Europe’s plan to keep Ukraine afloat

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Good morning. It's Wednesday, March 11, and this is the Brussels Playbook podcast.

The vibe in Brussels today is prepared. Hungry is still blocking the

EU's 90 billion euro loan for Ukraine and time is running out. But European countries have

contingency plans. Also on the pod, we've interviewed Hungarian Prime Minister Victor

or Barnsman in Brussels, and he tells us why he thinks Europe's rising right-wing wave

may not be ready for power. And a new report put out by the EU's climate advisors lays out plans

to tackle the carbon footprint in agriculture. With Ian still out, I'm joined by Catherine

Carsten today. She's our senior finance reporter here at Politico. Hey, Katie. Good morning, Zoya.

I have a question for you this morning because you always have these very colorful ice breakers

for people on the podcast. What's your favourite ice breaker question?

Oh, that's a good one. I mean, I do like to ask people's favourite fruit because it's unexpected.

What's your favourite fruit? I like a mango. What's your favourite fruit?

Well, I previously have said that it's a great fruit, but today I think I'm going to say that it's

a raspberry. What is the favourite response that you've had to that question?

Juicy fruit. Juicy fruit. That's a gum in Australia.

Radio, let's start with the Ukraine Hungary drama that is gripping Brussels today.

We've got a story out this morning, myself and a couple of my colleagues looking at essentially

the plan for if Hungary continues to block the planned 90 billion euro loan to Ukraine that was

promised by all 27 EU leaders in December, but that has now been walked back by Hungarian Prime

Minister Viktor Orbán. Now, this is money that Ukraine desperately needs Katie.

Yeah, absolutely. It's the bulk of the financing that it needs to keep fighting

against the Russian aggression through the end of 2027.

Now it seems that there is a potential plan B that they're coalescing around.

There's some light at the end of the tunnel in terms of Ukraine having some of that money.

Yeah, that's right. So what happened was we know that there was this 90 billion euro loan

agreed back in the December European Council summit. That's Yuko in EU speak.

But ever since the Druzhpa pipeline was struck by a Russian drone back in January,

we've had this impasse because Viktor Orbán has been accusing Vladimir Zelensky, the Ukrainian

president of for political reasons, intentionally not fixing that oil pipeline.

And so he has said he's going to block this 90 billion euro loan.

Now we have heard little tales around town in the lead up to next week's European Council summit.

That's the crucial one that there is sort of a plan B and maybe even a plan C for Ukraine.

And that involves some bilateral loans from the Nordics and the Baltics as well as some money

from the Netherlands, which would keep Ukraine afloat.

So what are the different options that they're gaming out here?

One, they manage to make Orbán budge or the alternative if they don't manage to make him budge.

What are the potential scenarios with this timeline?

So plan A is still to try to convince Orbán to get on board because he already said yes to this

loan back in December. And it's unheard of for an EU leader to say yes to something in a

European Council summit and then to reneg on that agreement. It really is something that EU

leaders, that ministers, that diplomats around town for the last month or so have been

absolutely incensed by because it really does undermine the entire point of the EU where you

reach consensus in these European Council summits and then go out and do the things that you say

you were going to do. But if Orbán continues to drag his feet, then the plan is basically

firstly to ensure that there is sufficient money to keep Ukraine afloat.

Now, previously it was reported that Ukraine was going to run out of money at the end of March,

but there's been this IMF loan that has come through. It's an 8.1 billion loan and it's actually

had a disbursement already of the first one and a half billion and that is going to be able to

keep Ukraine afloat essentially until early May. It's really interesting also if you consider

the timing, the fact that we've got the Hungarian election coming up on the 12th of April. I mean,

what's the significance of that timeframe? When are we considering that a decision might be taken?

Would that change whether we're talking about this before or after the Hungarian election?

This Hungarian election is key, you've nailed it Katie, because essentially what's happened is

that Ukraine has become a hugely polarizing and hugely weaponized issue in the Hungarian election

campaign. And Viktor Orbán has been bashing Ukraine for months, bashing Vladimir Zelensky for

months, and basically saying, I'm the guy who's going to stand up to Zelensky, I'm the guy who's

going to stop Ukraine from getting into the EU, et cetera, et cetera. There is this sense in Brussels

that once the election is over, even if Orbán wins, though he is behind in the polls, but even if

he does win, then some of the kind of heat will come out of that debate because he will have already

gotten what he wanted and he may just move out of the way as he has repeatedly done over the

course of the last four years of the war, where he has stood in the way, stood in the way, and then

essentially stepped aside at the last moment. The other option is if Peter Magger wins the election,

that's the opposition leader, who's actually a member of European Parliament, so people in Brussels

will probably know him. If he wins, the hope is that maybe the EU can dangle some carrots and

there are a few carrots to be dangled. Hungary has some frozen EU funding. Hungary wants 16

billion in loans from the EU's safe program for weapons. There's lots of carrots there.

