Orbán-Putin meeting: lots of symbolism, no major development

2019-10-30

Summary

The Russian president’s visit to Budapest on 30 October was the 7th high-level bilateral meeting between Putin and Orbán since the annexation of Crimea. The meeting ended without major announcements or agreements on the most important topics: a long-term gas contract and the re-negotiation of the Paks 2 contract. On the press conference following the meeting, Viktor Orbán even mentioned the trade imbalance between the two countries – also a sign of disappointment from the Hungarian side.  Side events such as the Eurasian Forum, however, were filled with markedly Eurasianist statements, repeated criticism of Ukraine for its handling of minority rights, and accusations of hypocrisy against the EU and its member states. On the Forum, Minister of Foreign Affairs and Trade Péter Szijjártó proudly announced Hungary’s veto of NATO ambassadors’ joint declaration on Ukraine (that has been passed since then). These statements immediately found their way into the Kremlin’s communications, and they are going to be immensely useful for President Putin to demonstrate to his domestic audience that Europe is fragmented and some member states warmly welcome Russian leaders and supporting their line. 

The bilateral meeting

Russian President Vladimir Putin’s delegation consisted of, among others, Minister of Foreign Affairs Sergei Lavrov, Minister for Industry and Trade Denis Manturov, Minister of Healthcare Veronika Skvortsova, Minister of Transport Yevgeny Dietrich, Lukoil CEO Vagit Alekperov, Rosneft CEO Nikolai Tokarev, Gazprom CEO Alexey Miller and Rosatom CEO Alexey Likhachev. This is an extraordinarily strong, energy-focused Russian lineup. Such a strong business team might potentially serve as a tool to project power.

 

The results of the meeting:

No announcements were made on the two most important topics of discussion: a long-term gas contract and the re-negotiation of the Paks 2 contract despite the well-articulated preliminary expectations of the Hungarian government to make a progress on these two issues. The meeting’s results clearly underperformed the Hungarian government’s expectations, which was diplomatically noted by Viktor Orbán on the press conference when he talked about the need to reduce the trade imbalance between the two countries (Hungary has a significant trade deficit with Russia). Apparently, the sides failed to agree on a renegotiated Paks 2 treaty, opinions diverged especially on debt repayment conditions, which is unfavorable to the Hungarian side, which has been actively lobbying for it.  The current terms are largely favoring Russia, and Moscow is interested in keeping this uncertainty, which gives the Kremlin more leverage in bilateral relations. Russia has ensured that no matter what happens, it cannot lose on the project.[1]  

In contrast, the delayed finalization of a long-term gas contract seems to be rather advantageous to Hungary, as Gazprom is in a very strong negotiation position, and the development on the Romanian-Exxon gas project can improve Hungary’s negotiating position.

Before the press conference, 8 agreements were signed on stage covering a wide range of topics; e.g., social security, oncology, sports and PE promotion, oil and space, but none of them is as significant as the above-mentioned energy issues. The most important agreement is on Lukoil’s compensation of MOL for delivering contaminated oil to the Hungarian company. While according to press information the parties agreed on a smaller compensation than the initial request, Hungarian Foreign Minister Szijjártó proudly noted that Hungary was the first country reaching an agreement with Russia on this issue.

Both leaders highlighted defending Christian communities worldwide as an issue bonding the two sides- at the same time, Putin admitted that this idea came from the Hungarian side initially.

Viktor Orbán expressed support for both the Nord Stream 2 and Turkish Stream projects, which would ensure the “energy security” of the country.

Side events: Homage to Eurasia

There were side events held on the same day as the high-level bilateral meeting. They clearly showed that the Orbán-regime wanted to please its Russian guests with messages that are music to the ears of the leaders of the Putin-regime. These gestures seem to be motivated by the Orbán government’s – so far rather unsuccessful – efforts to improve their negotiating position in the most important fields, including energy.  At the same time, these statements found their way into the Kremlin’s communications, which will clearly and understandably amplify the accusations that Hungary is serving Russian political interests.

