Putin’s visit: “Strategic impetus” for future Russian-Hungarian relations?

Yesterday the Russian ambassador to Hungary, Vladimir Sergeyev, when asked about Russian President Vladimir Putin’s visit to Hungary, basically repeated what Prime Minister Viktor Orbán has been telling the Hungarians in the last few days. Putin’s visit to Budapest is nothing out of the ordinary. The main topic of the talks will be “the extension of a long-term contract” that will ensure the uninterrupted flow of natural gas from Russia to Hungary. The contract is due to expire this year, hence the urgency of the negotiations. Sergeyev emphasized that Putin’s visit has nothing whatsoever to do with “the overall situation in the world and the tension we now observe.” In addition to energy questions, the two leaders will discuss “cooperation in tourism and culture.” All this sounds utterly innocent until we get to the last sentence: that the talks are designed “to give a strategic impetus” to the future development of relations.

Viktor Orbán, although he is usually quite tight-mouthed, also indicated, perhaps unwittingly, that “over and above the question of energy, we must strive for a truly balanced relation. That’s why we invited and welcome President Putin.” These sentences indicate that the conversations will go beyond economic relations. Suspicion is growing in Budapest that the “urgent issue of the gas supply from Russia” is only an excuse for a visit by the Russian president. The real reason is what Ambassador Sergeyev called a “strategic impetus” for closer relations between the two countries. And that is a political, not an economic issue.

Let’s return briefly to Lajos Simicska, the oligarch to whom Viktor Orbán owes his rise to power but who is no longer Orbán’s friend. In his interview with Magyar Narancs Simicska told the reporter that after the April elections he had a long conversation with Viktor Orbán, during which the prime minister outlined his “plans,” which Simicska did not like. Among other things, Orbán shared his views of Russian-Hungarian relations, which Simicska found odious. He expressed his disapproval of Orbán’s scheme, saying: “No, I don’t like it at all. I grew up at the time when the Soviet Union was still here and I don’t have pleasant memories of the activities of the Russians in Hungary. I can’t really see any difference between the behavior of the former Soviets and the political behavior of today’s Russians.” I am sure that Simicska’s anti-Russian feelings are genuine. He was known for his intense dislike of the Soviets even as a high school student. This antipathy most likely had something to do with his father’s involvement in the Revolution of 1956 and the reprisals the family suffered as a result. If his old friend Viktor had talked to him only about economic ties and a secure supply of gas, surely Simicska wouldn’t have reacted so negatively.

A Romanian view: “Putin will visit Hungary: A challenge to the United States”
Source: Independent.md

No, it is becoming clear that the urgent negotiations about a long-term gas contract are only a smokescreen. Although it is true that the current agreement will expire at the end of June, the flow of gas will not stop. According to the present contract, Gazprom is obliged to supply gas to Hungary for at least two more years. Perhaps three. Fifteen years ago, when the contract was signed, energy consumption was higher than it is now. The contract specified a certain amount of natural gas between 2000 and 2015, but that amount hasn’t been used up. So why is this deal suddenly so important to Orbán? Why does he think that he will be able to get the best deal from Gazprom thanks to Putin’s good offices? What did Orbán promise to Putin in exchange for cheap gas? Will he get cheap gas and, if so, at what price? Will Rossatom’s building of the two new reactors at Paks be enough for Putin in return? Or will Orbán be ready to sell or rent the storage facilities he purchased earlier from the German firm E-On to Gazprom? Most important, why is Orbán so keen on a special deal with Gazprom when by now Russia’s monopoly on the gas supply to Europe is broken?

Some observers even claim that it is not to Hungary’s advantage to sign a long-term contract with Russia because the current market price of natural gas is actually lower than what Hungary is paying for Russian gas. Hungary is paying between $350 and $400 for 1,000m³ of gas; on the open market it sells for $300. Moreover, as I already noted, Russia’s gas monopoly is a thing of the past. By now there are alternate pipelines through which western gas can reach Hungary. Although it is true that the completion of the pipeline between Slovakia and Hungary has been delayed due to technical problems on the Hungarian side, it should be ready very soon. Meanwhile gas has been steadily coming into the country from Austria and Croatia.

The Orbán government in the last five years or so was not too eager to work either on alternative pipelines or on reducing the amount of gas used by Hungarian households, which is twice that of Austrian households. The reason is inadequate insulation. European Union directives oblige energy suppliers to improve the insulation of buildings, but for some strange reason the Orbán government is in no hurry to change the Hungarian law to allow such a solution. According to experts, people could save 30 to 50% on their gas bills if this essential repair work on windows and doors were done. Definitely more than the much touted 10% decrease in utility bills legislated by the government.

Orbán has exaggerated the danger of running short of gas. He even indicated that if he is unsuccessful in his negotiations with Putin, Hungarians will freeze to death because there will be no gas to heat their houses and apartments. Of course, this is not only an outright lie but a stupid business tactic. If the situation is so desperate, the negotiating partner will have the upper hand in the negotiations, as several people pointed out.

