EU strikes deal with Hungary over Ukraine aid, tax plan, recovery funds

European Union governments on Monday struck a deal with Hungary that sorts out financial aid for Ukraine in 2023 and Budapest's approval for a global minimum corporate tax in exchange for the EU showing some flexibility about EU funds for Hungary.

The complex deal, which came after months of wrangling between EU institutions, governments and Hungary, means Ukraine will get 18 billion euros from the EU budget next year in stable and predictable financing that will allow Kyiv to plan ahead.

Budapest also agreed to drop its veto to the OECD-agreed global minimum corporate tax of 15%.

In exchange, the EU will approve Hungary's plan of how to spend 5.8 billion euros of EU recovery funds, even though no money will flow until Budapest meets numerous additional conditions. But the approval, due by the end of 2022, means the money will not be irrevocably lost, as it would be otherwise.

EU governments also agreed to reduce to 6.3 billion euros from 7.5 billion euros the amount of EU funds for Hungary that the European Commission wanted frozen because of Budapest's problems with the rule of law.