Some media outlets have dubbed Hungarian Prime Minister Viktor Orbán the “last in the EU” ally of Russia and Putin. With the outbreak of the full-scale Russian war, Hungary refused to provide any military aid to Ukraine and opposed the imposition of several anti-Russian sanctions.
In September 2023, Orban said his government “will not support Ukraine on any international issue” “until Kyiv returns rights to Transcarpathian Hungarians” (Hungarian minority in the Ukrainian region of Transcarpathia).
A year earlier, when the possibility of abandoning Russian energy resources was being discussed internationally, the Hungarian government announced that it had signed a contract with Gazprom for additional natural gas supplies through Serbia. Hungarian Foreign Minister Peter Szijjártó then called the subsequent reaction of the Ukrainian side “interference in Hungarian affairs” – again emphasizing that the Hungarian people will have enough natural gas for the winter.
Orbán’s statement that Ukraine will not win on the battlefield and the EU should change its strategy by preparing a “plan B” and emphasizing the inexpediency of spending Hungarian taxpayers’ money to help Ukraine is an example of working for a domestic audience. The EU could not approve a 500 million euro tranche of military aid to Ukraine precisely because of Hungary’s position.
Observers say that Hungarian politicians have lowered the reputational bar too low for the sake of the Russian gas pipe, which will be deduced without exaggerating Putin’s influence on geopolitics, Dеlfi writеs. Here, instead, we should talk about symbiosis – it is a political campaign for the domestic audience, considering the electorate’s fatigue from the war and the very “sweet” (or rather, gas and oil) gifts from Moscow.
A new Hungary-Russia gas agreement, new schemes
Peter Szijjarto, Minister of Foreign Affairs and Trade, visited Russia on August 30, 2021. In St. Petersburg, he met with Alexey Miller, CEO of Gazprom. There was a discussion over Russian gas deliveries to Hungary. The group also reviewed the Russian capital’s control of Hungary’s national gas transmission network.
As a result, on September 27, 2022, a gas contract was signed. The signing ceremony in Budapest was attended by E. Burmistrova, Deputy Chairman of the Gazprom Management Committee, and P. Szijjarto, Minister of Foreign Affairs and Trade of Hungary, indicating the event’s significance for Russia.
The signed agreement is for 15 years, with the option of renewing the terms after 10 years. Hungary will get 4.5 billion cubic meters of gas per year under the arrangement, with 3.5 billion cubic meters coming from Serbia (through the Turkish Stream gas pipeline and its onshore extensions) and 1 billion cubic meters from Austria, as 24tv channel reported.
Orban met with Putin in Moscow in early February 2022, during which the Russian president, in particular, stated: “It is essential that even now, Hungary buys Russian gas five times cheaper than the market price in Europe.” Orban responded, saying: “We met for the first time 13 years ago. This is our thirteenth meeting. This is unique.”
What was the need for a new gas agreement?
Hungary consumes an average of 9-10 billion cubic meters of gas annually, with consumption varying according to climatic conditions, particularly in winter. Panrusgaz (a joint venture between Gazprom and Hungarian energy trader MVM) was the sole supplier of Russian gas to Hungary until October 1, 2021.
Two long-term contracts for natural gas delivery to Hungary were signed in 1996 by Gazprom Export and Panrusgaz for the period up to 2015, and these agreements were then extended until 2021. The delivery of 8 billion cubic meters of gas has been contracted.
Supplies were sent in two directions under these contracts: Berehovo on the Ukrainian-Hungarian border and Baumgarten on the Slovak-Austrian border. For accurate figures, Gazprom supplied 8.6 billion cubic meters of gas to Hungary in 2020 and 10.5 billion cubic meters in 2019. A
Approximately 4.5 billion cubic meters of gas were delivered through Ukraine. According to public statements by representatives of the Orban government and Gazprom, the supply volume under the new agreement is 4.5 billion cubic meters of gas annually.
However, the cost of gas has yet to be published; only that the new arrangement is significantly more profitable than the 1995 agreement is indicated. Moreover, based on Putin’s words, it can be believed that the contractual price is USD 200 per 1000 cubic meters of gas. The absence of transit through Ukraine, which significantly raises the cost of transit to Hungarian homes, is the essential characteristic of the new deal.
Overall gas consumption is roughly 9-10 billion cubic meters. Gazprom has consistently supplied approximately 90% of Hungary’s total consumption. As a result, the gas supply will likely be limited to 4.5 billion cubic meters, as specified in the agreement.
