Hungary s Prime Minister Viktor Orban arrives for the EU-Western Balkans Summit, in Tirana, Albania, Tuesday, Dec. 6, 2022. AP
EU finance ministers also postponed any decision to punish Hungary by withholding billions of euros for failing to implement solid rule-of-law reforms.
Instead of unanimous support for aid to Ukraine, Hungary's veto made sure that the EU's other 26 member states would need work out a more complicated technical plan to keep aid flowing to Kyiv in the new year.
"In the end, agreement was found on formulations that allow a flexible and quick way to deploy funds to Ukraine without fundamentally changing the way the EU manages its funds.
I say agreement, but in the reality that agreement was minus one,'' said Tuomas Saarenheimo, the chairman of the EU Council Economic and Financial Committee.
Many nations see Orban's evasive tactics as a thinly veiled attempt to blackmail the EU into releasing billions in regular funding and pandemic recovery cash that has been held up.
The EU's 27 nations have until Dec. 19 to decide, and EU leaders meet for a two-day summit next week, increasing chances that the issues would still need to be resolved at a later date.
EU nations have been mulling for years whether to punish Orban for what he calls his brand of ``illiberal democracy'' but what is seen by many others as unfit for the EU's traditional sense of Western democratic liberalism.
On top of that, Orban also has angered the bloc's officials with his repeated criticism of EU sanctions targeting Russia over President Vladimir Putin's war in Ukraine.
"Viktor Orban is abusing the veto like no one before him. . He even takes funds for Ukrainian hospitals hostage for this. He is escalating the situation completely,'' said Daniel Freund, a member of the Green party and a parliamentary negotiator on the rule of law issue.
"The EU will find ways to support Ukraine even without Hungary. But that means: more time, more effort, more costs. Viktor Orban could not have given Putin a nicer present today,'' Freund said.
The EU's executive branch proposed that the bloc suspend about 7.5 billion euros ($7.5 billion) in regular funding to Hungary over concerns about democratic backsliding and the possible mismanagement of EU money.
The Commission also wants to put conditions on Hungary's pandemic recovery plan worth 5.8 billion euros and insists Budapest implement 27 "super milestones'' on democratic reforms to unlock the funding.
Hungary already agreed to 17 anti-corruption measures, including the creation of a task force and changes to its public procurement rules, but the Commission wants to see more action.
The money can be frozen under a recently introduced conditionality mechanism that allows the EU to take measures to protect its budget.
Any action to suspend the funds must be approved by the EU member countries, and this requires a "qualified majority", at least 15 countries representing at least 65% of the total EU population.