International pressure on Viktor Orbán: Russia, Putin, and Gazprom

There is real concern among former Hungarian diplomats and foreign policy experts that Hungary’s isolation is practically complete and that she may remain the only “strategic ally,” to use Viktor Orbán’s favorite term even in connection with China, of Vladimir Putin’s Russia. And if the Orbán government does not try to extricate itself from this situation, the consequences can be serious. Although Fidesz supporters are convinced that the United States has embarked on the destabilization of the country with the goal of removing Viktor Orbán from power, this cannot be Washington’s intent. After all, the opposition is in disarray and replacing Orbán with another Fidesz politician would not accomplish anything. A new prime minister would be merely a figurehead; the real power would remain in the hands of Viktor Orbán.

Admittedly, on the surface this conspiracy theory finds some support in the coincidence of the American move to ban six corrupt officials and businessmen from the United States and the massive demonstrations against the internet tax that soon enough became a protest movement against the whole regime. But the latter wasn’t the U.S.’s doing. It was the folly of the Hungarian government that seems to commit more and more mistakes lately. Did Viktor Orbán lose his magic touch, or has he navigated himself into an impossible situation in which the “peacock dance” is no longer possible? He is increasingly being faced with a stark choice: either total commitment to the side of Russia or capitulation and acceptance of the rules of the game within NATO and the European Union.

Orbán might be a good politician–if we define a good politician as someone who can play one person against another, who can fool his allies, who disregards the law, and who within a few years manages to institute a one-party system, because that is what we have in Hungary. But his track record shows that he cannot govern, that he cannot run a country successfully. We who watched his first four years between 1998 and 2002 with growing concern knew that already, but it seems that in the eight years that followed his disastrous rule the Hungarian people forgot why they went out in record numbers to make sure that this man and his regime don’t come back.

The situation today is ten times worse than it was during his first administration. He has transformed the country into an illiberal democracy, and his pro-Russian policies have alienated Hungary’s allies. Viktor Orbán is considered to be a pariah and someone who is toxic because of his potential influence on some of the other countries in the region. Western politicians look upon him as a fellow traveler of Vladimir Putin. And, indeed, they seem to borrow each other’s ideas. Orbán copies Putin’s attacks on NGOs, while, it seems, Putin was inspired by Orbán’s nationalization of the textbook industry, reported just yesterday in the western press.

During his first administration Orbán was fiercely anti-Russian, and it seems that he didn’t change his mind on that score until lately. In December 2009 a Hungarian foreign policy expert and obvious admirer of Orbán described the forthcoming Fidesz victory as “Moscow’s nightmare.” Early in his second administration he worked furiously on a quasi-alliance system from the Baltic to the Adriatic in which Hungary would have a leading position. But his fellow prime ministers in the region wanted nothing to do with Orbán’s grandiose plan. He made every effort to dislodge Surgut, a Russian company that had a 21.2% stake in MOL, the Hungarian oil and gas company. By May 2011, after lengthy negotiations, the Hungarian government bought out Surgut, paying a very high price. At that time Hungary was no friend of Russia. Not yet. However, according to Fidesz sources, Orbán decided to radically change course sometime in early 2013.  He spent about six months pondering the issue and came to the conclusion sometime during the summer of 2013 that he would turn to Russia for an expansion of the Paks nuclear power plant. According to the same sources, his decision was based on his belief that the Czech Republic and Germany would need cheap energy which Hungary would be able to provide.

Since then, with the outbreak of the Russian-Ukrainian conflict, the political climate in Europe has changed dramatically. Orbán’s flirtation with Russia is looked upon with more than suspicion. The West considers Viktor Orbán and Hungary a liability. Soon enough, I believe, he will have to show his true colors. No more peacock dance. But it seems that Orbán by now is embroiled in all sorts of machinations with Russia in general and Gazprom in particular. The current setting for Hungarian machinations with Gazprom is Croatia.

