EU leaders meet again to sway Hungary’s Orbán over Ukraine aid

By Editor On Feb 1, 2024

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Good morning. EU leaders exasperated by Viktor Orbán’s increasingly obstructionist tactics will try once again to persuade him today over the bloc’s €50bn aid package to Ukraine.

In its bid to convince the Hungarian prime minister, Brussels has fluctuated between offering financial incentives and exploring the withholding of all EU funding.

A last-minute offer yesterday involved holding annual reviews of the aid but fell short of Orbán’s demand for the ability to veto continued funding, according to a draft seen by the Financial Times.

Another plan, reported by the FT on Sunday, sought to strong-arm him into agreeing by sabotaging Hungary’s economy. This prompted fierce backlash from Budapest and frantic diplomacy from other EU officials.

A shrewd negotiator, Orbán has a long history of blocking EU decisions to extract concessions. But the greater Orbán’s intransigence, the more uncertain European diplomats and officials seem about his objectives — and his price.

Ahead of today’s emergency summit in Brussels, our Big Read asks: what is the endgame for Europe’s chief disrupter?

The FT View: There are more sensible ways to rein in Orbán than sabotaging his country’s economy, writes the FT’s editorial board.
Europe Express: Brussels bureau chief Henry Foy discusses the diplomatic effort to convince Orbán in today’s newsletter. Sign up here if you’re a premium subscriber, or upgrade your subscription here.

Here’s what else I’m keeping tabs on today:

Interest rates: The Bank of England is expected to hold rates for a fourth straight month, following the US Federal Reserve’s decision to do the same yesterday even as chair Jay Powell tried to cool speculation that it would begin cutting rates soon. Sweden’s central bank is also expected to leave rates unchanged.
Economic data: The EU has preliminary inflation estimates for January and unemployment figures for December. Manufacturing purchasing managers’ indices are published in France, Germany, Italy and the UK.
UK Labour: Leader Sir Keir Starmer and shadow chancellor Rachel Reeves speak at their party’s sold-out business conference in London. As Labour woos the private sector, companies want more clarity on how the opposition would behave in office, writes the FT editorial board.
Companies: Julius Baer’s chief executive and a board member are leaving over its exposure to crisis-hit Austrian property group Signa as the Swiss bank publishes results today. Shell and Roche also report, while beverage maker AG Barr and mining company Glencore release trading updates.

What should the EU do about its Orbán problem? Let us know what you think at firstft@ft.com — Tee

Five more top stories

1. Exclusive: Ousted Endeavour Mining chief Sébastien de Montessus has fought allegations of sexual misconduct towards female employees, according to people with knowledge of the claims. The revelation adds to the woes of the French executive who was sacked by the FTSE 100 gold producer last month after its board said he had instructed an irregular $5.9mn payment. Read the full story.

2. Exclusive: KKR has raised a record $6.4bn for its latest Asian infrastructure fund, capping a month of frenzied investment activity in the sector at a time when broader private equity fundraising has slowed. With the addition of a second fund, the New York-listed private equity group’s Asian infrastructure business now has $13bn in assets under management. Here are the Asian countries KKR is betting on — and avoiding.

3. Exclusive: An Informa employee attempted to deny an Israeli company access to an event in London, incorrectly claiming that the FTSE 100 group’s sanctions and compliance policy blocked the Tel Aviv tech company from buying a ticket to the conference, according to email correspondence seen by the FT. Ellesheva Kissin has the full story from London.

4. Silvio Berlusconi’s Sardinian beach estate is going on sale for €500mn after his five children agreed to sell the asset, according to people with knowledge of the transaction. The luxurious property owned by Italy’s late former prime minister has hosted several world leaders including George W Bush, Tony Blair and Vladimir Putin. Here’s more on the lavish Villa Certosa.

5. Blackstone chief Stephen Schwarzman was one of the top donors to Chris Christie’s abortive campaign for the US Republican presidential nomination. Schwarzman, who was once an ally of Donald Trump, gave $2mn to a pro-Christie super Pac, Tell It Like It Is, in late August, according to new federal filings. The former New Jersey governor dropped out of the race last month. Here were Christie’s other supporters.

Trump vs Taylor: The former president’s allies have aimed a conspiracy-fuelled rhetorical offensive at Taylor Swift, amid fears that the pop star could sway the 2024 election in favour of Joe Biden.
Ron DeSantis: A federal judge has dismissed Walt Disney’s claims that Florida’s Republican governor violated the company’s free speech rights by “retaliating” for its stance on the “Don’t Say Gay” law.

News in-depth

Nearly 12 months after the Windsor framework was agreed, Sir Jeffrey Donaldson now says his Democratic Unionist party will return to the power-sharing executive it has been boycotting since 2022, having secured supplementary assurances set out in the UK government’s plan for Northern Ireland. The 76-page Command Paper entitled “Safeguarding the Union” will be voted on in Westminster later today. Here are the main points.

We’re also reading . . .

Musk’s pay setback: Every tech company with a founder at the helm faces the “how much” question — but there are many ways to answer, writes Richard Waters.
Artificial intelligence: Stanford professor Erik Brynjolfsson speaks to the FT about what generative AI will mean for productivity, jobs and the society of the future.
EU markets: The bloc’s financial sector is struggling to pump sufficient capital to support companies and the economy, writes Rebecca Patterson, former chief investment strategist at Bridgewater Associates.

Chart of the day

The attacks by Houthis rebels in the Red Sea have indeed added significant costs to container shipping, but it is important to put things into context, writes Chris Giles. This is nothing like the supply chain nightmares of 2021 and 2022 that fuelled the worst inflationary episode in the past 40 years.