Birds of a Feather

February 19, 2015 By Orange Files in Bayer, Orbán, Putin, Russia Leave a comment

President Vladimir Putin of Russia and Prime Minister Viktor Orbán of Hungary during a joint press conference in Budapest on February 17, 2015 (photo: Hungarian News Agency).

President Putin and Prime Minister Orbán at a joint press conference in Budapest on February 17, 2015 (photo: Hungarian News Agency).

On February 17, 2015, President Vladimir Putin of Russia made an eight-hour official visit to Budapest. There hadn’t been so much portentous excitement among Hungarians surrounding the arrival of a foreign statesman to their country in a long time, perhaps even since the System Change. Not because Putin had any important business to do in Hungary, but merely because he is Putin―the larger-than-life and all-powerful leader of the newly revitalized and assertive Russia.

President Putin initiated the visit to Hungary as a means of breaking his foreign isolation and showing the West that he was a welcome guest in the capital of a NATO and European Union member state (source in Hungarian).

See entire post.

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Teutonic Shift

December 4, 2014 By Orange Files in Eastern Opening, Germany, Orbán, Russia, Ukraine Leave a comment

Seehofer and Orbán: pointing the way (Photo: Die Welt).

On November 6, 2014 Prime Minister Viktor Orbán made a seemingly routine trip to Munich to visit Minister-President Horst Seehofer of Bavaria. The stated purpose of the meeting between Orbán and Seehofer was to discuss issues related to the Hungarian state’s purchase of MKB Bank from the Bayerische Landesbank (Bavarian State Bank) earlier in the fall (source in Hungarian).

However, the official visit that Prime Minister Orbán made to Bavaria at the beginning of November in fact represented a major shift away from rapprochement with Russia as part of his administration’s Eastern Opening policy in favor of mending relations with the West via Germany. Though little noticed at the time, Orbán provided the first indication of this reorientation of his foreign policy during a joint interview with Minister-President Seehofer published in the November 9 issue of the Berlin-based conservative daily newspaper Die Welt. During the interview, Prime Minister Orbán said (source A in German and B in Hungarian):

We find ourselves in a very difficult situation. The Russians have made it clear that they want to establish a buffer zone between them and NATO and are willing to violate international law in the interest of doing this. . . Our point of reference in this crisis can only be international law. We cannot accept violation of this. It is moreover in the Hungarian interest that there always be something between us and Russia. Therefore we have a great interest in a stable and independent Ukraine. When I was young there was a Hungarian-Soviet border. This must not repeat itself.

Following the new leader (photo: AFP).

On November 12, the online edition of the opposition weekly HVG reported that “a high-ranking Fidesz political official who plays an important role in the conduct of international relations” told the website that sources close to Chancellor Angela Merkel of Germany had informed the Orbán government through informal channels that within the “current international environment” they consider its “maverick” (különutas) policy to be unacceptable. “We received strong signals regarding what Germany expected of us,” the unnamed Fidesz official told hvg.hu, adding that Prime Minister Orbán had thus decided to make the necessary changes to his administration’s foreign policy (source in Hungarian).

The “current international situation” cited in the hvg.hu report obviously referred to the conflict between Russia and Ukraine and the “maverick” foreign policy of the Orbán government to its failure to condemn Russia’s annexation of Crimea in March 2014 (see Vlad Beyond Reproach) and reluctance to support European Union sanctions intended to punish Russia for the unilateral takeover (see Notable Quotes: Prime Minister Viktor Orbán under heading “European Union Economic Sanctions against Russia” and National Economy Minister Mihály Varga under “Notable Quotes”).

Over the 12 days following the hvg.hu report, both Orbán and Minister of External Economy and Foreign Affairs Péter Szijjártó reinforced the explicit and implicit support for Ukraine’s territorial sovereignty that the prime minister initially articulated in his November 9 interview with Die Welt. Moreover, Orbán and Szijjártó made associated statements intended to affirm Hungary’s loyalty to the European Union in specific and the West in general. The following is a summary of these pronouncements:

November 12: Minister of External Economy and Foreign Affairs Szijjártó said during a joint press-conference with Foreign Minister Frank-Walter Steinmeier of Germany in Berlin that Hungary is committed to Ukraine’s sovereignty and territorial integrity. Szijjártó added that “Hungary will always be loyal toward common European decisions (source in Hungarian).

November 14: Szijjártó stated during an interview with the Financial Times that “Central Europeans know what it means to have a neighbor like the Soviet Union and we never want to experience that again.” With regard to the conflict between Russia and Ukraine, the Orbán government’s minister of external economy and foreign affairs said “The big and strong countries need to put the proposals on the table; they can count on our support for all solutions which bring the conflict to a swift conclusion” (source in English).

November 17: Szijjártó said with regard to EU sanctions against Russia during a visit to Brussels to attend a meeting of European Union foreign ministers that “Hungary supports expansion of the group of individuals subjected to European Union visa bans and if the occasion arises the imposition of further asset freezes” (source in Hungarian).

November 20: Prime Minister Orbán declared at a session of the Hungarian Permanent Conference [Magyar Állandó Értekezlet] in Budapest that “It is in the Hungarian interest, not the American or European, that there be something between Hungary and Russia, and this is Ukraine. A sovereign, democratic Ukraine, where a 200,000-strong Hungarian community lives” (source in Hungarian).

November 21: during a speech at the The Foundation for Family Businesses in Germany and Europe conference in Baden-Baden, Germany, Orbán remarked that “We had a common border with the Soviet Union. It was a big adventure, though it was enough.” The prime minister said that his administration supports Ukrainian sovereignty because “. . . we also believe that there must be something between Russia and Hungary” (source in Hungarian).

November 24: Orbán said in an interview with the German business daily Handelsblatt that “Chinese are necessary for the Chinese model and Russians for the Russian [model]. In Hungary and in Europe these solutions are unusable.” Orbán repeated during the interview that “It is in our interest to have something between Hungary and Russia—and that is a sovereign Ukraine . . . We had a common border with the Soviet Union and it lasted a long time until we were able to get rid of it. We do not want to have this again” (source A in German and B in Hungarian).