Just a few words by way of background. In 2008-2009 MOL acquired a 47.47% stake in INA, the Croatian oil and gas company. In 2011 a Croatian newspaper reported that Zsolt Hernádi, CEO of MOL, had been accused by the Croatian prosecutor’s office of bribery. Naturally, the Hungarian prosecutor’s office found nothing wrong, but the Croats eventually went so far as to hand the case over to Interpol. As a result, Hernádi couldn’t leave the country; otherwise he would have been subject to immediate arrest. More details can be found in a post I wrote on the subject in October 2013. The decision was eventually made to get rid of MOL’s share in INA, but the Croatian government does not have the kind of money needed to buy MOL’s stake. Lately, there has been talk in the Hungarian press that MOL will sell its shares to a Russian buyer, most likely Gazprom itself. So, Gazprom will not only store gas in Hungary but might even control almost half of INA in Croatia.

INA: Managed by MOL

INA: Managed by MOL

And now let’s return to American-Hungarian relations. According to some observers, “the highly unusual step of blacklisting six people with ties to the government in Hungary, a NATO ally and European Union member,” also has something to do with the “growing closeness between Hungary and the Kremlin over energy that could undermine Western attempts to isolate Russian leader Vladimir Putin over his intervention in Ukraine.” So far there is not much new in that assertion, published in an article by Reuters. We have known all along that, in addition to Orbán’s domestic policies, his relations with Russia were a serious concern to the United States and the European Union. What is new in this revelation is that Washington is apparently keeping an eye on the possible MOL-INA deal with Gazprom. According to the article, Chris Murphy, U.S. senator from Connecticut, was dispatched to Zagreb “to lobby the government … on the issue.” Another interesting piece of information gleaned from the article is that State Department official Amos J. Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs, met Hungarian Foreign Minister Péter Szijjártó and had a “productive meeting during Szijjártó’s recent visit to Washington about MOL’s stake, the South Stream, and Hungarian gas deliveries to Ukraine.”

All in all, it seems to me that Viktor Orbán is in over his head, especially with a foreign minister with no diplomatic experience. Szijjártó was an excellent spokesman for Viktor Orbán as the head of the “parrot commando,” but he is not qualified to be foreign minister, especially at such a delicate juncture.

It is hard to tell what Orbán’s next step will be. Fidesz media attacks on the United States are fiercer than ever, and its admiration of Russia is frightening. But more about that tomorrow.

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50 comments

  1. Does anyone know about any Socialist politician who was trained by the KGB for 5 months? I heard from a friend that MSZP nominated such a person for an upcoming election but it is a very fantastical claim.

    I even thought are no elections any more are there? I quickly switched the topic but would appreciate some info about any KGB agents in the Socialist party especially as they are likely become the governing force in Hungary after 2018.

  2. @fafarago, I just started reading an article about him. His name is Imre Horváth. DK and Együtt-PM don’t support him. That’s all I know for the time being.

  3. The current share price and exchange rate evaluate MOL’s 49.08% stake in INA at €2.448 billion, virtually unchanged (down 0.5%) since October 2013.

  4. My understanding is that he participated in a course in the Soviet Union as a border guard officer in 1984. Border guard units were under the Ministry of Interior.

    MSzP might manage to lose this relatively safe district by fielding a candidate with a past that can be questioned.

  5. Market capitalization of MOL = € 4 billion ( €3.993)
    Market capitalization of INA = € 5 billion ( €4.987)

    Stake of the Hungarian state in MOL is 24.7%. It is currently worth € 0.986 billion

    Therefore the indirect stake of the Hungarian state in INA is worth € 0.605 billion

  6. Thank you Éva for your excellent articles, I read every one of the and daily. I also enjoyed the video interview on vim, which was made recently by a friend of mine’ son.
    I generally agree with your opinions also, and I have a great respect for the excellent and accurate, timely information you are able to gather and put in front of us, readers.
    I would like to add my humble opinion to the subject on the “Stadionbuilder viktor”, the new MINI-Mussolini of Europe, who begins to turn as a weathervane peacock from left to right and just now in the direction of the East, Russia, Kazakhstan, Belarus, etc..
    ======
    The US denial of entry of perhaps six people, (may be more soon), who are criminals on a large scale and employed or attached to the Government and/or the “Stadionbuilder viktor”.

