The EU aid is to help cover Ukraine's needs for 2024-2027, with 33 billion euros in cheap loans and 17 billion in grants from the EU budget to give Kyiv stable financing as it fights off Russia's invasion.
Hungary, which cultivates close ties with Moscow, has been pushing for an annual review that would give it a right to veto the disbursements every year. This goes against the idea of predictable funding and other EU countries reject it, but if the money is to come from the EU budget, it requires unanimity among the 27 EU countries, so Hungarian consent is necessary.
In the latest version of the draft summit conclusions, seen by Reuters, EU leaders say they could hold yearly debates on how the EU money is being spent by Ukraine, based on reports by the European Commission.
This would not give Hungary a right to veto the money, but it could air concerns.
"The European Council will hold a debate each year on the implementation of the facility with a view to providing guidance on the EU approach towards the situation stemming from Russia's war of aggression against Ukraine," the draft read.
It was not clear if Hungary will agree.
Diplomats have said Budapest wants not only an annual veto right, but also does not wish to contribute to higher servicing costs of joint EU borrowing for the recovery fund, arguing it had not received its money because of rule of law concerns.
Because the recovery funds for Hungary are still frozen and the scheme runs out in 2026, Budapest also wants the EU to extend the life of the programme by two years to 2028.
EU diplomats and officials argue neither an exemption from contributing to higher interest costs nor an extension of the recovery fund programme are legally possible.
($1 = 0.9240 euros)
(Reporting by Jan Strupczewski, writing by Philip Blenkinsop; editing by Julia Payne and Andrew Cawthorne)
