The Strategic Ripples of Orbán’s Defeat - Critical Point #39

Good morning (afternoon, evening), this is the 39th edition of Critical Points, our roundup of key links and stories designed to help you navigate the current economic, political, technological, and social landscape.

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This week, we look at how an electoral shift and a series of defence agreements are reshaping global political and strategic dynamics. The elections in Hungary and Ukraine’s defence agreements in the Gulf are converging events: they change the balance of power inside Europe, alter Europe’s relationship with the wider world, and raise new questions about America’s role as guarantor of the global order. We talk about:

• European Consequences of Orbán’s Electoral Defeat

• Defence Agreements Between Ukraine and Gulf Countries

• Approval of the EU Loan to Ukraine

🗳 The electoral defeat of Viktor Orbán in Hungary has strengthened its support for Ukraine – more on this below – and has caused a shift in European policy towards Israel.

🇭🇺 Under Orbán, whose government maintained close ties with Russia, Hungary had blocked or slowed down EU financial support for Ukraine for several years. It was also among the closest European allies of Israel, with Prime Minister Benjamin Netanyahu endorsing Orbán during the campaign.

🇩🇪🇳🇴 Two days after the elections, both Germany and Norway separately announced an intensification of military cooperation with Ukraine, including the transfer of additional F‑16 fighter jets, long‑range weapons, drones, ammunition, and enhanced intelligence sharing.

🇬🇧 The following day, the United Kingdom approved an unprecedented military package, supplying 120,000 drones of various types to Ukraine, largely produced by British companies.

🇮🇱 At the same time, EU diplomatic sources report a shift in the Union’s stance towards Israel. The removal of the Hungarian veto has enabled the EU to adopt sanctions targeting Israeli settlers in the occupied Palestinian territories.

🫵 On 27 May, the Hungarian parliament overturned Orbán’s previous decision to withdraw from the International Criminal Court, which had issued an arrest warrant for Netanyahu in 2024.

The Orbán government has been a strenuous defender of Russian and Israeli interests in the European Union, as both Putin and Netanyahu have clashed with the bloc’s self-declared commitment to uphold international law. Most notably, Orbán allowed Netanyahu to visit Hungary despite the ICC arrest warrant against him, even though all EU member states are parties to the Court. His defeat has immediately prompted a shift in the European posture, with a flood of new bilateral aid to Ukraine to exploit the political advantage. The fall of Orbán has also allowed the EU to implement sanctions against Israeli settlers in the occupied Palestinian territories, marking a further step in the widening rupture between the European Union and Israel. The centre of gravity of the European far right may now shift to Western Europe, where AfD in Germany and Rassemblement National in France are currently leading in national polling. The episode also shows how the global position of the European Union can depend on the domestic politics of a single member state, as a change of government in Budapest has suddenly reshaped policy towards Kyiv, Moscow and Tel Aviv.

📌 Two days after the Hungarian elections, Ukraine and Norway announced a military cooperation agreement for the joint production of drones in Norway.
https://www.reuters.com/world/europe/ukraine-produce-drones-norway-oslo-says-2026-04-14/

📌 On 14 April, Ukraine and Germany signed an agreement on air defence to supply long-range weapons, drones and ammunition, and to strengthen intelligence links through the sharing of military data. In May, a plan for the joint production of drones was confirmed, as well as the delivery of IRIS-T air defence systems.
👉 https://www.reuters.com/world/germanys-merz-hosts-ukraines-zelenskiy-talks-berlin-2026-04-14/
👉 https://kyivindependent.com/german-defense-minister-visits-kyiv-to-discuss-arms-production/
👉 https://kyivindependent.com/germany-sends-new-iris-t-system-to-ukraine-as-kyiv-braces-for-next-russian-mass-attack/

📌 The transfer of 120,000 military drones to Ukraine as announced by the British government
https://www.gov.uk/government/news/uk-announces-biggest-ever-drone-package-for-ukraine-to-push-back-putin

📌 Rising tensions with Israel in European diplomatic circles, which internal sources link to Orban’s defeat in Hungary
https://www.politico.eu/article/viktor-orban-exit-leaves-israel-exposed-europe/

📌 European sanctions against Israeli settlers in the West Bank
https://www.aljazeera.com/news/2026/5/28/eu-imposes-sanctions-on-extremist-israeli-settlers-in-occupied-west-bank

📌 The shift in European foreign policy towards Israel has recently led to threats to impose sanctions on members of the Israeli government, including the current Minister of National Security, Itamar Ben-Gvir.
https://www.euractiv.com/news/eu-leaders-to-step-up-pressure-on-israel-with-new-sanctions-threat/

📌 The Hungarian parliament’s vote overturning the previous government led by Viktor Orbán’s decision not to recognise the authority of the International Criminal Court.
https://www.theguardian.com/world/2026/may/27/hungary-mps-vote-remain-member-icc-overturn-decision-viktor-orban-peter-magyar

🇺🇦 Ukraine has signed three agreements with Saudi Arabia, Qatar and the United Arab Emirates, focused on cooperation in defence capabilities and drone systems.

🚀 While the details remain confidential, Ukraine is expected to provide low‑cost air‑defence interceptors to counter Iranian‑designed Shahed attack drones, along with training and software support for their deployment.

💸 Ukraine has developed extensive experience in countering Shahed drones, which have also been used by Russia in upgraded variants known as Geran. Depending on the version and source, these drones are estimated to cost between $30,000 and $100,000, whereas Ukrainian interceptors are reported to cost around $10,000.