    Hungarians concentrate on the non-entry of six people and most don’t know, that is private matter, no information about them will be provided by the US, BY LAW!. None required either. If a Prime minister and his Government does not know his top corruption organizers, appointed by them, that is enough of an indictment.
    The denial of entry is NOT the issue, however the Hungarian Government will never state the real issue, so the people, who are lazy to look it up on the Internet and read Presidential Proclamation 7750 still don’t understand anything.
    Presidential Proclamation 7750 clearly states, among other well known issues, that;
    “(c) Public officials or former public officials whose misappropriation of public funds or interference with the judicial, electoral, or other public processes has or had serious adverse effects on the national interests of the United States.”
    These are the most important issues – “misappropriation of public funds or interference with the judicial, electoral. or other public processes”.
    A country where the taxes are freely stolen by government officials and individuals, to put some of it in the ruling party’s coffers and grease the wheels of corruption, where elections and the and the judicial system rigged is NOT a Constitutional State and it is NOT a Democracy.
    These are the issues, nobody wants to mention in the Government media and most Hungarians are lacking detailed understanding of human rights and laws. Hungarians by en large are carefree, few if any ever read any of the previous Constitutions of Hungary and nobody read the new Tákolmányt or the Botchtitution (I just made the word up).
    Therefore the Stadionbuilder will soon be able to slush and flush the issue at home. Not having a good enough understanding and solid info on US politics for his region and not having any more diplomats in the Foreign Office which is now a Commerce Department too, where Hungary peddles himself for the highest bidder, as a prostitute, because they cannot afford to have principals. This will force the viktor to improvise and study books on the “History of U.S. Foreign Policy”, to translate his peacock dance to English. His bad luck is, that we don’t speak English, we speak American (English) and there are subtle differences, so his dance may be misinterpreted here.
    =====
    On the Internet tax: It will be implemented in a different name and form! I have no doubt.
    However, the benefit of democracies, that even when they work VERY SLOWLY, they tend to work and diplomats are not stupid people. They work behind the scenes, they recognize a card cheat as well as any of us, they just don’t do what the western movies shown and don’t shoot the cheater immediately. But they shoot him/her in due time.
    Therefore, I thing, that the caretaker for viktor is designated by the EU to be the most influential politician in Europe and perhaps the World, Angela Merkel. She has to keep the viktor on the leash from now on. Next year Mr. Junckers and his people will back her up too.
    Audi did not just stop for three weeks in August and sent his people on vacation in Györ, WITHOUT prior announcement, after which the GDP of Hungary took a nosedive of 5.6%. It is a subtle illustration how much of the Hungarian GDP is produced by German and multi-national companies.
    So
    According to other papers, it was a top manager of Deutsche Telecom, perhaps sent by Christopher Mattheisen, the CEO, to remind the half-wit victor of the Agreements his Government signed with them and give a hint, that enough is enough, D.T. and other German companies are ready to pull down the shutters a bit or if it pleases him the blinds. In Hungary, a similar darkness will soon follow, like the one, the viktor and his dirty hoodlums have inside their thieving, cheating, conniving heads.

  7. I apologize for the torrent of misspelling in the beginning of my comment. The spell checker changes some of the words and I failed to correct them Here is the beginning again;

    Thank you Éva for your excellent articles, I read every one of them and daily. I also enjoyed the video interview on Vimeo, which was made recently by a friend of mine’s son.
    I generally agree with your opinions also, and I have a great respect for the excellent, accurate, and timely information you are able to gather and put in front of us, readers.
    I would like to add my humble opinion to the subject on the “Stadionbuilder viktor”, the new MINI-Mussolini of Europe, who begins to turn as a weathervane peacock from left to right and just now in the direction of the East, Russia, Kazakhstan, Belarus, etc..

  8. It is possible that OV badly needs the money from selling INA. However Hungary’s economical state is not that bright as the government states, as we could learn from yesterdays forecast from GKI (Research Intitute of Economics).

