23 Aug, 2022 09:18
Kirill Teremetsky: Hungary is not Russia’s ally, but it’s a rare rational partner in an increasingly fanatical EU
Budapest has managed to place its own national interests over those promoted by the Eurocrat elites
We are witnessing a clash between Eastern European Realpolitik, the followers of which still remember Hans Morgenthau’s precepts about the primacy of the national interest, and the broader Western ideology and politics of high hopes and illusions. In this, mutually beneficial bilateral ties are sacrificed in favor of political agendas.
On August 21, Hungarian oil and gas giant MOL and Slovakia’s Slovnaft paid for Russian oil transit through Ukraine. Kiev’s UkrTransNafta did not accept payment from Moscow’s Gazprombank allegedly because of sanctions. The stopping of transit through the Druzhba pipeline was another step to pressure Russia, which could not have taken place without the approval of their Western partners.
But why is Hungary itself willing to look for ways to pay for Russian energy resources in an emergency and go against the EU’s sanctions policy? And why did Hungarian Foreign Minister Peter Szijjarto go to Moscow at the end of July for talks with his Russian counterpart, Sergey Lavrov, about additional gas supplies?
Despite the cooling of Hungarian-Ukrainian relations after 2014 and the lack of official support from Budapest for the Kiev authorities, Hungarian oil and gas company MOL has transferred €300,000 and sent special equipment worth €50,000 to keep the Ukrainian gas transmission system functioning during the Russian military operation.
Hungary is concerned about the continuity of energy supplies from Ukraine, as it is 60% dependent on Russian oil (with another 16% coming from Kazakhstan, which also uses the Druzhba pipeline) and 85% on Russian gas. Thanks to stable and pragmatic bilateral relations between Russia and Budapest, long-term contracts have been concluded,allowing the country to buy energy resources at a price five times lower than the broader European market.
The $10 billion project signed in 2014 between Rosatom and Hungary’s MVM to build two units of the Paks Nuclear Power Plant, which despite the political environment has been successfully implemented, allows Hungary to remain an attractive country for big business and foreign investment, thanks to its cheap electricity.
All this helps Viktor Orban’s ruling Fidesz-CDPP coalition to make and keep promises to voters in the form of relatively low petrol and gas prices and lower electricity tariffs. They are also able to use pre-election populist measures such as thirteenth salaries and extra social payments, and influence public opinion through the media (MOL and energy company MVM Group are sponsors of Hungarian government publications) and student institutions.
MOL will pay its shareholders a dividend of $652 million this year. One of the beneficiaries and shareholders (30.5%) are nominally non-governmental foundations that fund educational institutions such as Corvinus University and Mathias Corvinus Collegium. This helps the ruling party influence the formation of the ‘right’ view among students on political processes taking place in Hungary.
At the same time, Budapest is diversifying its energy sector and trying to gradually reduce its dependence on Russian raw materials. Budapest buys LNG from Croatia, participates in gas projects in the UAE and Oman, and has a strategic partnership agreement with ExxonMobil (although a pipeline project from Romania proved unsuccessful). Hungarian operator FGSZ and Serbia’s Srbijagas completed an interconnector at the border between the countries for supplies through Turkish Stream on July 5, 2021, so the Hungarian government will buy natural gas from Azerbaijan from 2023. Hungary imports oil from Iraq and Iran, and cooperates in this sector with Kuwait and Bahrain, while developing its own fields (in the Baranja region).
Budapest’s stance really irritates the European Commission, which has already accused the Hungarian authorities and Orban personally of undermining the bloc’s unity during the refugee crisis. Eurocrats have criticized the country for high levels of corruption and shutting down ‘free’ media, while repeatedly threatening to cut funding from the EU’s stabilization fund. In addition, Budapest does not support the bloc’s desire to arm Ukraine and does not allow the supply of military equipment through its territory to Transcarpathia.
https://www.rt.com/russia/561303-hungary-russia-eurocrat-elites/
(EU doubles down on stupid, Budapest will be the Capitol of the EU when this over)