The abrupt turnabout of Prime Minister Orbán away from Russia and toward Germany represents the most dramatic policy change he has made in the four and a half years since returning to power in May 2010. This volte-face must be viewed within the context of Orbán’s loss of support among both Western allies (following his highly publicized crackdown on Norwegian Civil Support Fund-financed NGOs in Hungary beginning this spring and proclamation of the illiberal Hungarian state this summer) as well as among domestic advocates (following his announcement of the subsequently withdrawn Internet tax and the emergence of several high-profile instances of corruption, cronyism and apparent politics-for-profit within his administration this fall). In short: Prime Minister Orbán could not afford to further alienate his formal allies abroad as support for his “two-thirds revolution” weakens at home. The prime minister is specifically seeking to obtain political support from Germany, which has long been Hungary’s most significant foreign-trade partner and is currently governed by the two foreign parties with which Fidesz has maintained its closest ties—Chancellor Angela Merkel’s Christian Democratic Union and the affiliated Christian Social Union in Bavaria. However, Orbán, whose political retreats have never been more than tactical, is almost certain to shift Hungary’s external orientation back toward Russia and the East if he regains his domestic political footing.

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NYT vs. RT

November 13, 2014 By Orange Files in Orbán, Russia, United States Leave a comment

Russia Today photo: Foreign Minister Sergei Lavrov of Russia and Prime Minister Viktor Orbán of Hungary shaking hands.

On November 7, 2014, both the New York Times and the website of the state-run television station Russia Today (RT) published articles about Prime Minister Viktor Orbán and his administration.

The title of the New York Times piece: “Defying Soviets, Then Pulling Hungary to Putin – Viktor Orban Steers Hungary Toward Russia 25 Years After Fall of the Berlin Wall.”

The title of the Russia Today piece: “The bullying of Hungary – the country that dared to disobey the US and EU.”

These articles are quintessential representations of the fundamental attitudes of the anti- and pro-Orbán camps, both inside and outside Hungary.

In short: globalist vs. anti-globalist; liberal vs. anti-liberal; pro-West vs. anti-West.

Presuming that the opinions expressed in the New York Times and Russia Today largely reflect those of the Obama and Putin administrations, respectively, the November 7 pieces in the NYT and RT also provide further evidence that Hungary has become a secondary theater, behind Ukraine, in the struggle between the U.S.-led North Atlantic Treaty Organization and Russia to retain or regain political supremacy in the post-communist states of eastern Europe.

New York Times photo: Prime Minister Viktor Orbán at the Hungarian Parliament Building.

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Frack It to Me Baby!

March 23, 2014 By Orange Files in energy, Russia, United States Leave a comment

State Secretary Szijjártó (center) with his new friends.

On March 17, Prime Ministry State Secretary for Foreign Affairs and External Economy Péter Szijjártó declared during a ceremony marking the start of an expansion of the truck-wheel plant that U.S. aluminum company Alcoa operates in the city of Székesfehérvár: “Essentially we are also together here today in order to write another chapter in the success story of Hungarian-American economic cooperation” (source in Hungarian at 11:14).

This statement, though referring specifically only to economic cooperation, nevertheless signified the first time that, beyond protocol and formalities, anybody in the second Orbán government had referred to U.S.–Hungarian relations in genuinely positive terms as a “success story” since coming to power in 2010.

The reason for this turnabout is that Hungary is interested in the possibility of importing gas from the United States as a means of reducing its dependence on the import of gas from Russia via Ukraine.

On March 11, State Secretary Szijjártó met with United States Deputy Assistant Secretary of State for Economic and Eurasian Affairs Hoyt Brian Yee and Deputy Assistant Secretary for Energy Diplomacy Amos Hochstein in order to transmit the government’s request that the U.S. Congress act as soon as possible to expedite the process of authorizing U.S. gas exports to Europe (source in English).

Szijjártó’s meeting with the U.S. officials took place three days after the United States ambassadors of the Visegrád Group alliance of Poland, Czech Republic, Slovakia and Hungary, all of which are heavily dependent on the import of gas from Russia (source in English), sent a letter to U.S. House of Representatives Speaker John Boehner asking Congress to pass a legislative bill that would eliminate current impediments to the export of gas to states with which the United States has not concluded free-trade agreements, which includes all countries of Europe (source in English).

Fracking shale gas in North Dakota.

The United States has among the largest reserves of shale gas in the world (source in English). Production of shale gas, which is extracted through a process called hydraulic fracturing, or “fracking,” has risen dramatically in the United States over the past few years and will continue to increase in the future, making it possible for the country to export gas (source in English).

The U.S. Congress is considering legislation called the Domestic Prosperity and Global Freedom Act that would expedite the process of issuing Department of Energy permits for the export of gas to countries in Europe and elsewhere that do not have free-trade agreements with the United States, such as the North American Free Trade Agreement that facilitates U.S. gas exports to Canada and Mexico (source in English).

However, even if Congress approves the bill, gas-liquefaction and regasification terminals still need to be built in the United States and Europe in order for U.S. gas to be exported to European countries via tanker ship in the form of Liquefied Natural Gas (LNG). State-owned Croatian companies expect to complete an LNG regasification terminal on the island of Krk off the coast of Croatia in the northern Adriatic Sea in 2016 (source in English), while the first gas-liquefaction plant in the contiguous United States is expected to begin full-scale operation in 2017 (source in English).

Once regasified, the imported U.S. shale gas would be transported to Hungary via a new pipeline running across the country between Croatia and Ukraine (source in Hungarian).

According to a 2013 European Commission report, gas accounts for an uncommonly high 38 percent of the energy consumed in Hungary (source in English). Hungary imports just over 70 percent of the gas consumed in the country from Russia via a pipeline running through Ukraine (source in English).

Proposed route of the South Stream Pipeline.

The Orbán government previously hoped to reduce the dependence of Hungary on gas imported from the Russian state-owned energy company Gazprom through the import of gas from Azerbaijan via the planned Nabucco-West pipeline running to the country from Turkey, Bulgaria and Romania. However, the European Union- and United States-backed pipeline project may have suffered a fatal blow when the consortium of companies that operates the Shah Deniz gas field in the Caspian Sea off the coast of Azerbaijan decided in June 2013 to transport gas extracted at the field to Europe via the Trans Adriatic Pipeline rather than the Nabucco-West pipeline (source in English).

