Austria

Russia and the European Union on a collision course over the South Stream pipeline

It was a week ago that the European commission told Russia that the “South Stream” pipeline, already under construction, and the contracts between Gazprom and six members of the European Union, including Hungary, violate European Union law. Klaus-Dieter Borchardt, director for energy markets at the European Commission, told the European Parliament on December 4 that the “intergovernmental agreements are not in compliance with EU laws.” The EU countries that signed agreements with Gazprom were told that “they have to ask for re-negotiations with Russia, to bring the intergovernmental agreements in line with EU laws.” The countries in question are Bulgaria, Hungary, Greece, Slovenia, Croatia, and Austria, as well as Serbia, which is a member of the Energy Community, an EU-backed international agreement covering former communist countries in Eastern Europe.

Deli Aramlat

The European Commission identified three major problems with the South Stream. First, Gazprom is in violation of the so-called ownership “unbundling” rules, according to which a company cannot be both a producer and a supplier of gas. It cannot own production facilities and transmission networks. Clearly, Gazprom does. Second, according to EU law, non-discriminatory access of third parties to the pipeline must be ensured. In other words, Gazprom cannot have the exclusive right to supply gas through the pipeline. Finally, the Commission found problems with the tariff structure.

If these treaties must be renegotiated, there will be a delay of not months but, according to Borchardt, at least two years. Bulgaria has already protested. Bulgarian foreign minister Kristian Vigenin, who used to be a member of the European Parliament, made it clear that his country is not happy with Brussels’ decision. “It is not a nice move to slow the construction, because the parties to the track area are already in readiness to kick off.” He emphasized that “this is a very important project” for Bulgaria and expressed his hope that the European Union will not “stop the South Stream project.” Bulgaria already began construction of the South Stream at the end of October.

Brussels, however, seems to mean business. Borchardt said “in all openness and frankness that the South Stream pipeline will not operate on the territory of the EU if it is not in compliance with our energy law.” The Russians seem to be as resolute as the European officials are. A representative of Gazprom who was present at Borchardt’s announcement stressed that “nothing can prevent the construction of South Stream.” Russia’s position is similar to that of Viktor Orbán: EU law cannot prevail in EU-Russian relations, which are governed only by international law.

The Hungarian media covered the news coming out of Brussels, but the Hungarian government offered no response to the rather harsh verdict of the European Commission on the bilateral treaties that had been negotiated with Russia. Although here and there one could read about visits of Gazprom officials, nothing was known about the actual state of the negotiations and their particulars. Only yesterday Világgazdaság, a normally well informed paper dealing with economics and finance, reported that perhaps in the next week or so Orbán and Vladimir Putin will talk about the EU objections. Apparently Mrs. László Németh, the minister in charge of national development, was charged with preparing the prime minister’s visit to Moscow. I’m not sure, however, whether this meeting will actually take place. Because, as we just found out today, an agreement has already been signed.

As usual, details of Hungary’s negotiations with foreign powers came from the other side. The Hungarian public learned today that Aleksei Miller, president of Gazprom, paid a visit to Budapest yesterday and signed an agreement concerning the construction of the South Stream pipeline. Journalists immediately bombarded the head of Orbán’s press department for details. They were told that the prime minister and the head of Gazprom didn’t sign any agreement. He added that negotiations between Mrs. László Németh and Gazprom will proceed according to plans.

So we had two versions of the story. Someone was not telling the truth. At least this was the conclusion journalists of opposition papers came to. Stop, an online site, asked its readers whom they believed, the Hungarian government or the head of Gazprom. A relatively new online paper whose political views seem to me to be close to the Demokratikus Koalíció talked about the “selective memory” of the officials of the Orbán government.

It turned out that the spokesman for Viktor Orbán didn’t lie outright. It is true that Orbán himself didn’t sign anything. But something was signed all right: an agreement between Gazprom and MVM (Magyar Villamos Művek/Hungarian Electricity Ltd.), a state-owned company. As I understand it, MVM and Gazprom established a joint company called Déli Áramlat Zrt (South Stream Corporation), each with a 50% ownership. It is a large, expensive project that might pose serious financial risks to MVM, especially if the EU stands fast.

Experts figure that the Hungarian part of the project will cost around 300 billion forints, for which MVM will be responsible. Today’s Népszabadság points out, however, that MVM will be able to borrow such a large amount of money only if the project has the European Union’s blessing and financiers feel safe lending so much money to the Hungarian company.

I have the feeling that this is just the beginning of an extended imbroglio. Viktor Orbán is ready for his next battle with the EU, Hungary’s enemy.

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Mass exodus from villages in Baranya County, Hungary

Hungary is witnessing a steady flow of emigrants. Admittedly, one could counter that it is incorrect to call those who seek work abroad emigrants because “to emigrate” means “to leave one country or region to settle in another.” One could argue that these people don’t plan to live abroad for good. However, there is a very good likelihood that people who spend a number of years in another country, establish a career for themselves, make new non-Hungarian friends, perhaps even marry local men or women will not return to their country of birth. A good example of that kind of emigration was the mass exodus of Hungarian citizens, especially from the Slovak-inhabited counties of northeastern Hungary, who left for the United States in the 1880s and 1890s in order to make enough money to return home and live in relative comfort. Most of them never saw Hungary again.