  9. “Admittedly, on the surface this conspiracy theory finds some support in the coincidence of the American move to ban six corrupt officials and businessmen from the United States”

    Note, this must have been in the works for some time and note, it was announced *after* the elections. Accidential timing, I think not.

  10. People may hope that Orban’s Russia friendliness may be subject to change once he signed the all important long term gas supply agreement. (But that assumes the Russians are amateurs.)

    However, it’s like hoping Orban will change because “hey it’s only campaign time and during that period he says stupidities” but after he is elected, he will be reasonable.

    Right, he will be reasonable. Muhahaha.

  11. @tappanch: I hope you are aware of the fact that the “border guards” were a legitimate cover for secret service people, just like the police force. Their neighbors thought he was working for the border guards. Mr. Bakondi comes to mind, who was also at the border guards according to his official cv. Or maybe not full time. Obviously Fidesz loves to use these people, but they are in power, they can do anything. A party trying to change and resurrect itself would have to do it better. But there’s zero change at MSZP and apparently zero vetting for candidates (Fidesz using its internal security apparatus vetted these people more than their own party it seems, Fidesz truly cares and leaves nothing to chance). Whether or not this is the real KGB is irrelevant (and I would still say it is), it’s embarracing — for those minority which cares about the left wing. The end of MSZP is far, fortunately for Fidesz. The decline will only worsen.

  12. Unexplained deaths in the last year:

    1. Andras Komaromi, owner of EMIR, the software that kept tab on the EU tenders.
    This is now in Fidesz hands, or can Komaromi’s underage children lay claim to the software?

    2. Tamas Welsz, the key figure to refute the pre-election Fidesz charges against the vice president of the opposition party MSzP.

    3. Andras Varady, shepherd, who opposed Orban’s buddy and son-in-law in Alcsut.
    He died on the eve of the local election.

    Can anyone add to the list?

  13. The police claims that they were not at the Fidesz headquarters at the end of the first anti-internet tax rally, that is why they could not prevent the smashing of some of the windows.

    http://index.hu/belfold/2014/11/03/miert_nem_vedtek_a_rendorok_a_fidesz-szekhazat/

    As an eyewitness, I can say that this is a lie.
    As I wrote here on the day of the event, I saw a police van withdrawing without being attacked, as if by orders.

    There are signs that Fidesz wants to alter the law about demonstrations, restrict freedom of assembly citing this event.

  14. One more thing re the border guard. It was an integral part of the security state. It was at the border where Hungarian people were turned into informant after finding 20 dollar bills in their undies. I guess this must have happened with foreigners as well, the killer of the Bulgarian dissident Markov is suspected to be an Italian who was enlisted after he was found attempting smuggling to/fro Bulgaria. Most importantly the guard existed to guard Hungarians, preventing them from leaving Hungary. Our MSZP guy was an overachiever in this apparatus who was carefully selected to study in the USSR, where even to travel internally to another town of the same Soviet Republic one needed passport.

  15. “Orbán decided to radically change course sometime in early 2013. He spent about six months pondering the issue and came to the conclusion sometime during the summer of 2013 that he would turn to Russia for an expansion of the Paks nuclear power plant.”

    Eva – Orban was already talking about enlisting Russian help to renovate Paks in November 2009. He talked about it at length during a TV interview after he returned from a visit with Putin in Moscow. I remember this quite clearly because I had to translate the interview.

  16. Seal Driver: You are absolutely right. But so is our hostess. In November 2009 she made an articles about this. At that time she did not trust VO and the fact that he spent more than a half hour with Putin. However, I believe he had his Paks idea, but he was there a chairman of Fidesz at an event with more than 2,300 people.

    https://hungarianspectrum.wordpress.com/2009/11/26/past-and-future-hungarian-prime-ministers-in-russia/

    an other article I found about this issue.

    http://energyscee.com/2009/11/26/is-orban-riding-with-putin/

  17. @LwiiH re coincidence of American move and demonstration. I am afraid you misunderstood me. The American release of the information was planned but the demonstration had nothing to do with it. It just happened almost simultaneously.

  18. Internet tax in T/1705:

    At this moment, Rogan has withdrawn his ambiguous upper limit amendment, so the current bill in front of the House contains the full force of 150 forint/GB.

