European Union countries reached a tentative agreement to clear the way for Ukraine to receive aid from the bloc after Hungary withdrew its opposition.

In return, member states reduced the amount of money for Hungary, which they had blocked because of corruption problems. The forint rose against the euro, Bloomberg reports.

Hungary vetoed an 18 billion euro support package for Ukraine. As part of a deal struck between EU ambassadors, Hungary overrode the veto.

EU countries agreed to approve Hungary's post-pandemic recovery plan, which entitles Budapest to €5.8 billion in grants.

The envoys also agreed to suspend the €6.3 billion in EU budget funds allocated to Hungary because of ongoing corruption problems, down from the €7.5 billion previously recommended by the European Commission.

However, it is important to note that Hungary will not be able to use the funds to rebuild after Covid until it meets a number of conditions prescribed by the EU executive to strengthen the rule of law and reduce corruption. The Hungarian government said Tuesday that won't happen until the second quarter of 2023.

The forint jumped 1.5 percent to trade at 410.72 per euro in early trading Tuesday, outpacing emerging market gains. It was still much weaker than a month earlier, when optimism that Hungary could quickly access EU funds led to the currency briefly strengthening below 400 per euro.

The forint has fallen more than 10 percent against the euro this year, the third worst performer among emerging market currencies after the Argentine peso and Turkish lira, largely because of uncertainty over accessing EU funds.

This is an important milestone, Hungarian Finance Minister Tibor Navracsics told reporters Tuesday. What's happening now is an acknowledgement of the work in negotiating the funds, he said.

The EU was in a hurry to get a deal done, and Ukraine was in dire need of EU funding. Many decisions in the EU require the support of all 27 member states, and Hungary has shown a willingness to use its veto power to try to influence unrelated political issues.

As part of a broader deal, EU ambassadors also agreed to impose an EU-level global minimum tax on large multinationals after Hungary dropped its objection. The Eastern European country would be allowed to include a local business tax in the calculation of the effective corporate tax level, saving Hungary from having to raise it to meet global requirements if and when it comes into effect.