'Immoral' for Hungary to hold up EU financing deal for Ukraine -Lithuania

BRUSSELS, Dec 5 (Reuters) - It is "immoral" for Hungary to hold up a European Union deal on 2023 financing for Ukraine to extract approval for Budapest's recovery plan and billions from the EU budget, Lithuanian Finance Minister Gintare Skaiste told Reuters on Monday.

Hungary has been blocking an EU plan to provide 18 billion euros next year in financial help to war-torn Ukraine through the EU budget, which would make disbursements regular and predictable, allowing the Kyiv administration to plan ahead.

EU officials say that to remove its veto, one of the things Budapest wants is EU approval for its plan (RRP) to spend 5.8 billion euros from the EU post-pandemic recovery fund. If there is no approval by year-end, 70% of the cash will disappear.

Another thing Budapest may want, EU diplomats and officials say, is for EU finance ministers to freeze a smaller amount of EU funds for Hungary than the 7.5 billion recommended by the Commission last week.

The Commission recommended that the ministers freeze the money because it is concerned it would be misspent because of unaddressed rule-of-law and high level corruption problems in Hungary. Hungary says it is addressing the issues even if some still remain to be tackled.

"There are discussions about how to deal with these three issues: one is the rule of law, the other one is RRP and the further one is Ukrainian support," Skaiste said.

"It's a bit immoral of Hungary to block the support for Ukraine and connect that with questions that are just on a different level," she said.

"One issue is having the RRP plan and money for reforms, but a different issue is to help Ukraine which is suffering, which is at war and where people are dying. It is just immoral to put everything at the same level," she said.

Whether EU finance ministers will vote tomorrow on the Commission's recommendations on the recovery plan and the freezing of funds for Hungary along with the EU financing scheme for Ukraine is to be decided on Tuesday morning after a round of talks among the ministers, diplomats said.

One of the options is that the ministers would delay voting on all of these issues until next week and ask the Commission to provide a quick review of the latest measures taken by Hungary to address the EU's concerns on the rule of law and corruption.

If the review showed Hungary made much progress, the ministers could be inclined to reduce the amount of money from the EU budget that the Commission wants frozen, which would be a win for Budapest.

"What I expect is maybe still one more week of additional discussions," Skaiste said.

She said that if Hungary continued to bloc financing for Ukraine through the EU budget, other EU governments could agree to provide the money in some other way, like they did this year.

Reporting by Jan Strupczewski Editing by Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.