  • A two-day-long Eurasian Forum was organized by the Hungarian Central Bank as a side event to the visit. At the Forum, Foreign Minister Péter Szijjártó proudly announced that “Hungary has vetoed the joint statement of NATO ambassadors on Ukraine”, justifying this move by claiming that “Hungary refuses to sacrifice the Transcarpathian Hungarian community on the altar of geopolitics”. It was later revealed that the vetoed text was only a draft, and later it was passed with an addendum requested by Hungary. Péter Szijjártó also said that cooperation between the East and West, with Hungary as a bridgehead, is in the country’s interest, adding that cooperation among Eurasian states is the best way to strengthen Europe and make it more competitive. He repeatedly accused other EU member states of hypocrisy. The foreign minister criticized them for raising their concerns about intensive Russian-Hungarian relations, while parallelly strengthening their own economic relations with Russia despite the sanctions.
  • On the same event, Hungarian Central Bank head György Matolcsy added that “After the Atlantic era, we face a new era, a Eurasian Era”. Matolcsy hailed the Eastern economic opening beyond Russia as well, claiming that “Hungary is leading the way in building relations between the East and West, and was the first European country to join the Belt and Road Initiative”. Moreover, he said that a Eurasian common currency might be created, probably a digital one tied to electricity and gold.
  • Additionally, there was a forum held for the leaders of Middle Eastern Christian communities. It was announced after the Szijjárto-Lavrov meeting in New York last month, when the sides argued that ”Hungary and Russia acknowledged that Christianity is the most persecuted religion on Earth (…) Foreign Minister Szijjártó added that Hungary is also proving that it is taking responsibility for all of the world’s Christian communities through action. At the same time, according to press information, leaders of Christian communities in danger on the territory of Turkey and parts of Syria threatened by Turkey were not invited to the meeting. 

Specificities of Russian-Hungarian relations

Although, naturally, it is not only PM Orbán who meets President Putin regularly and it is not only Hungary who does business with Russia, there are some peculiarities in the regular visits and bilateral relations between Moscow and Budapest.

  • Ideological connections. The general “Eastern Opening” strategy of the government is strongly embedded in a new push for Eurasia and a “doomsday of the West” narrative.
  • Russia serves as a role model. Orbán mentioned Russia, among other countries, in 2014 as a political and economic role model in his (in)famous “illiberalism” speech. Hungary is the only hybrid regime in the EU and it learns a lot from Russia in terms of power politics; e.g. how to deal with NGO-s and political opponents. It is highly symbolic that on the same day when Putin came to Budapest the offices of the opposition party Momentum were raided by tax authorities.
  • “Bridgehead” aspirations. Hungary is systemically building its Eastern relationships not only with Russia, but Turkey and China as well. Turkish President Erdogan will visit Budapest on 7 November. Orbán wants to raise the profile of Hungary as a “bridgehead” between the West and the East, but this leads to a situation where he undermines the unity of Western block on numerous occasions, for instance on Ukraine in NATO and the Turkish intervention in Syria in the EU.
  • Russian disinformation and anti-Western narratives are spread directly by the centralized pro-governmental media machinery, which has a strong impact on public opinion. Also, Hungarian governmental statements are extensively used in Russia for propaganda purposes. As anticipated, the Hungarian veto of the NATO ambassadors’ joint statement on Ukraine quickly made it into the headlines in Russian media. The story was used to reinforce anti-Ukrainian narratives. Russian media also highlighted Hungary’s support for the Turkish stream. In contrast, in Ukrainian media, the veto was described as a decision serving Russian interests (e.g., „Szijjártó bragged to the Russians with blocking the NATO resolution on Ukraine”).

 

[1] We appreciate András Deák György, senior research fellow and head of Research Group on Economics of Globalization at the Hungarian Academy of Sciences, for his insights.

 

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