  19. OT but fascinating. For those who read German:

    http://bazonline.ch/wetter/allgemeinelage/Ein-Firmennetzwerk-das-sich-eine-Zuger-Adresse-und-die-Naehe-zu-Orban-teilt/story/25579199

    It is about some very shady business in Switzerland that may be involve Orbán himself. To help the understanding of the complicated connections between firms click on the graphics to enlarge it. Even MOL is there and Orbán’s good friend Garancsi who might be actual a front man of the prime minister himself.

    Hungarian translation here:

    http://www.galamuscsoport.hu/tartalom/cikk/419288_svajci_lap_orban_kozeli_ceghalo_egy_svajci

  20. Antal Rogan’s bill to cap the internet tax was just revoked.

    Currently the bill which is effective, is the uncapped internet tax.

    Orban will introduce the tax, under a different name.

    Because he wants to escalate the fight.

    He wants to provoke the anti-internet demonstrators and the Peace March people.

    The bigger the anger, the better.

    He will position himself as the moderate force (as if Peace March wouldn’t be a directly managed Fidesz party branch) who rises above all these petty fighting.

    Given the expectable damage the Fidesz HQ will suffer (provocators will be sent too), the laws will be tightened and survallence increased.

    http://hvg.hu/gazdasag/20141104_Visszavontak_Rogan_javaslatat_az_internet

  21. Btw it is not Daneb Algedi Invest, but Deneb Algedi Invest. The Managing Director is Lakatos Benjamin, who himself lives in Wollerau.

    From Moneyhouse: http://www.moneyhouse.ch/en/u/deneb_algedi_invest_ag_CH-170.3.037.204-2.htm

    In Wollerau where apparently Lakatos is living is another p.o.Box for Hungarians at company called MAF Zurich (http://www.zcgroup.org/hu). Also I noticed the ATC Group, which is a well known trust office in The Netherlands, just recently taken over by Intertrust,is the Corporate Headquarter of Deneb. And also do private banking.

    http://www.privatebanking.com/directory/europe-switzerland-zug-zug/banks/intertrust-group-holding-sa

  22. Back to Eva’s orginal topic of Hungary’s eastward drift. As I have been indicating in numerous posts the United States will in the future become far more aggressive towards stopping Russian expansion and influence in Central Europe. The linked article from US News indicates the push for expanded military expenditures and a much more robust military presence in Europe will begin even prior to President Obama leaving office. I am of course very supportive of such a perspective as are most retired military officers in the USA. But there are economic consequences that typically the article avoids, because the money must come from somewhere. I suspect it will come from cuts to human services and as small as possible tax increases. I believe these unfortunate trade offs will be agreed to by the electorate over the next few years.

    Note in particular this passage from the article:

    ” Restoring U.S. force presence in Europe to deter Russia and reassure allies. The need to rebuild U.S. military presence in Europe is clearly overdue after Russia violated sovereign territory, invaded Ukraine and annexed its territory. Pentagon budget officials have noted this month that the president’s budget for next year is being reworked in light of this latest aggression. Army force structure should have never fallen this far in Europe in the first place. Congress should not only be supportive of the forthcoming proposals, but should also consider whether they do nearly enough to restore credible deterrence and stability to this region.”

    The predominant dialog among the Jobbik and Fidesz about the decline of US military power in Europe will change to the new Russian line – the Americans want total dominance. Neither the Russian line about the relative decline of US power nor the idea that the USA is seeking total dominance is based in reality. The truth is Putin is a dangerous man who is destabilizing Central Europe and given the weakness of our European allies will have to be contained by US military and political power.

    http://www.usnews.com/opinion/blogs/world-report/2014/11/03/5-national-security-priorities-after-the-2014-elections

  23. This is how detailed a US government report was in February 2010:

    “Most contacts, however, view the recent sale of a 50 percent stake in MET to Normeston Trading, a Belize-registered offshore entity rumored to be owned by “Russian individuals,” as an effort to gain its own access to Russian gas. Moreover, Kutas informed us that MOL, together with Gazprom trading arm Centrex, has recently cherry-picked some large customers from E.On and that MOL has now replaced E.On as the sole supplier to troubled gas trader/retailer Emfesz.”

    https://www.wikileaks.org/plusd/cables/10BUDAPEST78_a.html

  24. Tappanch thank you very much for this video. I believe that Szel Bernadett did not recognize this guy (0.21 to 0.26). His name is Dr. Kovácsics Iván. He use to be in charge of the VPOP, than he was something big (I believe Chairman) in the Chamber of Commerce Hungarian-China.