⚖️ According to Phenomenal World’s analysis, Iranian Shahed drones, being less sophisticated than the Russian version, would in fact cost considerably less – as little as $4,000. Ukrainian interceptors, however, remain far cheaper and more scalable than American missile production.

⚖️ Gulf countries have struggled to respond to Iranian drone attacks, relying solely on US-supplied air‑defence systems, whose highly advanced missiles cost millions per unit and are available only in limited numbers.

The dazzling development of cheap autonomous weapons is quickly increasing Ukraine’s relevance on the global stage. Signing agreements to access Ukrainian drone technology, Gulf countries are looking for ways to overcome the shortcomings of the US defence umbrella, which was not able to stop Iranian attacks on energy and defence infrastructures. This weakens the US position both in the Middle East and vis-á-vis Ukraine, which cannot be forced now to accept an unfavourable ceasefire. The emergence of low-cost drones in several conflicts worldwide is putting Ukraine at the centre for any country in need to propel its air defence, which does not want or cannot rely solely on expensive US technology. The agreements may provide Ukraine with additional funding sources for its military programmes, thereby strengthening its production capacity in the conflict with Russia. The UAE’s agreement with Ukraine might weaken its tactical alignment with Russia in various African regions.

📌 The agreement signed by Ukraine with the three Gulf countries, described by Zelensky as “major security agreements”
https://english.alarabiya.net/News/middle-east/2026/04/23/zelenskyy-says-ukraine-has-signed-drone-deals-with-gulf-states

📌 The agreement with the United Arab Emirates
https://english.alarabiya.net/News/gulf/2026/03/28/uae-ukraine-to-cooperate-on-defense-zelenskyy-says-after-abu-dhabi-meeting

📌 The agreement with Qatar
https://english.alarabiya.net/News/middle-east/2026/03/28/qatar-ukraine-sign-deal-on-countering-missiles-drones

📌 The agreement with Saudi Arabia
https://english.alarabiya.net/News/saudi-arabia/2026/03/27/ukraine-saudi-arabia-sign-deal-on-defense-cooperation-zelenskyy-says-

📌 The cost of the Shahed drones reported by the US think tank CSIS
https://www.csis.org/analysis/calculating-cost-effectiveness-russias-drone-strikes

📌 The analysis by Phenomenal World
https://www.phenomenalworld.org/analysis/cost-of-a-shahed/

🇪🇺🇺🇦 The Council of the European Union has approved a €90 billion loan to Ukraine, which had previously been delayed by a Hungarian veto. The decision followed the electoral defeat of Viktor Orbán, allowing the process to move forward. The funding will support Ukraine’s state budget and defence industry over the period 2026–27.

💰 Of the total, €30 billion is allocated to budgetary support, while the remaining €60 billion is directed towards investment in Ukraine’s defence industry.

🚁 The financing is expected to enable Ukraine to fully utilise its substantial domestic military production capacity, particularly in areas such as drones and autonomous systems, which have so far been constrained by limited funding.

👨‍⚖️ The loan is conditional on governance reforms, including adherence to the rule of law and progress in anti‑corruption efforts. The temporary suspension of EU funding in summer 2025, following attempts by the Ukrainian government to weaken anti‑corruption agencies, is seen as evidence of the effectiveness of these conditions.

🤝 Alongside the EU support, Ukraine has also signed several bilateral defence agreements with Gulf countries (including Saudi Arabia, Qatar, and the United Arab Emirates) and individual European states, further strengthening its financial and military position.

A major consequence of Orbán’s electoral defeat is the fracturing of the main bloc of internal EU opposition to support for Ukraine. The change of government in Budapest will make it harder to weaponise the complex patchwork of European bureaucracy to extract concessions in exchange for approving measures backed by the rest of the bloc. In doing so, it reduces Russia’s influence over European decision-making. The approval of the €90bn funding package, which had been stalling for months, gives Ukraine’s budget breathing room and allows Kyiv to further increase investment in drone technology. Ukraine has already gained a significant tactical advantage in its campaign of medium-range attacks on Russian logistics, and further acceleration could trigger a tipping point in the war in Ukraine’s favour.

📌 The EU announcement:
https://www.eeas.europa.eu/delegations/ukraine/council-finalises-%E2%82%AC90-billion-support-loan-ukraine_en

📌 In Critical Point #33, titled The Infrastructure of Paralysis, we discussed the previous Hungarian veto:
https://ph4seshift.substack.com/p/the-rights-infrastructure-of-power

📌 The regulation for the implementation of the loan:
https://eur-lex.europa.eu/eli/reg/2026/467/oj

📌 Zelensky personally addressed the issue of underfunding of the Ukrainian defence industry, noting that actual production capacity depends on the amount of funding received:
https://www.ukrinform.net/rubric-ato/4044494-zelensky-ukraine-has-capacity-to-produce-35b-worth-of-drones-missiles-in-2026.html

📌 Alongside European funding, a number of bilateral agreements have been signed in the Gulf:
https://english.alarabiya.net/News/middle-east/2026/04/23/zelenskyy-says-ukraine-has-signed-drone-deals-with-gulf-states

📌 In the summer of 2025, the Ukrainian government launched an investigation to dismantle anti-corruption agencies, based on alleged accusations of collaboration with Russia. The EU immediately suspended the disbursement of funds, demonstrating that conditions relating to the rule of law and the fight against corruption are a serious constraint:
https://www.kyivpost.com/post/57180

📌 This loan is expected to boost Ukraine’s defence industry, especially in the sector of autonomous systems such as drones and unmanned ground vehicles. We talked about this specific industry and its implications in a recent Critical Point:

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