The European Union reached a deal in principle to send an 18 billion euro (US$18.93 billion) financial aid package to Ukraine and approve a minimum tax on major corporations in a big move that narrowed a rift between the bloc and recalcitrant member Hungary.
The 27 envoys of the EU nations reached a tentative agreement late Monday in a deal that also sees Budapest getting a bigger part of promised funds that had long been in jeopardy over complaints by the other member states that Prime Minister Viktor Orban had veered away from the democratic rule of law.
“Megadeal!,†the EU’s Czech presidency said on Twitter. The deal is still tentative because it needs to be signed off on but no major obstacles are expected.
Hungary had used its veto up to now to get the two major deals through, amid complaints from others that Orban was abusing his powers so he could get his recovery and aid funds.
The deal comes ahead of Thursday's summit of EU leaders and a continued rift with Budapest could have turned the meeting into a major standoff.
Under the agreement in principle, Hungary sees a pandemic recovery plan approved worth 5.8 billion euros if Budapest implement 27 “super milestones†on democratic reforms to unlock the funding. Many nations had already said Hungary had made some positive efforts.
And the nations also agreed to decrease the proposed suspension in regular aid funds by about 1.2 billion euros to some approximately 6.3 billion euros in commitments.
The deal allows Orban to claim victory because he was able reduce the penalties he faced. But he still was slapped with major fines that are likely to impact his struggling economy.
“A small but important victory†for the rule of law in the EU, said Petri Sarvamaa, the parliament's negotiator on the issue.
The EU as a whole will be able to present a united front backing Ukraine after unseemly scenes of political brinkmanship had delayed the process for long and left a needy ally in the lurch and facing a major struggle to make financial commitments next year.
Equally, the EU had been unable to live up to a commitment to stop the race to the bottom in corporate tax rates. With Monday's measure, the profit of companies with annual turnover beyond 750 million euros will be taxed at 15% or more.
The EU institutions have been in a standoff with Orban for years. They decided to go after Orban for what he calls his brand of “illiberal democracy†but which is seen by others as unfit for the EU’s traditional sense of Western democratic liberalism.
Many divisive issues with Orban remain though, not least his relationship with Russia which is seen as lenient to Moscow compared to those of his 26 partners.
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