Gazprom was expected to begin delivering gas to Hungary through the South Stream pipeline via the Black Sea, Bulgaria and Serbia beginning in early 2017: this pipeline would reduce Hungary’s dependence on gas exported via Ukraine, but not on gas exported from Russia (source in English). However, European Union sanctions stemming from Russia’s annexation of the Autonomous Republic of Crimea in March 2014 have raised doubts regarding the eventual construction of this pipeline in EU member states (source in English).

State Secretary Szijjartó prefaced his March 17 praise for the “success story” of U.S.-Hungarian economic relations with a reference to Russia’s annexation of the Autonomous Republic of Crimea (source in Hungarian):

Permit me since we are celebrating an event which takes place within an international economic sphere—namely that an American company has decided to expand its capacity in Hungary, more specifically Székesfehérvár—that we say a few words about the world around us and the impact it exercises upon us as well. You, just as I, are certainly paying attention to the important changes that have been taking place in the world. Over recent days, world economic and political power-relations have been undergoing a significant transformation. We can state without exaggeration that a new situation has arisen. And it is totally clear that if there is a new situation in the world, all the players in the world economy—not only companies, but countries as well—must react to it with a new strategy.

Does this “new situation” signal the beginning of long-term improvement in relations between the Orbán government and the United States, a country with which the prime minister said Hungary had “problems of coexistence” during a 2013 speech to Hungarian diplomats (source in Hungarian)? Or do the recent friendly gestures of the Orbán government toward the United States represent a passing fancy that will give way to its previous cool contempt for the diminishing super-power once the Crimean crisis has passed? Orange Files suspects the latter scenario to be more likely, especially if construction proceeds on the South Stream pipeline carrying Russian gas to Hungary.

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Vlad Beyond Reproach

March 7, 2014 By Orange Files in Orbán, Putin, Russia, Ukraine Leave a comment

Russian soldier on patrol at Simferopol International Airport in Crimea.

Prime Minister Viktor Orbán has been one of the few political leaders of European Union member states who did not explicitly condemn Russia’s military intervention in the Autonomous Republic of Crimea in Ukraine beginning on February 27, 2014. Prime Minister Orbán, in fact, said nothing at all about the intervention for a full week after it began. The following are Orange Files translations of the prime minister’s initial, cursory comment about the Russian military intervention in Ukraine on March 3 and more detailed comment regarding the incursion on March 4. Note that more than 150,000 Hungarians live in western Ukraine, a region that is known in Hungarian as Subcarpathian Ukraine (Kárpátalja).

On March 3 Prime Minister Orbán said (source in Hungarian):

Hungary is not part of this conflict. Hungarians are secure. In Hungary and in Subcarpathian Ukraine as well. And the Hungarian government is working to ensure that they remain secure. Moreover, our foreign minister is currently in Brussels. Hungary is part of the common European efforts aimed at achieving peace, security and respect for international law. We are working toward these objectives within the context of united European crisis-management.

On March 4 Prime Minister Orbán said (source in Hungarian):

For us the most important thing in this whole conflict is the security of Hungarians. This includes both Hungarians living in Hungary and Hungarians living in Subcarpathian Ukraine. This is the perspective from which we examine the events. And that is why we sent the foreign minister to Subcarpathian Ukraine—so that he could make it clear to the Hungarians who live there that the Hungarians living in Subcarpathian Ukraine can count on us. The second Hungarian interest according to which we are gauging our steps pertains to Ukraine itself. It is in the Hungarian interest that Ukraine be a democratic state. Thus we want a democratic Ukraine, a Ukraine in which Ukrainian citizens can feel secure and at home, including citizens who belong to minorities, thus the Hungarians as well. This is why Hungary cannot accept the annulment of the language law. We consider this to be an illegitimate decision and we insist that the rights due to Hungarians are not impaired as a result of the changes in Ukraine. With regard to a resolution of the situation, the Hungarian viewpoint is a negotiated settlement. There is an obvious situation: Russia borders Ukraine from the east and the European Union from the west. From this it follows that Russia and the European Union must negotiate. We believe that negotiation is the only alternative to war. Therefore we want negotiation and not armed conflict—peace and not blood. In order to achieve this it is necessary that the two sides, the European Union and Russia, hold talks. Moreover, I am going to support the position in Brussels that the European Union must make an immediate response to Russian military movements. This response cannot be of military nature. The response must be decisive, immediate and of an integrative nature. . . .

The fundamental messages contained in Prime Minister Orbán’s delayed responses to the Russian military intervention in Ukraine were, in order of their pronouncement: “Hungary is not part of the conflict”; “the most important thing in this whole conflict is the security of Hungarians . . . both Hungarians living in Hungary and Hungarians living in Subcarpathian Ukraine”; “Hungary cannot accept the annulment of the language law”; “Russia and the European Union must negotiate”; and finally “I am going to support the position in Brussels that the European Union must make an immediate response to Russian military movements.”

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Prime Minister Donald Tusk of Poland.

The leaders of other EU member states located in eastern Europe made the following initial statements regarding Russia’s military intervention in Ukraine. Note that in 1994 the United States, the United Kingdom, Russia and Ukraine signed a diplomatic memorandum in Budapest in which Ukraine agreed to transfer all Soviet-era nuclear weapons located on its territory to Russia in exchange for the guarantee of Ukraine’s sovereignty and territorial integrity.

Prime Minister Donald Tusk of Poland said on February 27 (source in English): –

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We need international pressure on those who would like to break the principle of non-interference and respect for territorial integrity of Ukraine . . . It is clear that our expectations are becoming reality, namely that Crimea and Ukraine’s territorial integrity are becoming crucial issues . . . Russia’s approach to this key challenge of preserving Ukraine’s integrity will be the test of Russia’s true intentions towards Ukraine’s future.

Prime Minister Tusk said on March 2 (source in English):

Ukrainians have to find out today that they have real friends . . . Europe must send a clear signal that it will not tolerate any acts of aggression or intervention. . . . Therefore I will call on my European partners to exert pressure to preserve peace on Russia, not on Ukraine. It is Russia that seems interested in an unstable situation in that part of the world.

Prime Minister Tusk also said on March 2 (source in English):

We should be able to stop Russia in its aggressive moves precisely in order to avoid a conflict. . . . History shows—although I don’t want to use too many historical comparisons—that those who appease all the time in order to preserve peace usually only buy a little bit of time.

