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

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.

American-Hungarian relations and John McCain’s visit to Budapest

It was a week ago that Gergely Gulyás, the young rising star of Fidesz, attacked the American ambassador designate, Colleen Bell, accusing her of bias against the current Hungarian government. At that time I pointed out that without Viktor Orbán’s approval or perhaps even instructions the open letter Gulyás published could never have appeared. Now, in light of the recent visit of Senator John McCain to the Hungarian capital, a fuller picture emerges about the circumstances of that letter.

The public learned only on January 30 that Senator McCain will be spending a day in Budapest. He came not alone but as part of a nine-member bipartisan delegation consisting of three senators and six congressmen.

Surely, the Hungarian government must have known for some time about the impending visit of the American delegation. I venture to say that they knew about it before January 22 when Gulyás published his outrageous letter accusing Colleen Bell of partiality toward the opposition. Those Fidesz politicians who watched the video of the Senate hearing realized that the Republican McCain had a rather low opinion of the ambassadors Barack Obama proposed and may therefore have thought that an attack on Bell would yield brownie points with McCain. If that was the case, it was based on a total misunderstanding of American politics. Sure, at home McCain will show his dissatisfaction with Obama’s choices, but in Budapest he will not cozy up to Viktor Orbán just because he thinks that Bell knows nothing about Hungary or diplomacy. He will follow American foreign policy toward Hungary, which is currently very critical.

A day before the visit of the American delegation János Lázár continued the attacks on the United States in connection with the electronic listening devices that were most likely used on Hungarian citizens as well. Here they found themselves in a strong position. All of Europe is up in arms over the facts disclosed by Edward Snowden, and the decision was most likely made at the highest level that this topic could be used effectively against McCain during the talks. Another miscalculation. McCain didn’t apologize but instead emphasized that surveillance is necessary in the face of terrorism. They will be more selective in the application of these devices in the future. Period.

Meanwhile the parliamentary committee investigating American surveillance held its first meeting on January 30.  In addition to the official members, János Lázár, head of the prime minister’s office, Sándor Pintér, minister of the interior, and János Martonyi, foreign minister, were also present. By the way, the so-called “moderate” János Martonyi, the favorite of former American ambassadors, also condemned Colleen Bell’s testimony as if he were not aware that Bell didn’t express her own opinions but simply presented the official position of the United States government. Pintér promptly made the proceedings secret while Martonyi announced that the topic of surveillance will “remain on the agenda,” adding that “it will take a long time to repair the trust that is so important between allies and friends.” János Lázár announced that the surveillance affair “may influence in a significant way the relations between the USA and Hungary.” All in all, the Orbán government was ready to receive John McCain in full armor. Lázár also said at the press conference after the meeting that the new ambassador “will have to appear before the parliamentary committee,” something that will surely not happen. Máté Kocsis, the youthful chairman of the committee, went even further. He wants to see Edward Snowden himself in Budapest to answer the committee’s questions.

It was only on Thursday that McCain’s impending visit leaked out. The Hungarian media was convinced that the chief topic of the conversations would be Ukraine. The newspapers recalled that McCain had visited that country in December, but they really couldn’t give any reasonable explanation why Hungary would be that important in connection with the crisis in Ukraine other than having about 200,000 co-nationals living in its subcarpathian region who at the moment don’t seem to be threatened. What we learned afterwards was that Viktor Orbán “informed the American delegation of the V4 [Poland, Slovakia, Czech Republic, and Hungary] discussion on the situation in Kiev.” So, Ukraine was not at the center of the discussions.

So, let’s see what McCain himself had to say about his time in Budapest. Besides the usual round of praise for the faithful ally, he stated that “we understand the concerns about the state of democracy in Hungary that have been raised by people both inside and outside of this country. Some of these concerns are very serious…. The United States and the rest of the free world have an abiding interest in Hungary’s continued development as a strong, inclusive, and tolerant democracy, with a free market economy, an independent judiciary, and a free media.” During the conversations “we also expressed our hope that Hungary will address its energy security needs in ways that further diversify Europe’s supply of energy.” To translate all that into plain English, McCain criticized the state of democracy in Orbán’s Hungary and also must have shared his concerns over Hungary’s sole reliance on Russian energy sources, especially now that Orbán seems to have committed Hungary to Russia in building two new reactors on borrowed money.

From other Hungarian sources it became clear that the forthcoming election was also discussed. McCain must have expressed his worries about the fairness of the election because apparently Orbán readily agreed to have international observers. McCain was also worried about the lack of transparency in the negotiations with the Russians concerning Paks. And at this point I’m not at all sure that McCain knew that all the financial details of the Paks negotiations have already been made secret for years to come.

McCain and the others present were familiar with the memorial to be erected on Szabadság tér. They even talked about anti-Semitism in Hungary. The Democratic congressman from Florida, Ted Deutch, told Orbán that he must be sure that the monument will not be used “to whitewash history.” Apparently, Viktor Orbán gave his word, but unfortunately we know how much his word is worth.

The American delegation met Attila Mesterházy, Gordon Bajnai, Benedek Jávor, and Gábor Fodor. I assume that Ferenc Gyurcsány was not present because in 2007-2008 he was accused by the Americans, with help from Viktor Orbán who was then in his anti-Russian mode, of being a great friend of Vladimir Putin.

Magyar Nemzet and Magyar Hírlap, the government’s mouthpieces, have for some time been publishing articles with a sharp anti-American edge, but since the Orbán government decided to take on the American government through an attack on Colleen Bell the articles and opinion pieces written in these two organs have become outright vicious.

Magyar Nemzet after the official meeting  made a flippant remark about “the former presidential candidate who suddenly had an attack of worry for Hungarian democracy.” István Lovas, the paper’s correspondent in Brussels, wrote an opinion piece in today’s Magyar Nemzet entitled “At last,” in which he expressed his delight that at last Hungary is hitting back: “Goodbye servitude, goodbye hopelessness.” Magyar Hírlap just today published four articles on American-Hungarian relations where they talk about John McCain as “a somebody called McCain, … a loud American” who lectures Hungarians about democracy and who “worries himself sick” over undemocratic Hungary. Hungarians are bored with all that talk about checks and balances they keep repeating. A few weeks ago an article in Magyar Hírlap described the oft repeated phrase “checks and balances” as American whining (nyivákolás).

I’m pretty sure that this fierce anti-American rhetoric is popular in certain circles in Hungary, but I have to believe that it will have very adverse effects on both the diplomatic and the economic relations between Hungary and the United States.