A deepening espionage scandal has plunged Hungary and Ukraine into a new diplomatic rift, with Budapest abruptly suspending planned talks on the rights of ethnic Hungarians in Ukraine’s Transcarpathia region.

According to Ukrainian officials, negotiations that were due to take place on May 12 in Uzhhorod were called off at the last minute by Hungary, despite the Ukrainian delegation already having arrived in the border town. The discussions were meant to address 11 Hungarian recommendations to strengthen the rights of the Hungarian minority living in the southwestern Carpathian region.

The suspension comes amid a growing diplomatic row sparked by Ukrainian allegations of Hungarian espionage. On May 9, Ukraine’s Security Service (SBU) announced that it had uncovered a Hungarian military intelligence network operating on Ukrainian territory. Two former Ukrainian soldiers were detained, accused of collecting sensitive military information for Budapest. The network was reportedly overseen by a Hungarian intelligence officer.

In response, Ukraine expelled two Hungarian diplomats. Hungary retaliated in kind, expelling two Ukrainian officials. Hungarian Foreign Minister Péter Szijjártó dismissed the allegations as “propaganda,” stating that Hungary had not received any formal communication from Kyiv regarding the charges.

Tensions escalated further on Friday when Hungary’s Counter-Terrorism Centre detained a Ukrainian citizen in central Budapest. According to Hungarian authorities, the individual—described as a middle-aged man previously operating under diplomatic cover—was expelled from the country overnight for espionage. The National Directorate General for Aliens determined that his activities posed a “serious threat to Hungary’s sovereignty.”

“The individual was deported after the situation was clarified,” the Hungarian government said in a statement, adding that the suspect no longer had diplomatic immunity.

The deteriorating relations have cast a shadow over longstanding concerns about minority rights in Transcarpathia, where ethnic Hungarians have lived for generations. Hungary has frequently criticized Ukraine for failing to uphold linguistic and cultural rights, while Kyiv has accused Budapest of interfering in its internal affairs.

With both sides now trading expulsions and suspending dialogue, the prospects for resolving the minority rights dispute — or cooling tensions more broadly — appear increasingly uncertain.

The incident marks the latest flashpoint in what has been a historically uneasy relationship between the two neighbours, now further complicated by war, security fears, and mounting geopolitical pressure.

In a move that could reshape the country’s economic future, Bulgarian President Rumen Radev announced he would submit a request to parliament for a referendum on whether the country should adopt the euro as its official currency.

“Bulgaria, as a full member of the European Union, faces a strategic decision — the introduction of the single European currency,” Radev said in a national address. “The referendum will be a test of the National Assembly’s democracy and will show who is following democratic principles and who is denying Bulgarians the right to determine their future.”

The push to adopt the euro comes amid years of political turmoil and economic challenges for Bulgaria, which has been part of the European Union since 2007. The decision to pursue eurozone membership has not been without its hurdles. In 2024, the European Central Bank (ECB) rejected Bulgaria’s bid to join the currency union, citing high inflation as a major obstacle.

In February 2025, the debate reached a boiling point when police in Sofia clashed with nationalist protesters who opposed the government’s plans. About 1,000 demonstrators gathered in front of the European Commission’s Sofia office, throwing red paint and firecrackers at the building, which resulted in a door being set on fire.

While the new government, formed just last month, has made joining the eurozone a priority, not everyone is convinced that Bulgaria is ready for the economic shift. Some economists argue that the country does not yet meet the necessary economic conditions for euro adoption, citing issues such as inflation and fiscal stability.

However, the Bulgarian government, with the backing of pro-European parties in parliament, maintains that adopting the euro is crucial for deeper European integration. As geopolitical tensions rise in Europe, they argue that adopting the euro would help secure Bulgaria’s place within the European project.

At the same time, nationalist factions, particularly those with pro-Russia sympathies, have ramped up opposition to the eurozone bid. These groups are reportedly spreading disinformation in an effort to sway public opinion and create fear around the potential impacts of euro adoption.

As Bulgaria moves toward the referendum, the country finds itself at a crossroads. The decision to adopt the euro will not only affect the economy but could also reshape the nation’s political and diplomatic future within the EU.

The outcome of the referendum remains uncertain, with significant divisions within the country about the advantages and risks of joining the eurozone.