President Miloš Zeman of Czech Republic said on March 1 (source in English):

Although I fully understand the interests of the majority Russian-speaking population in the Crimea that was incorporated into Ukraine by an absurd decision made by Nikita Khrushchev in 1954, we have our experiences with the 1968 military intervention . . . I believe that any military intervention creates a deep ditch that cannot be filled during a generation.

Prime Minister Robert Fico of Slovakia said on March 1 (source in English):

We call on all sides for maximum restraint, and for a political and diplomatic solution to the crisis.

President Traian Băsescu of Romania said on February 28 (source in English):

As Romania has repeatedly said, Ukraine’s statehood, sovereignty, independence and territorial integrity are values in keeping with the public international law that must be observed by all states which recognized Ukraine’s independence in 1991, the more so the signatories of the 1994 agreement in Budapest.

President Băsescu said on March 2 (source in English):

Romania considers that any presence of the Russian Federation’s troops on Ukraine’s territory, without its consent and violating the existing bilateral agreements and subsequent notifications, is an aggression against Ukraine. At this moment, we consider that Ukraine is being assaulted by the military forces of the Russian Federation. Romania considers that the signatory states to the 1994 Budapest Memorandum have the obligation to immediately start negotiations to restore international legality, including the Russian Federation ceasing any moves on Ukraine’s territory. This agreement between the U.S., Great Britain and the Russian Federation represents, in our view, alongside the relevant international legislation, the guarantee for Ukraine’s independence and sovereignty.

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Orbán and Putin seal the Paks Nuclear Power Plant deal at the Russian president’s residence near Moscow.

The responses of these eastern European heads of state and government to Russia’s military intervention in Crimea are founded to a significant degree upon both common and specific historical experience and current geo-political and strategic considerations that place them in fundamental opposition to Russian expansionism in Europe: all five countries—Poland, Czech Republic, Slovakia, Hungary and Romania—are member states of an alliance, the European Union, that has come into growing friction with an increasingly assertive Russia; the Soviet Union occupied the eastern parts of Poland and Romania (Bessarabia) at the beginning of the Second World War pursuant to the 1939 Molotov-Ribbentrop Pact; the Soviet Union occupied all five countries for decades following the Second World War and imposed the communist political-system upon them; the Soviet Union furthermore invaded Hungary in 1956 and Czechoslovakia (the Czech Republic and Slovakia) in 1968 to suppress anti-Stalinist revolutions in those countries; and there is growing tension between Romania and Russia with regard to political influence over the Republic of Moldavia, the population of which is 70-percent Romanian-speaking and 10-percent Russian-speaking.

The above factors compelled Donald Tusk of Poland and Traian Băsescu of Romania to vociferously condemn the Russian military intervention in Ukraine and Miloš Zeman of the traditionally more Russophile Czech Republic to issue a qualified condemnation of the incursion. Aside from Prime Minister Orbán, only manifestly pro-Russian Prime Minister Robert Fico of Slovakia did not express disapproval of Russia’s intervention in Crimea.

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Prime Minister Orbán’s failure to condemn Russia’s military incursion in Ukraine is based on three factors that have superseded his formerly outspoken opposition to Russian expansionism: rejection of the new Ukrainian government’s annulment of the 2012 language law authorizing the use of minority languages, including Hungarian, in schools, courts and other government institutions in Ukraine; aversion toward the liberal democracy and free-market capitalism of the European Union and sympathy toward the authoritarianism and centrally guided capitalism of Vladimir Putin’s Russia; and the condition of economic and political subservience that Hungary assumed toward Russia when the Orbán government concluded an interstate agreement in January 2014 to have Russian state-owned nuclear-energy company Rosatom build two new reactors at the Paks Nuclear Power Plant with a 10-billion-euro loan from the state of Russia (see Deal of the Century).

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From Russia with Love

February 26, 2014 By Orange Files in media, Russia, Ukraine Leave a comment

On February 20, the bloodiest day of clashes between anti-government Euromaidan protestors and police in Kiev, Ukraine, Hungary’s state-run Kossuth Radio broadcast the following report in Hungarian about the demonstrations during the station’s 2:00 p.m. news (source in Hungarian at 14:00):

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The following is an Orange Files translation of broadcast:

Passions have not calmed in Kiev. Snipers are shooting members of law-enforcement services from the roof of a hotel. The Ukrainian interior ministry is recommending that people do not go out onto the streets, because there are armed individuals there. Law-enforcement organizations have begun the process of locating and neutralizing the terrorists. According to the former deputy president of the Ukrainian secret service, anti-terrorism investigation applies to all Ukrainian citizens and only serves to further aggravate the situation that has developed in the country. According to the former representative, the anti-terrorism operation is essentially tantamount to the introduction of martial law. In Kiev the Metro is still not running—its entries have been blocked with big metal bars. Banks, shops and cafés are closed. Meanwhile Kiev Mayor Volodymyr Makienko announced that he is withdrawing from the governing party in protest against the bloodbath and fratricidal war taking place in the Ukrainian capital. Representatives from the governing party and the opposition as well as demonstration leaders have initiated the urgent convocation of parliament in order to resolve the grave domestic crisis. Representatives from the governing party have summoned opponents to discontinue violence and begin peace talks with German, Polish, Russian and American mediation.

Pro-European Union demonstrator in Kiev.

Kossuth Radio aired this report as media throughout the rest of Europe focused the Ukrainian police’s use of live ammunition in an attempt to quell the increasingly violent anti-government demonstrations in Kiev, killing and wounding a large number of unarmed protestors in the process. The Kossuth Radio report does not cite the number of civilian casualties, at this time estimated to be around 60 dead and several hundred wounded over the previous 36 hours, referring to the Euromaidan demonstrators in a sentence without an identified source as “terrorists” whom law-enforcement authorities were “locating and neutralizing.” Nor does it mention any of the demands of demonstration leaders, notably the resignation of subsequently ousted president Viktor Yanukovych.

