Hungary’s Refusal to Sanction Russia Tests E.U. Ahead of Ukraine Summit

European Union leaders meet in Brussels on Thursday, hoping to approve a landmark multibillion euro fund for Ukraine that will help keep the country afloat for the next four years, no matter what happens on the battlefield, or in the U.S. Congress threatening to cut support.

The only thing standing in their way is Prime Minister Viktor Orban of Hungary. Again.

A compromise with Mr. Orban, who has demanded an annual veto on the spending, has remained elusive, meaning that the unanimity required for such a deal among the 27 E.U. states still seems out of reach. If Mr. Orban continues to stand in the way, E.U. leaders have made clear they are ready do whatever is necessary to support Ukraine and are prepared to work around him — or even to punish him.

Yet even if the remaining 26 leaders are not forced to go ahead without Mr. Orban, a larger problem is now firmly front and center: What will the E.U. do about its Hungary problem?

For a small country that accounts for just 1 percent of the bloc’s economic output, Hungary has been a big headache.

It has been at loggerheads with the E.U. for years over its transgressions against E.U. norms and values pertaining to the rule of law. And it has consistently slowed, shaved or stymied a range of European ambitions, including some sanctions against Russia as well as Sweden’s bid to enter NATO.

But Hungary’s role as spoiler in E.U. efforts to unite behind Ukraine, and Mr. Orban’s personal alliance with President Vladimir V. Putin of Russia, are now seen by his peers as a security threat to Europe. And it is one, they say, that they will not tolerate.

That makes the current standoff with Mr. Orban qualitatively different than those that have come before, and a showdown that may portend a deeper rupture.

Boogeyman and Piggy Bank

Despite mounting threats and reprimands from his E.U. partners, Mr. Orban has persisted in leading his country deeper into an illiberal path.

While that course has given Mr. Orban outsize prominence, it has also become increasingly expensive for his country.

Hungary’s legal discrimination against L.G.B.T.Q. people, its dismantling of anti-corruption structures, and its hijacking of the judiciary have led the European Commission, the E.U.’s executive branch, to freeze tens of billions of euros in funds until Hungary makes changes.

Hungarian officials tried to convince the commission that reforms are coming, and they have put in place some changes in exchange for frozen funds. But every time the bloc has had to make a decision that requires unanimity — particularly when it’s come to support for Ukraine and sanctioning Russia — Mr. Orban has seized the opportunity to use his veto power as leverage to try and extract concessions.

There is political advantage for Mr. Orban at home as well. Since his election in 2010, the bloc has been instrumental to his political identity. He has painted it as the “woke globalist” boogeyman he is protecting Hungary from.

The E.U. has become a catchall scapegoat for Hungary’s economic, demographic and other problems — and an easy punching bag that Mr. Orban uses to try and position himself as the leader of a pan-European movement in defense of national sovereignty and traditional values.

But the E.U. has plenty of leverage, too, and it will be looking to use all of it to strike a compromise with Mr. Orban at Thursday’s summit.

Few countries have benefited more from E.U. funding than Hungary. The bloc has been Hungary’s piggy bank, a source of vital funding that Mr. Orban has tapped to extend subsidies and handouts that have in turn bolstered his political position.

Until disputes with Brussels began disrupting the flow of money, Hungary was the third-largest net recipient of E.U. funds, meaning it took out billions of euros more from the E.U. budget than it put in, according to the Center for European Policy, a German research group.

After tripping into recession in 2023, Hungary now needs that European money more than ever as it struggles to revive anemic growth, fill a big hole in the budget and restore confidence in its sagging national currency, the forint.

The Orban Enigma

Mr. Orban has become not only more obstinate, in the view of his E.U. partners, but also harder to read.

“Lately people are less sure of what’s going on with Orban, and they think he’s more unpredictable,” said Camino Mortera-Martinez, who leads the Center for European Reform, a think tank.

Briefing reporters ahead of the summit, senior E.U. officials readily acknowledged that, unable to draw on hard facts to predict Mr. Orban’s next move, they’ve resorted to psychoanalyzing him.

Until this point, one key assumption in E.U. circles has been that Mr. Orban is mostly motivated by money: Give him some, and his objections to E.U.’s Ukraine policies evaporate.

That thinking underpins a long-held belief in Brussels that rupture with Hungary is avoidable because Mr. Orban, if not convinced, can at least be bought.

Mr. Orban insists that his objection to sanctioning Russia and committing more help for Ukraine is about principles, not cash, and that he simply disagrees that Russia threatens Europe’s security.

Mr. Orban wants disbursements from the E.U. fund to be subject to annual unanimous approval, claiming that he wants to safeguard E.U. money.

Most observers decipher Mr. Orban’s demand as an effort to create an annual opportunity for himself to weaponize his veto and demand E.U. funds that have been withheld from Hungary. But there are other interpretations.

“One of the theories going around is that he’s been paid by Putin,” Ms. Mortera-Martinez said, citing Mr. Orban’s decision to skip an E.U. summit and instead travel to Beijing and be photographed with the Russian president as a particularly difficult moment.

Another theory is that Mr. Orban believes that the world is about to drastically change in his favor as his political positions — conservative Christian values, anti-migration policies and pro-Russian views — are on the ascent.

“He has seen that nativist forces are winning in E.U. member states, but also that Trump can win, and that could completely change the approach that the European Union has towards Ukraine,” Ms. Mortera-Martinez said.

Whatever the case, the souring mood toward Mr. Orban will be palpable as he joins the other E.U. leaders in Brussels. If the summit ends with no Ukraine deal, the voices arguing that he should be more decisively isolated will likely grow.

But devising ways to Orban-proof their decisions will be a painful task, given that the E.U. is designed to be more or less permanent and that there is no appetite for drama ahead of elections across the European Union for the bloc’s parliament this June.

If Mr. Orban comes around at the summit, his peers will be willing to help him present the outcome as a personal victory. But he may need a new playbook going forward, and he will struggle to find friends in the room.

“Viktor Orban has become sort of this pantomime villain,” said Jacob Kirkegaard of the German Marshall Fund, “and leaders see him as a bad-faith actor.”

“He’s running out of political rope because of his attitude, and because the stakes have gone up,” Mr. Kirkegaard said. “He’s picked a really bad hill to die on.”

Andrew Higgins contributed reporting from Warsaw, and Monika Pronczuk from Brussels.