And with that I return to Russian Ambassador Sergeyev’s mysterious “strategic impetus” for future relations between the two countries. Suspicion is growing in Hungary that Orbán is making some kind of a political deal with Putin which may commit Hungary to a closer relationship in the future. Miklós Hargitai of Népszabadság goes so far as to speculate that “it is not the decrease in our utilities bills that will depend on Putin but Orbán’s hold on power.” For whatever reason, the Russian card seems to be of the utmost importance to Hungary’s gambling mini-Putin.

Orbán’s Hungary and Lukashenko’s Belarus

On May 15 Péter Szijjártó, undersecretary in charge of foreign policy and foreign economic relations, received three new jobs from Viktor Orbán. He will be the chairman of the Hungarian-Belarussian, Hungarian-Turkman, and Hungarian-Uzbek bilateral economic councils. Following the announcement, Szijjártó’s spokeswoman emphasized that “economic cooperation with the former Soviet member states are the foundation pillars of the government’s strategy of the Eastern Opening and therefore the government will pay special attention to bilateral relations with Belarus, Turkmenistan, and Uzbekistan.'”

Uzbekistan is described by Amnesty International, Human Rights Watch, and the U.S. Department of State as “an authoritarian state with limited civil rights” in which there is “wide-scale violation of virtually all basic human rights.” Turkmenistan’s record is no better. Its government operates as a single party state. The country has been widely criticized for human rights abuses and has imposed severe restrictions on foreign travel for its citizens. According to Reporters Without Borders 2012, Turkmenistan had the second worst press freedom conditions in the world, just behind North Korea. Belarus is described as a dictatorship and has been barred from the Council of Europe since 1997.

So, these countries are the pillars of Viktor Orbán’s “Eastern Opening.” Nice company Hungary is keeping. Clearly, the Orbán government is ready to cooperate with countries with natural resources. Both Turkmenistan and Uzbekistan have extensive natural gas reserves and phenomenal economic growth. Belarus, on the other hand, seems to be in constant economic crisis; occasionally Putin’s Russia helps the country out with large loans.

Not much appeared in the Hungarian press about Belarus before November 2012 when HVG reported that Alexandr Lukashenko, the country’s president, announced that “the Hungarians seemed to have had enough of democracy and market economy. They sobered up.” He recalled that in the good old Soviet days the two countries were friends, and he expressed his belief that the two countries will strengthen their ties in the near future. “We cannot lose Hungary.”

That exchange between the Belarus president and the new Hungarian ambassador to Minsk made quite a splash in Budapest. Árpád W. Tóta, a commentator known for his verbal virtuosity and keen sense of politics, had a grand time with Lukashenko’s description of Hungary’s undemocratic ways, adding that Hungary is nowhere close to Lukashenko’s Belarus but “we are coming along nicely.” According to András Giró-Szász, government spokesman, Lukashenko “was only joking.”

Interestingly, at the time the Hungarian government was not eager to inform the public of closer Belarussian-Hungarian relations. Hungarian papers learned about the details from the Belarussian Telegraph Agency. For example, already in October 2012 “Minsk was playing host to the third meeting of the intergovernmental Belarussian-Hungarian commission for economic cooperation and the Belarussian-Hungarian business forum.”  The Belarussian Ministry of Sport and Tourism and the Ministry of National Economy of Hungary signed an agreement on cooperation in the field of tourism.  Working groups were set up for the study of cooperation in the fields of agriculture, industry, and tourism, as well as science and technology. In mid-December 2012 Aleksandr Khainovsky, Belarussian ambassador to Budapest, met with Sándor Lezsák, deputy-speaker of the Hungarian parliament and head of the parliamentary friendship group Belarus-Hungary. “The parties discussed the prospects of Belarussian-Hungarian inter-parliamentary relations and agreed on expanding cooperation in these areas…. The sides also specified projects to promote Belarus-Hungary contacts in culture, education and youth exchanges.”

By February 2013 the Hungarian media learned, again through the Belarussian Telegraph Agency, that Belorussian officials carried on negotiations at the time when the Agro Mash Expo 2013 was being held in Budapest about Hungary’s importing more Belarussian agricultural machinery, especially tractors. Already in 2011 Hungary purchased 973 tractors from Belarus for $16.6 million.

Belarus agriculture: it seems that the tractors are being exported  www.bbc.co.uk

On May 1, 2013, Fidesz’s official website announced that Péter Szijjártó met Alena Kupchina, Belarus deputy foreign minister, in Budapest. They discussed setting up direct flights (Minsk-Budapest-Belgrade) that would “encourage economic and cultural relations between the two countries.” The two agreed that, as of the coming academic year, Hungarian will be taught at the University of Minsk. Further plans call for close cooperation in pharmaceutical research and development.

I was somewhat baffled that the same Alina Kupchina who met Szijjártó on May 1 was again in Budapest on May 6 when she met with two senior officials of the Hungarian Foreign Ministry, Zsolt Németh and Péter Sztáray. She came specifically for a “foreign policy consultation.” Németh at least brought up Hungarian concerns over the Belarussian human and political rights situation. He asked for the release of political prisoners because “this would assist Belarus’s more active participation in the work of the Eastern Partnership.”

Tomorrow I will continue with the other two “pillars” of Hungary’s Eastern Opening: Uzbekistan and Turkmenistan.