More likely is the scheme in which 4.5 billion cubic meters are supplied through the energy company MVM Group at an estimated contract price of $ 200 per thousand cubic meters. Another 4.5 billion cubic meters are provided at market prices at an estimated cost of $ 1500 per thousand cubic meters through commercial entities affiliated with Gazprom and the Orban regime.
As a result, the difference between the contract and market prices is the amount Hungarian officials and Gazprom structures can pocket – 1.3 billion dollars.
Orban will continue to laud Putin’s Russia while blaming the European Union and the United States for attempting to diversify the country’s energy source so that regular Hungarians can have heat in their homes. Furthermore, such funds can be used to exorbitantly increase the repressive machinery, further repressing the opposition and imposing punitive measures on individuals with a vision for improving Hungarians’ lives.
When Orban turned to a pro-Russian leader?
However, Orban’s stance was not pro-Russian from the start of his political career. It changed only in 2014 when the warming in Orban-Putin relations began to become a dynamic drip. As András Rácz writes, it was then that Orbán’s government signed a contract with Moscow and received a 10 billion euro loan as part of Orbán’s “opening to the East” and the modernization of the Paks nuclear power plant – the only operating nuclear power plant in Hungary. Orban decided to offer the modernization contract to Russian firms. Therefore, one of the reasons for friendship and “last alliance” is quite prosaic – joint energy projects and cheap gas.
In March 2023, as Reuters reported, Hungarian Foreign Minister Peter Szijjarto held telephone talks with Russian Deputy Prime Minister Alexander Novak on further gas supplies through the Turkish Stream pipeline. In turn, the Hungarian side intended to block the EU’s anti-Russian sanctions in the energy sector.
Notably, one of the main theses of Russian propaganda is the assurance that any attempts by Europe’s sworn partners to break the bonds of energy dependence will lead to hunger, cold and curses from the malnourished, freezing and rapidly growing poorer European population.
But even if we accept the Kremlin’s thesis that EU pricing, wages, and the economy as a whole depend solely on the factor of trade-not-trade with Russia (and no other factors), the picture of a supposedly prosperous allied Hungary against the backdrop of its anti-Russian neighbors does match the reality. At the end of last year, Hungary was among the EU countries with the highest inflation and rising food prices. Perhaps Viktor Orbán’s economy has only benefited from the alliance with Putin. However, there is still no justification to talk about the prosperity of the Hungarian economy.
But it is not only the desire to increase domestic political points, to please the electorate and to buy Russian energy resources at a reputational discount. Another reason explaining Hungary’s odd position is linked to banal territorial (neo-imperial) sentiment, which has the same basis as Russian sentiment. It is indicative that in November 2022, Orban appeared in public wearing a soccer scarf with a map of “Greater Hungary,” which included part of Ukraine and Romania.
And, of course, the scandals tied to citizenship and language issues add fuel to the conflict: Hungary has a law on simplified granting of citizenship to applicants whose ancestors were born on the territory that formerly belonged to Hungary. Under Ukrainian law, a Ukrainian citizen’s voluntary acquisition of a second citizenship led to the loss of his or her Ukrainian passport (this also echoes the fight against separatism in the Southeast and the distribution of Russian passports to residents of Donetsk and Luhansk regions).
In 2018, Kyiv declared persona non grata the Hungarian consul in Transcarpathia after the publication of a video where the consul issued Hungarian passports to Ukrainian citizens, recommending hiding the fact of dual citizenship from the Ukrainian authorities. The Hungarian side reacted in a mirror-like manner, expelling the first secretary of the Ukrainian embassy and promising to add sticks to the wheels to complicate Ukraine’s path to the EU.
To date, the Hungarian side also emphasizes that it intends to block Ukraine’s accession to the EU until Kyiv meets Budapest’s demands to grant rights to the Hungarian minority. Another stumbling block is the Ukrainian law, according to which national minorities must receive at least 70% of their education in the Ukrainian language. It would be somewhat naive to believe that the Orban government’s actions are motivated solely by a desire to protect the Hungarian minority in Ukraine.
Perhaps the basis of Orban’s policy is the trinity of post-imperial national resentment, energy bonuses, and political populism. Soviet tanks in Budapest from 1956 have become a mirage from the past. Russian gas via the Turkish Stream from 2023 is a priority of the present for the current Hungarian government.