Kossuth Radio issued the following statement in response to criticism of the report (source in Hungarian):

The public media is reporting continually on the Ukrainian crisis. We use as sources for news both the opinions of the opposition and statements from the governing party as well as accounts from our reporters on location and from major world news-agencies. The report broadcast on Kossuth Radio’s 2:00 p.m. news on Thursday was likewise based on several various sources, including information from the Russia Today television station and the internet edition of a Russian daily newspaper. We are continually stating other opinions as well in the course of the radio’s news programs. News editors cannot express criticism of the reports arriving from various sources. Kossuth Radio has been subjected to several attacks as a result of the news it aired on a single occasion on Thursday. We draw the attention of those who have voiced criticism to the fact that they have seized upon a single report within an entire day’s programming, which included the broadcast of news reflecting numerous other points of view, though they do not mention these.

Orbán and Putin meet in Moscow in January 2014.

The Kossuth Radio statement reveals that the station based its 2:00 p.m. news report on the anti-government demonstrations in Ukraine on Russian sources, including the overtly anti-Euromaidan news station RT (formerly known as Russia Today), though the original report did not cite these sources. The statement contends that Kossuth Radio presented news of the demonstrations from other perspectives in the course of other broadcasts during the day. This contention, even if true, does not negate the fact that Kossuth Radio’s report on the protests during their deadly culmination on the afternoon of February 20 was much closer to that of pro-Yanukovych sources from Russia than it was to pro-opposition European sources such as those from the United Kingdom and France.

There are two reason that government-controlled Kossuth Radio broadcast this report essentially reflecting the official Russian stance toward the anti-government demonstrations in Kiev: first, the Orbán government wants to remain in favor with the Putin administration now that Hungary has signed an interstate agreement with Russia for a 10-billion-euro loan to build two new reactors at the Paks Nuclear Power Plant (see Deal of the Century); and second, there exists an obvious and forboding parallel between the pro-Russian Yanukovych government and pro-European Union demonstrators in Ukraine and the eastward-oriented Orbán government and the westward-oriented democratic opposition in Hungary.

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Conservative Ray of Hope

February 21, 2014 By Orange Files in Fundamental Law, Paks Nuclear Power Plant, Russia, Sólyom Leave a comment

The conservative former President of the Republic László Sólyom voiced explicit criticism of the Orbán government’s recent agreement with the state of Russia to build two new reactors at the Paks Nuclear Power while speaking at a conference at the Hungarian Academy of Sciences in Budapest on February 18. Sólyom, a legal scholar who served as president of the republic from 2005 until three months after the Fidesz–Christian Democratic People’s Party alliance came to power in 2010 and as president of the Constitutional Court from 1990 until 1998, said:

It is a fact that the signing of this extremely important agreement surprised not only the Hungarian people, but the Hungarian energy industry and even the government itself. It is also a fact that not only did preparations for the agreement took place in secret, but that all the data necessary in order to conduct an informed appraisal of the agreement has been classified as secret for a period of ten years. We encounter shoddy and contradictory arguments in [relevant] political communication. As president of the republic I publicly criticized the 2009 National Assembly resolution regarding preparation for the expansion of Paks [the Paks Nuclear Power Plant]. I emphasized that broad social debate based on comprehensive information must precede the decision. I continue to say that it is misleading to narrow the issue to the confines of a simple power-plant investment. The horizon extends beyond next month’s electricity bill—people have the right to become familiar with the complexities and consequences of the decision. We must see, honored conference guests, that this is a decision of exceptional importance that will affect three or four generations. . . . This commitment will obviously have an impact on our foreign policy, our national strategy, on the assessment of us in the world and the European Union. When did the National Assembly debate this? . . . The secret preparations [for the agreement] within the Prime Ministry, the decision thrust upon the National Assembly without sufficient information, the so-called debate conducted in the presence of just a few representatives and the classification as confidential of the pertinent data for a period of ten years have produced nothing other than a crisis in the exercise of political power (source in Hungarian).

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This is not the first time that Sólyom, a founding member of the national-conservative Hungarian Democratic Forum in 1987, has strongly criticized the Orbán-government. Sólyom described the Fidesz-KDNP-adopted Fundamental Law that replaced the 1949 Constitution on January 1, 2012, as follows:

This constitution is like the National Theater building, which has nothing to do with modern theater design, is eclectic, bombastic and was pushed through by force in spite of unanimous protest from the architectural community. However, good performances can still be staged in the building if there are good actors, a good play and a good director (source in Hungarian).

Sólyom voiced much harsher criticism of the Fourth Amendment to the Fundamental Law, which among other stipulations placed Temporary Provisions that the Constitutional Court had previously declared unconstitutional back into the law, declaring before President János Áder signed the amendment “That which is taking place is, in fact, not amendment of the constitution, but the stealthy introduction of a new constitution of another character” (source in Hungarian).

Sólyom said later with regard to the Fundamental Law adopted shortly before Easter 2011 and the five amendments enacted over the first fifteen months after it came into effect:

The name Easter [Constitution], the picture-book decorative edition and the table of the constitution (1) were unable to evoke the purifying experience of starting anew and immediately sank into obscurity. At the same time, it immediately became constitutional practice to make extensive amendments to the Fundamental Law based on daily expediency, which contradicted the officially encouraged notions of permanence, long-lasting foundations and authority (source in Hungarian).

Former president Pál Schmitt.

Sólyom, though quite close to the opposition green party Politics Can Be Different, has always been primarily conservative in his political outlook. He narrowly defeated the Hungarian Socialist Party candidate for president with the support of Fidesz in 2005. However, Prime Minister Orbán withdrew his previous support for Sólyom in 2010 after the president sent two Fidesz-KDNP-adopted laws back to the National Assembly for consideration in June of that year and another to the Constitutional Court for review in July.

Fidesz National Assembly representatives subsequently elected staunch Orbán loyalist Pál Schmitt to replace Sólyom as president of the republic when his term expired in August 2010. “I would not be an impediment to the government’s legislative momentum, but in fact would serve as a motor for it,” Schmitt said after his nomination (source in Hungarian). And indeed, over the 20 months Schmitt served as president until being forced to resign after the emergence of proof that he had plagiarized his Ph.D. dissertation, he signed every single law that came across his desk.

Former president Sólyom represents the small number of independent-minded Hungarian conservatives who do not uncritically support Prime Minister Orbán and Fidesz. Former president Schmitt represents the large number of Hungarian conservatives who never question the prime minister and his party. Pro-democracy, pro-European Union political forces will return to power in Hungary only when more of the country’s conservative voters begin to ask themselves if Prime Minister Orbán’s authoritarianism and turn toward the East really correspond to their traditional political values.

