Hungary has refused to provide any military equipment to Ukraine and is not allowing other EU or NATO members to go through its territory to make the deliveries to Ukraine.
Hungary is blocking the release of funding totalling €500 million earmarked for military aid to Ukraine, Euronews has learnt.
Three diplomats from separate EU countries have confirmed to Euronews that Budapest is so far vetoing the disbursement of the European Peace Facility (EPF) mechanism money.
One of the sources described it as a "violation of a gentlemen's agreement" and "an attempt to undermine EU unity".
Euronews has reached out to Hungarian authorities for comment.
Discussions in the working group are still ongoing, one of the diplomats told Euronews, adding that they're now hoping to reach a deal on Monday.
As this pertains to foreign affairs, unanimity from all 27 member states is required for the funds to be released.
The EU has so far disbursed €3.1 billion for military equipment to Ukraine through six tranches of the EPF — more than half the €5.5bn allocated to the fund for the 2021-2027 period.
Set up in 2021, the EPF is an instrument through which the bloc provides its partners' armed forces with equipment and infrastructure in a bid to prevent conflicts, build peace and strengthen international security.
Foreign ministers agreed last month to top up the pot with an extra €2bn for 2023, given the pace at which it has been depleted since Russia launched its full-scale invasion in late February 2022.
Budapest has so far fulfilled its conditions under the terms of the EPF. The off-budget instrument is financed through contributions by member states based on a Gross National Income distribution key.
However, the Central European country's leadership has refused to provide any military equipment to Ukraine.
Additionally, the government in Budapest is not allowing other EU or NATO members to go through Hungarian territory to deliver the equipment to neighbouring Ukraine -- despite belonging to both organisations.
It has also criticised EU sanctions against Russia, which all 27 countries must also unanimously approve, and successfully wielded its veto power to secure significant carve-outs.
The EU embargo on Russian oil, for instance, concerns seaborne oil and does not apply to deliveries via pipelines on which Budapest is dependent.
Hungary also temporarily blocked the approval of a crucial €18bn aid package for Ukraine last month, only removing its veto after other countries agreed to lower the sum of EU funds frozen under the new rule-of-law mechanism.
The government of populist far-right Prime Minister Viktor Orban has struck a new deal with Russia's gas giant Gazprom despite an EU vow to reduce dependence on Russian fossil fuels and rob the Kremlin of key revenues to wage its war.
It is unclear what Hungary's objection to the release of the seventh tranche of the EPF is at this time.