We know that at least 330,000 Hungarians now work abroad. I suspect that most of these people are from larger cities and from regions adjacent to the Austrian border. But today I read a fascinating report about the poverty-stricken south of the County of Baranya which has been witnessing “emigration fever.” The population of this region is in an utterly hopeless situation. There are places where over 50% of the population are unemployed without the slightest hope of finding work. In the entire county there was only one large factory, the Finnish Elcoteq, but in 2011 the firm filed for bankruptcy and between 5,000 and 7,000 people lost their jobs. Until 2011 the lucky ones in these godforsaken villages could find work in Pécs, commuting between work and home. That opportunity is gone.

The Pécs stringer for Népszabadság visited four tiny villages, two close to Szigetvár on the west and two near Sellye, the largest town in the so-called Ormánság. I might add here that the Roma population of south Baranya is pretty high. It always was, but by now there are villages where all of the inhabitants are Roma. This is especially true of the Ormánság. Both Szigetvár and Sellye are marked on the map below.

The reporter’s journey began in Kétújfalu (pop. 667), 13 km from Szigetvár. There even the Fidesz-KDNP mayor’s son moved to Germany where he began as a dock worker but by now has a job as a computer technician. He made 110,000 forints a month as a fire fighter in Hungary; he now makes about three and a half times that amount–1,300 euros a month. The thirty-year-old English teacher in the village school packed up a couple of years ago. She became a housekeeper in the UK. A fifty-year-old locksmith has been working in Germany for the last ten years. Last summer his wife followed him. She was a cook in the school, now she works as a cleaning lady. She gives the impression of being a “secure and self-confident person,” at least this is how the mayor, who is a German-Russian-gym teacher, describes her.

The situation is very much the same in Teklafalu (pop. 343) close by. The first emigrant was a butcher who went to Germany fifteen years ago. His son decided to become a butcher as well in order to work with his father. As soon as he learned the trade he followed his father to Passau where he got a job at the firm his father is working for. The family has two daughters who are still not on their own, but once they finish school the wife is going to follow husband and son. She is ready to work in a factory. After all, in the old regime she worked in a canning factory in Szigetvár.

After the son of our butcher left, interest in emigration grew in Teklafalu. Two women in their fifties left for Germany. The son of one them headed to Italy. A young fellow just left for the Netherlands, but he is not the first one in that country from the village. A young woman left years ago and recently her father followed her; he got a job as a security guard. “He had enough of the poverty,” as his neighbor said.

County of Baranya

County of Baranya

From the Szigetvár region the reporter moved south, close to Sellye, to a village called Bogdása (pop. 295). The place has a Catholic and a Hungarian Reformed church but neither priest nor minister. They come from Sellye for services. The same exodus can be observed here. First, one fellow left for France and soon enough two more followed him. Neither man was unemployed at home; they had jobs but never made more than 120,000-150,000 a month. Now they make about five times that amount as plasterers. One of them is in Rennes and the other in Grenoble. Their sister is planning to go to Austria and would be happy to work either in a restaurant or in a hotel. Another couple moved to England where they work in a Sony plant. As their neighbors say, “they don’t even visit anymore.” Three men from the village work in a slaughterhouse in Germany while three others, also in Germany, got jobs as long distance truck drivers.

The most interesting story is from Drávafok (pop 508). Tímea  Buzás is thirty and Roma. She has been working in the United Kingdom ever since 2006 when she graduated as a midwife. At that time she applied for a job in Drávafok but lost out to someone else. She suspects that her Gypsy origin had something to do with it. So she decided to leave for Great Britain. Because she didn’t know English she first worked in a factory. Two years later when her English improved she got a job looking after elderly people. A year later she got a regular job as a nurse. Today she is head nurse in Crawley and makes 2,500 pounds a month.

In the last six years she paid off her parents’ mortgage on their house (4 million), spent 2 million fixing up their house in Drávafok, bought an apartment in Pécs for 8.5 million, and spent another 2 million fixing it up. She also generously helps others, preparing them for the journey and conditions in the UK. She apparently managed to get jobs for 72 of her acquaintances. Once they are there she helps them open bank accounts, fill out job applications, and find apartments. Out of the 500 inhabitants of Drávafok there are at least 15 people just in England.

These people, six months after arriving in the UK, are able to send home 200,000-250,000 forints a month. Not surprisingly there is great interest in moving to Great Britain in Drávafok. Tímea, who is currently spending her summer vacation at home, was approached by seven of her neighbors in just the past few days. The only impediment is that future emigrants must have some initial capital with which to start their new lives. According to Tímea one needs at least 300,000 forints. Since most of the inhabitants of Drávafok can get only 45,000 forint public works jobs it is almost impossible to scrape together such a sun. Otherwise, I suspect, there would be no way of stopping them.

Until now the Roma of Baranya County didn’t rush to leave the country seeking jobs abroad. That has changed. As one mayor in the region said, the best educated and the most ambitious are the ones who are leaving, which is a real pity.

Yes, this situation greatly resembles what was going on in the northeastern counties of Greater Hungary in the late nineteenth century. The news spread by word of mouth. One villager went to the United States to work in a factory or mine and sent home glowing reports about his good fortune. And more and more packed up until half of the villages had no adult men. This is what seems to be going on today, at least in Baranya. But now the women are also leaving.