(1) Table placed at local-government offices in Hungary where citizens can apply for a free copy of the Fundamental Law.

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Deal of the Century

February 12, 2014 By Orange Files in Eastern Opening, energy, Paks Nuclear Power Plant, Russia Leave a comment

Orbán and Putin shake on the agreement

On January 14, 2014, National Development Minister Mrs. László Németh of Hungary and CEO Sergey Kiriyenko of Russian state-owned nuclear-energy company Rosatom signed an interstate agreement stipulating that Rosatom will build two new reactors at the Paks Nuclear Power Plant in south-central Hungary at a cost of between 10-12 billion euros, representing one of the biggest investments the government of Hungary has ever made (source in Hungarian).

Rosatom will build two new 1,200-megawatt reactors at the plant to replace its four existing 500-megawatt reactors due to be decommissioned between 2032 and 2037. The Orbán government says that the two new reactors will generate about 50 percent of the total demand for electricity in Hungary, compared to the current total of 40 percent (source in Hungarian).

The agreement calls for Rosatom to build the reactors with 10 billion in loans from Russia to cover 80 percent of the investment, while the government of Hungary will pay for the remaining 20 percent of the cost of the project and begin repaying the loan when the reactors are scheduled to open in 2025 (source in Hungarian).

National Economy Minister Mihály Varga announced on February 5 that the government of Hungary would repay the 10-billion-euro loan to Russia over a period of 21 years from the completion of the first reactor in 2025 through 2046 at an interest rate of 3.95 percent for the first eleven years, 4.5 during the second phase of repayments and 4.9 percent during the third phase of repayments (source in Hungarian)

State Secretary Lázár announces the Paks agreement.

State Secretary Lázár announces the agreement.

After announcing the signing of the agreement, State Secretary in Charge of the Prime Ministry János Lázár called it “the deal of the century” (see source A and B in Hungarian).

The Orbán government did not call a tender for bids to build the reactors, claiming that this was not necessary because the pact represented an extension of the 1966 Soviet-Hungarian agreement calling for construction of the original reactors at the Paks Nuclear Power Plant, not a business deal (source in Hungarian).

Hungary’s National Assembly approved the agreement on February 6, 2014 by a vote of 256 to 29 with two abstentions, moving the vote up one week earlier than planned at the recommendation of the Fidesz caucus. Representatives from the Fidesz–Christian Democratic People’s Party alliance and the radical-nationalist Jobbik party voted in favor of the agreement, while representatives from the democratic-opposition parties voted against it (source in Hungarian).

The most powerful members of the government—Prime Minister Viktor Orbán, Deputy Prime Minister Zsolt Semjén, Minister of Justice and Public Administration Tibor Navracsics, State Secretary Lázár and National Economy Minister Mihály Varga—did not participate in the vote (source in Hungarian).

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LMP National Assembly representatives protest the Paks deal.

LMP National Assembly representatives protest the agreement.

There are very few people in Hungary who argue that the country does not need to build new reactors at the Paks Nuclear Power Plant. National Assembly representatives from all parties voted nearly unanimously in favor of a resolution to expand the plant during the final days of the Hungarian Socialist Party-led government of former Prime Minister Ferenc Gyurcsány on March 30, 2009 (source in Hungarian).

Among democratic opposition parties in Hungary’s current National Assembly, only the green party Politics Can Be Different (LMP) and its offshoot Dialogue for Hungary opposed the deal on the grounds that the government should invest on development of renewable-energy sources rather than expansion of nuclear-energy capacity.

LMP representatives blasted megaphones in the legislature’s session chamber to delay formal approval of the agreement to build the reactors (while Fidesz-KDNP representatives attempted to silence the devices by stuffing wads of paper and pouring glasses of water into them): the Hungarian Socialist Party and the Democratic Coalition rejected the agreement because they said that the government had concluded it unilaterally, without prior consultation with the National Assembly or the Hungarian people.

The Paks Nuclear Power Plant.

Orbán government officials claim that the deal with Russia to build new reactors at the Paks Nuclear Power Plant will increase Hungary’s energy security over the long term and provide the foundations for the government’s cuts in the cost of household electricity (source in Hungarian).

However, the government has classified as confidential until the year 2024, one year after the scheduled completion of the two new reactors, the reports containing the data and analysis upon which it based its decision to sign the agreement with Russia (source in Hungarian).

Many of the main consequences and possible drawbacks of the agreement are nevertheless clear:

Indebtedness to the State of Russia

The government of Hungary will be heavily indebted to the state of Russia for the next 32 years, until Prime Minister Orbán is well into his 80s. The opposition newspaper Népszabadság has estimated that the agreement will cost the government of Hungary an average of 300 billion forints per year during the 21-year repayment period (source in Hungarian), equivalent to just under 18 percent of the government’s total 2014 budgetary expenditures and just over 10 percent of Hungary’s 2012 GDP (source A and B in Hungarian).

Russian Influence over the Price of Electricity

The text of the agreement states that the “cost connected to generating electricity” at the new reactors “will be acceptable of to the Designated Russian Organization” (source in Hungarian). The agreement stipulates that the Russians will choose this state-controlled Designated Russian Organization [Orosz Kijelölt Szervezet] (text of agreement in Hungarian and Russian).

Cost Overruns

The cost overruns that have occurred in connection to all three nuclear power-plant expansions currently taking place in Europe suggest that the Orbán government’s estimated cost of 10-12 billion euros for construction of the two new reactors at the Paks Nuclear Power Plant may be much lower than the actual cost of the project.

The estimated cost of a new reactor under construction at the Olkiluoto Nuclear Power Plant in Finland has risen from an original 3 billion euros to 8.5 billion euros (source in English). The estimated cost of a new reactor being built at the Flamanville Nuclear Power Plant in France has risen from an original 3.3 billion euros to 8.5 billion euros (source in French). The estimated cost of two new reactors under construction at the Mochovce Nuclear Power Plant in Slovakia has risen from an original 1.6 billion euros to 3.7 billion euros (source in English). Former Orbán government.

Deputy State Secretary in Charge of Energy Affairs Attila Holoda believes that the actual cost of building the two new reactors at the Paks Nuclear Power Plant could be up 20 billion euros (source in Hungarian).

