MOSCOW, Jan. 29 (Sputnik) - The European Union will cease all funding to Hungary if Budapest does not lift its veto on providing military aid to Kiev by the bloc at a summit in Brussels on February 1, the Financial Times newspaper reported on Monday, citing an EU document.

In December 2023, Hungary vetoed the enlargement of the EU's 2024-2027 budget to incorporate 50 billion euros ($54 billion) worth of macro-financial aid for Ukraine. European Council President Charles Michel told journalists then that he expected the EU leaders to unanimously approve financial aid to Ukraine in early 2024, with the next extraordinary EU summit scheduled for February 1.

Brussels outlined a strategy to target Hungary's economic weaknesses, imperil its currency and cause a collapse in investor confidence in an attempt to damage jobs and economic growth of the country so that Budapest changed its decision on providing EU funds to Ukraine, the document seen by the newspaper read.

"In the case of no agreement in the February 1 [summit], other heads of state and government would publicly declare that in the light of the unconstructive behavior of the Hungarian PM… they cannot imagine that" EU funds would be provided to Budapest, the report said, citing the document.

Without the funding, "financial markets and European and international companies might be less interested to invest in Hungary" and such measures "could quickly trigger a further increase of the cost of funding of the public deficit and a drop in the currency," the report added.

In addition, the EU Council document set out Hungary's economic vulnerabilities, including its very high public deficit, inflation, weak currency and the largest debt payments as a proportion of GDP in the EU, the report said. The document also explains that "jobs and growth … depend to a large extent" on foreign funding, which is based on high levels of EU funding.

Hungarian EU Affairs Minister Janos Boka told the newspaper that Budapest had sent a new proposal to Brussels on Saturday to reach a compromise, saying that the government was now open to using the EU budget for the Ukraine aid if other clauses were added that would give Budapest the opportunity to change its decision later, the report said.

At the same time, Boka added that if the attempt to find a compromise fails, Budapest will give preference to Hungary’s initial proposal to create a separate fund for Ukraine outside the EU budget, the newspaper reported.

Western countries, including member states of the EU, have been providing financial and military aid to Kiev since the start of Russia's military operation in Ukraine in February 2022. The EU has so far provided a total of almost 85 billion euros ($92.1 billion) in humanitarian, economic and military support to Ukraine and its people, the European Commission said in late December 2023.

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