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The European Union hailed its next phase of expansion as a political victory this week when leaders invited Ukraine to open membership talks.

That invitation, also issued to Moldova, delivered a message to Moscow that the EU would defend the right of former Soviet states to choose a Western orientation. Plunging the knife deep into the Caucasus, the European Council also recognised Georgia as a candidate country.

These moves came over the objections of Hungarian Prime Minister Viktor Orban, who stood isolated in arguing that EU financial resources should be saved for existing members.

Orban was persuaded to leave the room so the other 26 members could proceed with the expansion decision, but the stout Hungarian stood his ground in blocking approval of a 50 billion euro ($55bn) financial aid package to Ukraine over the next four years. A separate 20 billion euro ($22bn) military aid package for Ukraine also remains in limbo.

Kremlin spokesman Dmitry Peskov said Moscow was “impressed” by Hungary’s stance. “Hungary has its own interests. And Hungary, unlike many other EU countries, firmly defends its interests, which impresses us,” Peskov said.

During its first year, the Ukraine war appeared to give the EU a long overdue dose of political maturity and unity. The EU froze $300bn in Russian financial assets, unanimously approved 11 sanctions packages against Russia, provided Ukraine with 85 billion euros ( $93bn) in military and financial aid, and accelerated its transition to renewable energy sources as it weaned itself off Russian oil and gas.

Yet European unity and resolve appear to have faltered in the second year of the war, analysts told Al Jazeera.

A 12th sanctions package languished in intricate negotiations before it was finally approved on December 14 — with Russian diamond imports a key target. The energy transition slowed from a 20 percent increase in solar and wind power in 2022 to a 12 percent rise in 2023, according to Ember, an energy think tank.

And as the December summit demonstrated, disagreement remained over the disbursal of EU funds to Ukraine. Most noticeably, Europe made little progress towards a more robust Common Foreign and Security Policy (CFSP), continuing to entrust its security to NATO.

Everyone wants an exemption

The EU works on a consensus basis on major issues, where a single member can block a decision.

“We have the phenomenon of countries who want to define themselves as middle powers … who want to have agency in a policy area and refuse to be boxed into binary decision making,” Jens Bastian, a fellow with the German Institute for International and Security Affairs, told Al Jazeera.

“This is not an example of maturity, it’s an example of increasing transactionalism,” he said.

Hungary, for example, leveraged its veto power to argue for the release of 10 billion euros ($11bn), a third of the funds the European Commission has withheld to press Hungary into scaling back political interference in the functioning of its judiciary.

The EU’s sanctions packages have been rife with such transactionalism, said Bastian.

The Czech Republic has requested an exemption from a ban on Russian steel imports, arguing it needs heavy steel plates to build bridges. “It has asked for an exemption not for one or two years, but until 2028. You’ve had two years [of war] to reconsider your steel manufacturing capacity,” said Bastian.

It has taken until now for the EU to consider a ban on Russian diamonds because of concerns over how this will affect the Belgian economy. Some 90 percent of the world’s rough diamonds are cut in the Belgian city of Antwerp.

And when the EU banned Russian oil imports a year ago, Hungary, Slovakia and the Czech Republic were exempted because they are landlocked and cannot receive crude oil from tankers.

“I cannot remember the EU ever sanctioning one of its own members for sanctions-busting and one reason is the sheer amount of exemptions is so long,” said Bastian.

Can the EU rebuild without deficits?

The refusal to be inconvenienced has nowhere been clearer than in many EU members’ refusal to significantly raise their defence budgets.

Germany grandly announced a 100-billion-euro ($110bn) increase in defence spending when the Ukraine war broke out. That money was supposed to have been spent two years into the war, but most of it has yet to be written into the budget.

Last month Germany’s constitutional court told finance minister Christian Lindner he had to cut the 2024 budget by 60 billion euros ($66bn) earmarked for green initiatives.

That’s because Germany has a constitutional obligation to limit its annual federal budget deficit to 0.35 percent of its gross domestic product (GDP), and spending on Ukraine, rebuilding national defence, subsidising household energy efficiency and expanding renewable energy are all clamouring for fiscal attention.

That is a problem in a European Union looking to its biggest economy to lead the way in greater defence autonomy.

“Germany has pledged a lot but it has yet to deliver,” Minna Alander, a research fellow at the Finnish Institute of International Affairs and a specialist on German foreign and security policy, told Al Jazeera.

“It boils down to the question of, ‘Do we want to keep this constitutional [deficit] limit?… is there political willingness to change the thinking according to the needs that we have now,’ and we don’t see that right now … the sense of urgency is nowhere near there,” Alander said.

She called it, “one of the biggest blows in the credibility problem Germany is facing”.

A geopolitical union

Since World War II, Europe has not been – nor has it seen itself as – a major geopolitical force, ceding that status to Washington and Moscow during the Cold War.

A series of efforts to introduce qualified majority voting in the European Council, making it impossible for any one member to veto a decision, faltered between 2002 and 2005. Had they succeeded, Europe would now be in a position to take foreign policy decisions by majority vote, and wouldn’t be hobbled by a single member, whether Hungary or anyone else. That in turn would enable it to posture as a “geopolitical union”, a phrase that European Commission president Ursula von der Leyen is particularly fond of.

Qualified majorities are vital in a diverse bloc where threat perceptions differ greatly, said Alander.

“European countries have such differing perspectives on what is the greatest threat to their national security,” she said.

During the Ukraine war, the EU states surrounding the North and Baltic Seas have advocated most strongly for a common foreign and security policy that actively anticipates a Russian future threat. They have argued that if Russia should get its way in Ukraine, they might be targeted next, as Putin’s Russia attempts to claw former Warsaw Pact countries back into its orbit.

A recent opinion poll by the European Council on Foreign Relations found wildly differing majorities in favour of an expansion to include Ukraine – and even in Denmark and Poland, among Ukraine’s most ardent supporters, approval didn’t surpass 50 percent.

“We have seen the birth of a geopolitical union – supporting Ukraine, standing up to Russia’s aggression, responding to an assertive China and investing in partnerships,” von der Leyen said in her last State of the European Union speech in September.

That, believes Alander, is now a necessity, as US support for European security begins to waver.

“The most likely thing to happen … is that US support for Ukraine becomes more conditional and less secure,” said Alander. “Next year it may be that we have to play a bigger role.”