    Than he fall from grace.
    http://atlatszo.hu/2014/02/19/afacsalok-barlangjaval-uzletel-a-nav-elnokhelyettes-csaladja/

    A big VAT scandal. Sound familiar.

    Here is his picture and CV. http://www.whoiswho-verlag.ch/versionnew/ungarn/verlag/63.php?txt_Language=HU&real_str_PersID=HU10000540&uniqueID=44638d9c-648d-48a2-ae89-2a6e0c5168b7

    So he is still working for the NAV. Interesting.

  25. Horowitz that was an interesting link on Putin’s troll army, I suspect that the attack that was unleashed against me on this blog about a month ago came from that very office building in Russia. Including the claims I was a mass murder of Vietnamese children, a fraud, and actually a master KGB agent. But there is no point in attempting to determine who is a professional paid troll and who might be a unpaid supporter of Orban or for that matter Putin. Just deal with the content they are putting forward, the paid professional trolls will retreat once they are confronted with any detail because as the article Horowitz linked indicates they are in the extreme uninformed and follow the political line of Russia Today.

    Possibly what is even more sad are pacifists and the remnants of the American left that accept many of the arguments posted on Russia Today as having validity or being an actual,alternative source of news. I read RT regularly, not for news, but rather to determine what the Russian line is.

  26. @Eva, I don’t think I mis-understand you. I was suggesting that the American’s held off with the travel bans until after the elections. The internet tax protests are something that I don’t think anyone predicted (least of which the dear leader) so that timing was spurious.

  27. That article on the Hungarian mafia in Switzerland originally appeared as part of a series in the Zürich newspaper “Tagesanzeiger” – I already linked to that and also posted it on politics.hu.

    It’s really interesting – the “Tagi”, as it’s commonly called in Zürich is the liberal equivalent of the conservative NZZ. I wonder who put them on that Fidesz/Orbán trail?

    PS and OT:

    I once did some IT consulting work for them – a long, long time ago …

  28. OT

    http://tvo.org/video/207816/judgment-hungary

    I have today received this link which is to a documentary recently shown on TV in Ontario, Canada. It was made in Hungary recently of the killings of Roma few years back.

    The movie caused huge waves, including a major atrocity in Berlin. There at a premiere, which was followed by discussion with the producers, the reps of the Hungarian government appeared without invitation, and provoked the audience with saying that this movie should have not been made, because it portrays Hungary very negatively.

    Now thanks to the Ontario channel you can see it with English subtitles. It is well worth watching.

  29. @Eva, Gretchen

    I cannot watch the movie from Hungary either.
    Here is an untried workaround. Use the secret browser, install Adobe flash player on it (of course, this way you compromise the browser somewhat), and find a Canadian identity.

  30. Change in the % of poor, EU, 2008 to 2013.

    Biggest increase
    1. Greece
    2. Hungary
    3. Cyprus

    Biggest decrease:
    1. Poland
    2. Romania
    3. Austria

    Largest poor population in % in 2013:

    1. Bulgaria 48.0%
    2. Romania 40.4%
    3. Greece 35.7%
    4. Latvia 35.1%
    5. Hungary 33.5%

    Smallest poor population:

    1. Czech Republic 14.6% (!)
    2. Netherlands 15.9%
    3. Finland 16.0%
    4. Sweden 16.4%
    5. France 18.1%
    6. Austria 18.8%
    7. Denmark 18.9%
    8. Luxembourg 19.0%
    9. Slovakia 19.8%

    http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-04112014-BP/EN/3-04112014-BP-EN.PDF

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