The hope is maybe they can dangle one of those carrots and entice Magger. And I mean, those carrots

are still there for Orbán, but I think there's probably slightly less of an incentive for the EU

to dangle them considering his past record. And the timing of the Hungarian election,

it's not the only kind of crucial time frame for this, right? Everything links back to this

physical pipeline. How long it takes to be repaired if it's going to be repaired? Now Zelensky said that

they haven't fixed the pipeline, but that they could fix it in a month to a month and a half.

That would be very coincidental timing with when we might see a deal and with this election.

Absolutely. And again, you know, I think we're all reading between the lines there. And we can

see Zelensky said I don't want to fix this pipeline because what this pipeline is doing is carrying

Russian oil to Hungary and Slovakia, meaning it is funding Russia's war on Ukraine. So obviously

he doesn't want to fix it for that reason. But moreover, the bigger thing that he raises as the reason

why the Ukrainians haven't fixed it yet is because he said the Russians have attacked this pipeline

in this same location before. And what happened was we sent crews out to repair it and while the crews

were there, the Russians attacked again and took out those crews. And so they're like, well, what's

the point of us going out and fixing a pipeline that runs counter to our interests? And the Russians

might attack again and kill some more of our hurts more of our repair crew. So that's his argument

for why he doesn't want to fix it. And then you also have the irony of the fact that Russia's

profiting more than ever from its oil sales, given the massive spike in prices that we're seeing

at the moment because of the Iran situation. Absolutely. So it's doubly painful for Ukraine right now.

Absolutely. And so where we're at basically is this drushba pipeline, it is still out of commission

and will remain so it seems for about 46 weeks, which will coincide with that Hungarian election.

Depending on what happens in that election, well, we might see Peter Maggiar, we might see

Orban, but they may one way or another decide to greenlight this 90 billion euro loan.

But in the meantime, while we wait for that to occur, there is enough money in Ukraine's coffers to

keep it going through early May for now. Katie, second up today, we've got kind of a linked story

to that last one, more hungry on the pod. It's all hungry. I'm hungry. Are you hungry? I'm hungry.

We need some of it. It's all that fruit talk. I know. I need some mango and up in her.

Let me call call my mango man. Katie, we've got an interesting interview that's out this morning

that our colleague Carl Matheson has done. And it's with Frank Ferretti. He's a Hungarian born

sociologist who's risen in prominence in Europe's right wing circles. And now he's running the

MCC Brussels think tank, which has been linked to Victor Orban's government. And he has told Carl

that the MCC is being tasked with challenging the European Union's liberal consensus and helping

sharpen the rising populist right. And under Ferretti, the think tank is promoting essentially

the Hungarian Victor Orban type brand of right wing nationalism. They're rejecting federalism,

immigration policies and LGBTQI inclusion. Katie, what was something that stood out to you in that

conversation? Yeah, I mean, I think particularly in Brussels, it's not very often you hear an

interview with the annual populism is great actually. So he's a little bit of an outlier in the

Brussels context in that way. But also, I think it's really interesting how he's he's deeply steeped

in a lot of these ideas around populist movements, but yet he's kind of calling on populist parties

in Europe not to get complacent. He talks about you can win an election, but if you're not prepared

for its consequences, you become your worst enemy. Basically, he's calling out for far-right parties,

populist parties and the EU, even if they are seeing electoral success at the moment that you

need to bring the policies and the preparation to back that up. Otherwise, you're going to go nowhere

with it. Well, that's an interesting point because that is something that we've seen. There is

kind of this curse of actual power. When you've got a party, a populist party in opposition,

it's pretty easy to say no to everything and to bash various policies. It's a little bit harder

when you get power to actually govern with those principles and to figure out ways of wielding

that power. We've seen a few parties that have had some problems that were very, very popular when

they were in opposition and then kind of fizzled when they actually got power. So the five-star

movement in Italy is the one that really springs to mind to me because I remember when that was

a party that was really on the ascendancy around about a decade ago, they were these

fringe politicians that were really into populist ideas and then they got into power and very quickly

became sort of part of the mainstream and then lost all of their supporters effectively.

