In Budapest there is the usual Friday political turmoil since it’s the day that Viktor Orbán holds a well-rehearsed conversation with a journalist of the Hungarian state radio. I no longer call Magyar Televízió and Magyar Rádió public television and radio stations since in the last four years both have become mouthpieces of the government. Just like in the Kádár regime.
Normally the world does not pay much attention to these early morning chats, but today was different. By 04:45 EST Reuters reported on what Viktor Orbán had to say about the European Union’s sanctions against Russia. After the leaders of the Union decided on tough economic sanctions against Russia, Orbán publicly voiced his opposition to the plan. Referring to the Russian ban on agricultural products coming from the European Union, Canada, the United States, and Australia, he announced that the sanctions policy pursued by the West “causes more harm to us than to Russia…. In politics, this is called shooting oneself in the foot.” He continued: “I will do my utmost–of course we are all aware of Hungary’s weight, so the possibilities are clear–but I am looking for partners to change the EU’s sanctions policy.”
This move of Orbán may not have come at the best time. Just yesterday political observers noticed that Putin adopted a softer tone during a visit to the Crimea that was not carried live on Russian television. Moreover, the sanctions have just begun to bite, but even before there were signs of financial strain as a result of the annexation of the Crimea. Desperate for cash, the Russian government dipped into the national pension fund which means taking away from every Russian two years’ worth of social security payments. Although Putin’s personal popularity is extraordinarily high, according to one survey only 7-12% of the population are ready to make financial sacrifices for the sake of Russia’s policies in Ukraine.
Inflation is up 9% this year while there is no economic growth. The government is contemplating a new 3% sales tax to plug some holes in the federal budget. There are already shortages in the supermarkets. Forty percent of Russia’s food supply comes from abroad, and Russian consumers will be unhappy very soon. In the last twenty years or so they became accustomed to a great variety of products from all over the world and they have no intention of returning to Soviet times of limited supplies and inferior quality. Putin’s propaganda that the ban on Western food is just a means of “supporting the product manufacturers of the fatherland” will wear thin soon enough.
The temporary loss of the Russian market for Hungarian agriculture is less significant than the Hungarian government wants the world to believe. Orbán put in a bid for compensation and therefore, I assume, he exaggerates the potential losses for Hungarian farmers. Reuters in its report claims that Russia is Hungary’s largest trading partner outside the European Union, with exports worth 2.55 billion euros in 2013. However, this figure may be wrong. According to a Hungarian source, that figure is 70 billion forints, which is only 223 million euros at today’s exchange rate. So, the Russian sanctions against Hungary will not be as painful as Orbán would like to portray them. On the other hand, Western sanctions against Russia are more serious from Hungary’s point of view than the Russian sanctions against Hungary, Zsolt Kerner claims. One of the Russian banks affected by the sanctions is the state-owned Vnesneconombank (Bank for Development and Foreign Economic Affairs), which owns part of Dunaferr and is also the bank through which the Russian loan to build a new nuclear power plant in Paks will be administered.
Orbán’s attack on the Russian policy of the European Union is also ill-timed. Finland’s president, Sauli Niinistö, is currently in Moscow to negotiate with Putin. Although Niinistö is not an official envoy of the European Union, he was in contact with western colleagues. The European Union has been seeking a diplomatic solution to the crisis, and they don’t need Viktor Orbán’s good offices as a messenger between Moscow and Brussels.
While Niinistö was negotiating with Putin in Moscow, the EU foreign ministers held an emergency meeting in Brussels, discussing among other things the Ukrainian situation. Of course, I have no idea what position Tibor Navracsics took at this meeting, but I assume he was instructed to oppose sanctions and perhaps suggest bilateral discussions with Moscow. Whatever the Hungarian position was, according to the agreed-upon statement “any unilateral military actions on the part of the Russian Federation in Ukraine under any pretext, including humanitarian, will be considered by the European Union as a blatant violation of international law.” And, most importantly, “the Council … remains ready to consider further steps, in light of the evolution of the situation on the ground.” According to diplomats, the new measures would target Russian sales of sovereign debt, its ability to raise funding through syndicated bank loans, and high-tech machine imports.
I may add here that Viktor Orbán’s old friend David Cameron, with whom he saw eye to eye on the nomination of Jean-Claude Juncker to be president of the European Commission, is unlikely to be on his side on the issue of EU sanctions against Russia. Great Britain is one of the harshest critics of Russia’s destabilizing efforts in the region.
By now Orbán has one staunch ally and that is Robert Fico, the prime minister of Slovakia who announced his opposition to sanctions already yesterday. However, it seems that the Slovak leadership is divided. Andrej Kiska, who recently defeated Fico to become Slovakia’s president, came down on the side of sanctions. He said that “when words aren’t enough, economic sanctions can be used to bear greater pressure on countries which seek to expand, dictate or threaten.”
Orbán’s comment that the sanctions policy hurts the European Union more than it does Russia and that EU policy is in fact a move by which the EU shoots itself in the foot was not left unanswered. Lithuania’s foreign minister, Linas Linkevicius, upon arriving for the EU foreign ministers meeting in Brussels, retorted that it was better to shoot oneself in the foot than to let oneself be shot in the head. Naturally, Lithuania politicians are a great deal more worried about Russian intentions than is Orbán, who looks upon his country as a kind of bridge between Moscow and Brussels.
Estonia, which is in the same boat as Lithuania and Latvia, has lately changed its until now pro-Hungarian attitude. One reason for that change is Orbán’s overly cozy relations with Putin’s Russia. But there is another. While Hungary just opened a new embassy in Ecuador’s Quito, it unceremoniously closed its embassy in Tallinn, the capital of Estonia. Estonia is not only a fellow EU member, but Estonians speak a Finno-Ugric language. This linguistic connection has always been the source of a special bond between Estonia and Hungary, just as in the case of Finland. The Estonians not surprisingly took offense and closed their own embassy in Budapest.
And now the largest and most prestigious Estonian newspaper, Postimees, published an editorial with the title: “A delicate European problem called Viktor Orbán.” Here is a pull quote from the English-language editorial: “A headache indeed – the increasingly autocracy-minded statements and the ever tightening cooperation with Putin’s Russia by Hungarian Prime Minister Viktor Orbán. The issue being: how united is Europe in its values, firstly, and secondly in bridling the warlike neighbouring Kremlin. Obviously, the latter is searching for weak links in Europe. Alas, the still economically troubled Hungary and its populist-type anti-Brussels PM provide for one.”
Orbán’s fame is spreading, but it’s not exactly the kind that Hungarians can be proud of.