World

Hungary’s revenge: Orban is sacrificing EU unity for Russian gas

24 July 2022

4:30 PM

24 July 2022

4:30 PM

Russian foreign minister Sergei Lavrov spoke magnanimously while receiving his Hungarian counterpart Péter Szijjártó in Moscow this week. He promised that the Kremlin would ‘consider’ Hungary’s request for significantly increased gas deliveries, after Viktor Orbán’s right-hand man said his country won’t manage without more Russian resources as Europe faces a deep-freeze this winter.

It’s hard to imagine a more humiliating scenario for the EU: a member state supplicating Vladimir Putin’s regime to keep its people warm after years in which the bloc laughed off criticisms about its energy dependency on Moscow. The meeting was a dream for Russia: one of the surest signs yet that European unity on Ukraine is crumbling in the face of economic pressure, and an early hint of diplomatic normalisation with the West as the Ukraine war continues in the Donbas.

With grim inevitability, EU sanctions faltered over Russian gas. The bloc’s Herculean exertions in May only led to half-baked sanctions on Russian oil – which exempted pipeline deliveries. Since then there have been serious concerns that Putin will turn off the gas taps, leaving countries like Germany in the cold, as European governments warn citizens that they will have to bear the brunt of the crisis by doing all they can to reduce their energy usage.

In this context, Hungary’s willingness to take the first steps towards normalising relations with Russia has come across to many as a craven betrayal. As well as increased gas supplies, Szijjártó has pushed for accelerated construction of two nuclear reactors in Hungary, which are being built by the Russian state company Rosatom.


But it can also be argued that Budapest is simply being honest where others aren’t. Germany is doing its utmost to get more gas flowing from Russia through the Nord Stream 1 pipeline, despite Chancellor Olaf Scholz’s previous claims that ‘partnership with Putin’s aggressive, imperialist Russia is inconceivable.’ Hungary has been opposed to sanctions since the war broke out, based partly on its certainty that Europe’s energy dependency on Russia would make this kind of hypocrisy unavoidable, with Orbán last week claiming the EU ‘shot itself in the lungs’ by trying to cut itself off from Moscow.

As it gasps for air, the EU is responding to the crisis the only way it knows how – by trying to centralise more power in Brussels. On Wednesday, Ursula von der Leyen proposed emergency legislation which would allow the European Commission to enforce energy rationing across the bloc with majority approval from member states, bypassing countries’ usual veto powers.

The proposal badly misjudged the mood. As they scramble to store gas for the winter, governments are concerned with securing more control over their energy supplies, not with ceding additional powers to Brussels. It didn’t take long for the proposal to be shot down by a group of member states, and it now seems dead in the water.

But again, Hungary is an outlier. Budapest hasn’t just rejected the EU’s proposed new energy controls: it has gone a step further by introducing a ban on gas exports starting from next month. For Orbán, the answer to the energy crisis is more nationalism, not less – resisting the urge to conform with an EU which he believes is hell-bent on self-harm, and preserving Hungary’s ability to direct its own energy policy.

His attitude isn’t much help to Ukraine. But criticisms of Hungary’s stance should take into account the brewing economic crisis in the country, and the lack of EU pragmatism which may have pushed Budapest further into Putin’s embrace.

The country’s economic outlook is particularly troubling, with critics suggesting that ‘Orbánomics’ is failing. Utility price controls shielding consumers from energy inflation – a flagship policy of the Fidesz government – have become unsustainable and were amended on Thursday. The Hungarian forint has fallen to record lows against the euro, while protests have erupted in Budapest against plans to abolish tax breaks for entrepreneurs. Inflation stands at 12.6 per cent – not as bad as other countries in the region, but still worryingly high, with a further shock in store as the caps on utility prices are shed.

Orbán promised to protect Hungarians from the effects of the war during elections in April, so these gathering economic storm clouds leave him vulnerable. They might even have made him malleable in his bitter stand-off with Brussels over ‘rule of law’ concerns in Hungary. But instead of extending an olive branch, the EU has pushed Hungary further away since the war in Ukraine began, triggering new powers to cut funding while continuing to withhold pandemic recovery money earmarked for the country.

Egged on by Orbán’s opponents in Brussels and Budapest, who express fury at the merest hint of a rapprochement to unlock funds, the EU continues to give Hungary the cold shoulder even as the country falls into deep economic trouble. This may be a dangerous missed opportunity, because faced with a lack of sympathy from the West, Orbán clearly feels little compunction in turning to his friends in the East for help through the difficult times ahead.
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