The interstate agreement between Russia and Hungary contains no reference to this issue of which country will pay for possible cost overruns. State Secretary Lázár said during his announcement of the agreement on January 14 that the governments of the two countries would share the burden of paying for any excess costs connected to construction of the reactors. In response to a question about stipulated guarantees that the Russian government would help pay for any cost overruns, Lázár said that “We demanded legal guarantees and we will receive them. We are not even considering relinquishing anything from the Hungarian position,” though offered no specific proof that such guarantees existed (source in Hungarian).

Conformity with European Union Tender Regulations

The sole contender: Rosatom headquarters in Moscow.

The European Union may challenge the Orbán government’s claim that the agreement is not subject to EU tender regulations because it represents an extension of the 1966 pact between “The Revolutionary Worker-Peasant Government of the Hungarian People’s Republic and the Union of Soviet Socialist Republics” to build the original reactors at the Paks Nuclear Power Plant.

Evidence suggests that the government was, in fact, planning to call such a tender until at least the second half of 2013. On June 4, 2013, National Development Minister Mrs. László Németh announced that the government would issue a tender for the construction of the new reactors at the plant before the end of the year (source in Hungarian).

Evidence also suggests that several western companies were interested in submitting bids in a possible tender. On June 5, 2012, CEO István Hamvas of plant operator Paks Nuclear Power told the Hungarian News Agency MTI that “organizing the tender is an extremely important task, which must by all means be issued so that we can choose the contractor that will build the reactor in Paks.” Hamvas said that he expected five companies, including Rosatom, the U.S. company Westinghouse, the French company Areva as well as companies from Japan and Korea, to submit bids in the tender (source in Hungarian). A spokesman for Areva told the British news agency Reuters that the company was interested in participating in the expansion of the Paks Nuclear Power Plant (source in English).

The spokeswomen for European Commissioner for Energy Günther Oettinger and European Commissioner for Internal Market and Services Michel Barnier both said that European Union specialists were examining the Hungarian-Russian agreement to determine if EU regulations would have required that the government of Hungary call a tender for construction of the new reactors (source A and B in Hungarian).

Constitutionality

The Fundamental Law that came into effect on January 1, 2012 prohibits the National Assembly from adopting a government budget the raises state debt to over half of gross domestic product or, in the event that debt is already over half of GDP, from adopting a government budget that does not reduce state debt in proportion to gross domestic product.

Hungary’s state debt was just below 80 percent of gross domestic product in 2013, thus all Hungarian governments for the foreseeable future will be constitutionally obligated to adopt budgets that reduce debt in proportion to GDP (source in English).

The Orbán government has not said how repayment of the cost of building the reactors beginning in 2025 can be achieved without violating this constitutional stipulation. In response to a question regarding this issue, State Secretary Lázár said “When will this situation arise? We are not yet receiving the loans and when we do it will just be gradual. . . . We will pace the drawing down of loans for the investment, paying attention to preserve the long-term declining trend of the debt, thus conforming to the constitutional regulations” (source in Hungarian). Lázár did not provide further details regarding how a future government could stagger the repayment of 10 billion euros in loans plus interest over a period of 21 years without raising debt.

Conclusion

The Orbán government’s decision to have Rosatom build new reactors at the Paks Nuclear Power plant with at least 10 billion euros in loans from Russia has in political terms moved Hungary closer to Moscow and farther from Brussels. The government concluded the agreement with Rosatom without offering western companies the chance to submit bids to build the reactors. Nor will it make public the background studies and analysis upon which it based its decision to select the Russian state-owned company public until after the scheduled completion of the investment. The Fidesz National Assembly caucus furthermore stifled all potential parliamentary debate on the issue by moving voting on the agreement up one week earlier than scheduled.

Foreign Minister János Martonyi of Hungary told Foreign Minister Frank-Walter Steinmeier of Germany that the agreement was not based on geopolitical considerations, stating that “It is out of the question that with this Hungary is turning toward Russia” (source in Hungarian). However, the lack of transparency, openness and meaningful debate that have surrounded the pact indicate that the Orbán government is attempting to obscure evidence that it is, in fact, the natural culmination of four years of conflict with the European Union, the International Monetary Fund and the West in general and simultaneous rapprochement with Russia, China and other semi- or fully authoritarian states.

Perhaps State Secretary Lázár’s post-agreement characterization of Russian-Hungarian relations as “an increasingly smooth marriage of convenience that is offering greater and greater pleasure to both parties” (source in Hungarian) most accurately describes the emotional impulses that prompted Prime Minister Orbán to look toward Russia rather than the West in his search for construction and financing of the new reactors at the Paks Nuclear Power Plant—impulses that will almost certainly cause him to move Hungary farther into the anti-democratic Eastern political orbit during his next term in office beginning this spring.

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An Archconservative Speaks Out

January 28, 2014 By Orange Files in Lukacs, Paks Nuclear Power Plant, Russia Leave a comment

Prime Minister Orbán and John Lukacs looking over Budapest from Castle Hill in May 2013.

The opposition newspaper Népszabadság recently (January 25) published the following letter from the deeply conservative Hungarian-born U.S. historian John Lukacs regarding the January 14 interstate agreement between Hungary and Russia to have Russian state-owned company Rosatom build two new reactors at the Paks Nuclear Power Plant in south-central Hungary with 10 billion euros in Russian financing (source in Hungarian; see also: Deal of the Century):

Paks Vobiscum? No: Pax Nobis!

It has been almost 67 years since I left my native land. Since then the fate of my country and my nation has often grasped and wrenched my heart, though I never did deal with or write about Hungarian politics. Nor would this be proper now at the age of 90. But something nevertheless prompts me to do so. At least I spent at least two long winter nights thinking about it.

The Russian-Hungarian Paks agreement has tempted me.

I do not receive any Hungarian newspapers. And Hungarian periodicals only rarely. I click on Népszabadság for one or two minutes every morning. To my knowledge many Hungarians still read it to this day. It is for this reason that I am sending these lines here. Maybe they will reach a couple of hundred readers.

The present prime minister has honored me with his attention and friendship for years. However, I now consider it to be my obligation to steer my opinion in his direction with these lines. I have been aware of inclinations in his world outlook for more than 20 years now. I see that he felt a certain aversion toward the so-called “West,” western Europe and England, even before 1989.

