The EU will change the current system of financing military support to Ukraine in response to Hungary.

The EU plans to change its system of Ukrainian military support to bypass a Hungarian veto, circumventing the country that is loyal to the Russian Federation. On October 9, EU ambassadors are expected to reach an agreement on the terms for providing Ukraine with a €50B loan secured by profits from frozen Russian assets. Most of the funds will go to programs financed through the EU budget, and only 5% of the money will go to the Peace Fund, from which the EU finances arms for Ukraine.

This will not require unanimity, making it possible to neutralize Hungary’s veto. Kyiv will be able to allocate part of this macro-financial assistance to strengthen its defense industry, and the system of transferring weapons from the warehouses of member countries, for which Brussels provides reimbursement, will become a thing of the past.

Hungary has been blocking the Peace Fund’s eighth tranche for almost a year.