Would Ukraine membership really cost “12 annual budgets” to the EU?

In difficulty in his country, the Hungarian Prime Minister puts everything on the rejection of the membership of Ukraine to the European Union (EU). One year before the legislative elections, and with polls that keep having it tumbled, Viktor Orban launched a large consultation in his country. Organized from April 14 to June 20, it aims to probe the inhabitants about a possible European integration of kyiv. Beyond the arguments according to which membership devastates the economy and agriculture of the country, the pro-Russian government ensures that it would cost all the Member States the equivalent of “Twelve annual budgets”.

An argument brandished for the first time on April 14 by Balazs Orban, a close adviser to the Prime Minister. During an economic conference (new window) organized in Budapest, this deputy responsible for advisor the head of government on his foreign policy ensures that “The integration of Ukraine into the European Union will cost the EU a total of 2.5 billion euros”. “Or more than twelve times the EU budget for 2025”fixed this (new window)year at more than 199 million euros. A figure that comes from “Calculations of the Hungarian Foreign Affairs Institute” and resumed such (new window)What on social networks by relays of Russian propaganda in France. But what is this evaluation really based on?

A deceptive calculation

During his speech at the Economx Money Talks forum, Balazs Orban adds the cost of reconstruction of Ukraine, which he estimates at 1,000 billion euros, to which he adds $ 100 billion per year for “Maintain the operation” of the country, “largely covered by the EU”. On what basis of calculation? Impossible to know it. There is no official document at this stage (new window)from the Hungarian government in which these colossal expenses are dissected.

In addition, no reliable source confirms this estimate. On the contrary, assessments from credible institutions and collectives are radically diverting these alarming conclusions. Starting with the work of the Bruegel reflection center (new window). Based on the current regulations and the budgetary structure voted until 2027, this rather pro-European group, estimates that a membership of Ukraine would cost between 110 and 136 billion euros spread over seven years depending on the size of its population and the territory.

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This figure includes 85 billion euros from the common agricultural policy (new window)Ukraine becoming the main beneficiary of the continent. A sum that could drop if kyiv cannot reconquer its territories occupied by Russia. To which the think tank adds 32 billion euros relating to the cohesion policy and 7 billion euros from other programs. Note that certain funds, including that for development projects, are limited. Without it, Ukraine could have benefited from 190 billion euros for cohesion policy.

European institutions have officially published no projection. But in an internal note, unveiled in October by the Financial Times (new window)the EU council tapped on an effort of 186 billion euros over seven years.

The cost of largely overestimated reconstruction

A formula that does not take into account the cost of reconstruction of Ukraine, which Balazs Orban estimates at 1,000 billion euros. An authentic figure, which is found in a published analysis (new window)In January 2023 by the European Policy Analysis Center (CEPA). However, it represents the highest fork (new window)of all estimates spanning ten years. In a joint report (new window)Published last February by the Ukrainian government, the World Bank, the European Commission and the UN, this cost is much lower. It is actually rather valued at $ 524 billion in the next decade, or 506 billion euros.

The fact remains that it is misleading to include this amount in the expenses that will return to the European Union. The cost of reconstruction will indeed be the most part of national private companies, investments and loans. Still in the report published in February, financial institutions believe that the private sector “could finance a third of the total reconstruction needs provided that adequate reforms are implemented”. To which to be added European and international investments already underway, with agreements established with the United States, Canada and Japan.

In summary, the Hungarian advisor has largely overvalued the cost of possible membership in Ukraine. According to the work of researchers from the Bruegel group, specialized in financial and macroeconomics, this Ukraine membership project will not represent the annual budget twelve times. But between 0.1 % and 0.13 % of EU GDP.

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