Now he has reached a boundary line. I do not agree with those who speak and speculate about the economic consequences of the Paks agreement. Will electricity be cheaper or more expensive when the investment is completed in ten years (if ever)? My dear Hungarians, we cannot know the answer to this, but even if we could know the answer, it would be irrelevant. It is not worth the underside of a dog’s tail. The essence and fate of a country is not an economic detail. The essence of a country determines who we are and where we belong.

History hardly ever repeats itself. And that of the nation only rarely and to a smaller degree. And the character of a person changes the least. This will be perhaps the most profound problem facing the Hungarian people in the future. It is not merely a question of the insufficient degree of self-confidence among Hungarians. (Though this as well!) But one of who we are, where we belong, where we should belong?

Our great Saint Stephen was not only a singular saint, but a great founding father as well. More than one-thousand years ago, when the immense Greek Orthodox Byzantine Empire nearly embraced the Carpathians. If Stephen had chosen the path of accommodation with this empire, it would have entailed countless short-term benefits for him. But he did not do this: he chose Roman Christianity, a Papal emissary, a western wife, “Europe” (though this term had not yet come into existence). This choice formed the Hungarian Christian faith and character over a period of one-thousand years. Our eternal gratitude for this!

Western countries have often done little or nothing for us. But nevertheless. When the leaders of the Hungarians occasionally chose the “East,” this nearly always proved to be catastrophic. The consequence and essence of the tyranny that trampled Hungary under foot in the recent past was not communism, but the Russian occupation. At the end of the horrible Second World War the great Churchill, who already knew that the Russians would occupy all of Hungary, again told Roosevelt (unfortunately in vain) that Hungary was part of Central, not Eastern Europe. The Hungarian multitudes rejected the East in 1956 and 1989 as well.

What kind of reward could we have expected from a greater Russian empire? Nothing. Széchenyi and Kossuth foresaw this. One must recognize and respect the Russians as our distant relatives, the wise Finns do. But we do not belong to the Russians. Accommodation to them must never form the central element of our endeavors. We honor their achievements, their great artists. However, the breath of the Hungarian spirit, the Hungarian intellect, Hungarian art and learning is western. Not Russian, and not even American. In spite of their greatness, it is not Tolstoy or Dostoyevsky who speak to us, but Dante, Shakespeare and Pascal, Goethe and Tocqueville. The West has often been our cross, but we must bear it, because it is our guiding light as well. We esteem our great Russian neighbors, but we must not accommodate ourselves to them, must not fawn upon them, because this could become a heavy burden for a long time and turn to the detriment of the Hungarians.

Since 1989 we have been responsible for everything we have chosen, done and thought. The Hungarian character and spirit cannot be eastern. Pax Vobiscum! These are the closing words to the old Latin mass: Peace be with you! But now Pax Nobis! Let peace be ours!

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Lukacs has long been among Prime Minister Viktor Orbán’s most favored Hungarian academics. The Hungarian government awarded Lukacs the Hungarian Corvin Chain in 2001, the year the first Orbán administration revived this Horthy-era order of merit recognizing those who have made outstanding contributions to Hungarian science, art and literature. In May 2013, Lukacs was among six recipients of the award invited to an honorary dinner with Prime Minister Orbán, President János Áder and Prime Ministry chief János Lázár at the presidential Sándor Palace in Budapest.

Lukacs’s explicit criticism from his vantage point in the United States of the Hungarian-Russian agreement to expand the Paks Nulcear Power Plant and Prime Minister Orbán’s pro-Russian, pro-East policies suggests that conservative Orbán supporters in Hungary may harbor similar sentiments, though are refraining from expressing them in order to avoid creating a rift among Fidesz voters just ten weeks before national elections.

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Back to the Future

January 25, 2014 By Orange Files in Bencsik, Peace March, Russia, United States Leave a comment

Demokrata editor-in-chief speaking at previous pro-government Peace March.

Demokrata editor-in-chief András Bencsik.

In the most recent issue of the nationalist weekly Magyar Demokrata, editor-in-chief András Bencsik published an appeal for the organization of another pro-government Peace March (source in Hungarian). Below is an Orange Files translation of Bencsik’s appeal:

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. . . As if a change of roles has taken place, as if America has begun to take on the role of the Soviet Union as it came to its inglorious end. Rather than an ambassador (1), it [America] is sending an arrogantly confident governor, instructor, commissar to the subjugated country, whose task will not be to transmit the petty thoughts of the enslaved people to the imperial capital, but to use all its weight to force this primitive people to adopt the prescribed lifestyle: “checks, balances and marijuana.”

Russia is the home of tolerance compared to this. Everything bad that could be said about the Soviet-Russians has been said over the past decades. And? They just signed the deal of the century with us regarding the expansion of the Paks Nuclear Power Plant, thanks to which Hungary’s energy dependence will end for a half century (2). President Putin did not voice even a word of objection to Hungary’s domestic political situation, although Russia is still the world’s second greatest power and in light of the visible trends it could easily become number one again within a century.

Use of the system of checks and balances is, as a matter of fact, part of Hungarian thought. The Princes of Transylvania last used it magnificently between the Austrian and Turkish great powers. It looks like it is no different today: Hungary’s freedom of movement will again increase with the strengthening Russian connection. Of course this doesn’t please everybody, Izsák Schulhof (3) lamented the expulsion of the Turkish occupiers from Buda because for him it was better with them around at the time.

The balancing ability of Hungarian politics is important to us. Present indications suggest that we must soon hold another Peace March in support of this. March 29, the Saturday before the weekend of elections, seems to be an ideal time.

This would be the sixth Peace March since Bencsik, fellow pro-government journalist Zsolt Bayer and businessman Gábor Széles organized the first such pro-Orbán demonstration in January 2012. The appeal offers an insight into the widespread sympathy among Fidesz supporters toward Putin’s Russia and its highly centralized political and economic systems.

Notes

1-Reference to United States Ambassador-designate to Hungary Colleen Bell.

2-Hungary and Russia signed an inter-state agreement on January 14 to have Russian state-owned company Rosatom build two new reactors at the Paks Nuclear Power Plant in south-central Hungary with 10 billion euros in Russian financing.

3-Rabbi Isaac Schulhof, author of the Buda Chronicle recounting the expulsion of the Ottoman Turks from Budapest in 1686.

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An Archconservative Speaks Out

Back to the Future