had also been holding up.

Financial lifeline for Ukraine

The approved loan is expected to provide a crucial financial buffer for Ukraine, which faces mounting fiscal pressures more than four years after Russia’s full-scale invasion.

The funds are intended to support both Ukraine’s military operations and government functions, at a time when external financing has become increasingly uncertain.

The United States has effectively ended its assistance following the return of Donald Trump to office in 2025.

Officials have warned that Ukraine could run out of funds within weeks without additional support, underscoring the urgency of the EU’s intervention.

Political shift in Hungary

The decision also reflects a changing political landscape in Hungary.

Peter Magyar, who is set to take office as prime minister next month, has pledged to realign Hungary more closely with the European Union.

Magyar has indicated he will support continued aid to Ukraine and facilitate future sanctions against Russia, marking a shift from the policies of his predecessor.

Orban had been widely regarded as one of Vladimir Putin’s closest allies within the EU, often complicating consensus on measures targeting Moscow.

The agreement highlights both the challenges and resilience of EU decision-making amid geopolitical tensions.

While internal divisions had delayed critical support for Ukraine, the eventual compromise underscores the bloc’s capacity to align on strategic priorities.

With the loan now set to be disbursed, attention is likely to turn to the implementation of additional sanctions and the sustainability of long-term support for Ukraine as the conflict continues.

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