Yeah, it's easy to be critical when you're in opposition, but I mean, this issue of preparation,

I think it's something that we also saw a lot in the US, the differences between Trump won and

Trump too, right? Trump won. It was kind of the surprise presidency. It was very shocking,

but they didn't necessarily come with a massive policies. Whereas the second time around,

they came prepared. They had a plan. They unleashed a bunch of different executive orders on day one,

and there was a massive difference in the substance because of the preparation that they'd had.

And that's what he's saying, basically, get your act together.

I think that's totally right. And some examples of populist parties that are kind of looking like

they're on track for power. Nigel Farage's reform is surging in Britain, national rally over in

France. That's Marin Le Pen's far right party. They've got a real shot of the French presidency now.

Yeah. And I think also it's one of his pieces of guidance as well as about having more kind of

professional people around. So for reform in particular, that you know, polling really well,

it's a real potential for the UK. And he says they need, they need to recognize the fact that they

have to be more professional. He says you can't somehow magic a professional cadre of operators

through a form in particular that's significant because they've been this huge and very quickly

growing political force. But then they've had big names knocked out by individual scandals because

they haven't done the right preparation beforehand. And they haven't screened these people properly.

Yeah. It all comes back to the background checks. Do it Google.

All right. Well, Katie, definitely there's plenty more in that story for our readers to look at.

So do have a geese at the homepage. Politico.au.

Right. Oh, on to our final story of the day, Katie, you're a vegetarian.

I am passionately so you're not. I'm a passionate eater of all parts of every animal.

I remember a long conversation about pork earlier in this podcast.

Pork beef. I'll eat it all except lamb. I hate lamb.

Oh, that's not for a European review. Neither is it Australian, but if you've eaten

1992 mutton in a Ukrainian village at the base of the Kaepetian mountains,

you know what? I don't like lamb. I'm a veggie burger girl. I don't care what the

EU ruling say. Veggie burgers till they die. Well, there's a point to this riffing on vegetarianism,

though it may not seem it. It's at the EU's scientific advisors. They've published a pretty big

350-page home and it's about essentially how to tackle the emissions that we get from agriculture.

They've got a bunch of ideas, a carbon tax on food emissions, scrapping farm subsidies for

climate-damaging practices. That's not going to be the thing that farmers want to hear,

but also they reckon that all citizens should minimize their consumption of red meat and time to

get vegetarian with it. Yeah, absolutely. And as we know from covering lots of Brussels policies,

reforming farm policies and especially reforming farming subsidies always goes down super well

in EU context. That's right. Well, get ready for the tractors to ride down Rudela Lois,

carrying manure and lighting little fires. You know, honestly, like I kind of enjoy it. I remember

the big protests before Christmas and they had all of the different because they go right pass

the political offices on Rudela Lois. They had all of the different horns that would play different

songs and we were sitting in the office trying to tell what songs they were playing from these

very mangled mechanical tractor horns. Did you favor any? My favorite was Barbie Girl. Oh,

well, they are a Barbie girl in a Barbie world. Listen, I didn't love it because the stench of

burning manure is still seared within my memory in my olfactory senses. So I wasn't as big a

fan as you were. Don't you need a bit of tear gas with your coffee in the morning? I mean, it would

wake me up. Katie, this is my favorite part of the show because we've been asking our European

listeners to send in. In fact, not just our European listeners, all listeners to send in EDMs

and we have had some absolute doosies. My favorite one is the following. Nora from Norway told us,

tastes alike the butt divided. I'm very excited to finally contribute to EDM hour because I've

been listening to it in the last couple of podcasts. Tired as a dog. That's the suggestion of Nick

from Luxembourg and how he feels tuning in from Luxembourg every morning. Well, my second favorite,

I think, is Erasmus from Sweden, who says, slide in on a shrimp sandwich means to get something

easily like if you get something through an epitome. I'm going to be doing that all over the

office. I'm going to accuse Ian of sliding in on a shrimp sandwich when he comes in on Tuesday.

I'm going to be like, hey, we're juice slide in from shrimp sandwich. And we have Andrew,

who has submitted the Ukrainian expression to step on a rake again and again, meaning you step

on a rake, the handle snaps up and hits you in the face. Basically, it means a mistake that you

shouldn't make twice, which he argues as a good metaphor for the past two decades of Europe's

Russia policy. Well, we've had plenty of submissions, but please do keep them coming and tell me your

favorite icebreaker questions, folks. Listeners, right in. All right, folks, please subscribe if

you haven't already. Let us know what you think of us. Our WhatsApp number is in the show notes.

And tell some friends we'd love to spread the word. Katie, have you been spreading the word?

My WhatsApp groups have been popping off with recommendations to the girlies. Have no fears.

Preach. All right, that's it from us today, and we will be back with you tomorrow.

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