
Recent decisions show that Hungary's EU and NATO partners are fed up with Budapest’s boycott of common policies, anti-democratic drifts and its content playing into Russia’s hands. Although he claims that Russia is a viable alternative to the West, Vladimir Putin has few options to help his friend, Viktor Orban.
Political and economic pressure piles up on Orban to stop blocking EU financial assistance for Ukraine
Nine minutes. That's all it took to unlock 50 billion EUR worth of EU aid for Ukraine. 26 states from the community bloc banded together to stand up to the Hungarian Prime Minister, Viktor Orban, convincing him with hard arguments that opposition is no longer an option. On the sidelines of the European Council meeting, the other leaders had allegedly resorted to threatening to activate Article 7 in the EU Treaty, journalists accredited in Brussels say, which would have led to the suspension of Hungary's right to vote in the European Council. The procedure was already started at the request of the European Parliament as early as 2018, when MEPs were mainly concerned with judicial independence, freedom of expression, corruption, minority rights and the situation of migrants and refugees in Hungary. Despite all that, Hungary has so far eluded sanctions.
The activation of Article 7 was not the only threat Budapest was faced with. The loss of political rights, such as the right to vote, may have less impact than the loss of EU funding. In the 18 years of European Union membership, Hungary has tripled its GDP thanks to being part of the community bloc. Prior to the February 1 EU summit, The Financial Times reported on an EU strategy designed to explicitly target Hungary's economic weaknesses, endanger its currency and cause a loss of confidence if Budapest refuses to lift its veto against financial assistance for Kyiv.
Before this emergency EU summit, Orban was very loudly claiming he would block the financial aid package for Ukraine, unless a series of conditions were met: the financing package would be modest in size, outside the common EU budget and over a period of one year instead of four.
EU leaders’ “threats”, however, made Orban back down. In an interview to the public radio, Victor Orban told his compatriots that he didn’t want to risk losing the EU funds earmarked for Budapest from the common coffers of the community bloc. What else was he supposed to say, after at the end of last year he had filled Budapest with posters that read: “Stop dancing to their tune!” The posters also featured the head of the European Commission, Ursula von Der Leyen.
At the end of last year, the European Commission disbursed approximately 10 billion EUR, accounting for a third of cohesion funds allotted to Hungary. The funds had been frozen due to rule of law irregularities. This means that the Hungarian government will be able to apply for reimbursement of the said amount in order to finance development projects across the country. The remaining 20 billion EUR worth of cohesion funds allotted to Hungary will remain frozen.
All things considered, Orban has lost. Like his friend Putin, he thought he would succeed in dividing the EU bloc, or at least postponing the financial package for Ukraine. What he managed to achieve instead was an impenetrable shield of the other 26 European states. And, most importantly, the decision paves the way for a different kind of policy-making at EU level.
After being forced to accept funding for Ukraine, Orban is trying to secure promises from the West by delaying Sweden's NATO accession
Orban's “Machiavellian shenanigans” did not end at the EU summit. The summit meeting in Brussels did not end well either, as Budapest “served” yet another hot potato. At the end of endless discussions with the Swedish delegation, Hungary promised to greenlight Sweden's NATO accession. However, on February 5, when the unicameral parliament in Budapest convened in an extraordinary sitting at the request of the opposition in order to ratify Sweden’s accession to NATO, FIDESZ, Orban's ruling party, boycotted the meeting. FIDESZ MPs simply did not attend! The US envoy, ambassadors from other NATO allies including Poland, Denmark and Slovakia were all there. Everyone witnessed this show of force in Budapest. Without the proper quorum, the vote was postponed. This is the last ace Hungary has up its sleeve, being the only NATO country that has not ratified Sweden's accession. FIDESZ MPs later said they wanted Swedish Prime Minister Ulf Kristersson to visit the Hungarian capital before ratifying Sweden's accession. They also mentioned that the accession could be voted on at the next normal session of Parliament, meaning at the end of February, when Parliament resumes after the recess. FIDESZ MPs basically echoed Orban’s ideas: the Hungarian Prime Minister had previously said he was expecting Kristersson to visit Budapest for “negotiations”. The Swedish official cut him short, clearly expressing willingness to have talks with Orban, but ruling out any possibility of negotiating his country’s NATO accession.
Orban's move has also angered the Americans, who have warned him that he risks damaging his relationship with Washington. On the very day of the extraordinary summit in Brussels, Democratic Senators expressed their deep concern with the direction the current Hungarian government has chosen. Ben Cardin, a member of the US Senate Foreign Relations Committee, hinted that the Visa Waiver program could become a dream for Hungary.
“The Biden administration should examine whether Hungary is truly a reliable partner worthy of participating in the Visa Waiver Program — and, given the level of local corruption, whether it is appropriate to apply sanctions under the Magnitsky Act”, Cardin said.
It is clear that, as far as Hungary is concerned, both sides of the Atlantic have run out of patience. And the idea that Hungary’s relationship with Russia will pay off economic and financial dividends turned out to be completely uninspired.
Orban thought a good relationship with Russia would spell economic benefits, but Putin can't help him
During his time in opposition, Viktor Orban criticized the socialists in power for supporting the Russian South Stream project. After he became Hungary's Prime Minister again in 2012, his attitude towards Moscow suddenly changed. In 2011, Orban announced the “Eastward-looking Strategy”, meant to open Hungary to new markets for the country's products. In this context, Orban suddenly became a strong advocate of the South Stream project, to the point that in 2014 he accused Brussels that it sabotaged the pipeline construction plan by abandoning it. This was against the backdrop of a sharp embitterment of relations between Russia and Western states after Moscow attacked Ukraine earlier that year, annexing Crimea and supporting the breakaway of parts of Donbas.
Also in 2014, Budapest signed an agreement with Russia regarding the expansion of the only nuclear power plant in Hungary, the one at Paks. The 12.5 billion USD project is being implemented by Russia's state-owned Rosatom, and 80% is financed by a 10 billion USD loan from Russia, approved in 2023.
2014 is also the year when Orban launched his theory of “illiberal democracies”, giving Russia as a successful example. Since then, Viktor Orban's anti-democratic drifts have intensified, with Budapest being compared more and more often to Putin's regime. The independent media and civil society became prime targets. Orban's rhetoric expanded to include theses specific to the false narratives marketed by Russia – the danger of migrants, George Soros, the Brussels bureaucracy, etc.
Right now, Hungary has remained one of Russia's main energy trade partners in Europe, but the current partnership puts Budapest at a disadvantage after Orban concluded a long-term gas deal with the Russians, as Putin wanted. In September 2021, Orban struck a 15-year deal with Putin's Gazprom, with the Russian giant expected to deliver 4.5 billion cubic meters of gas annually. The apparently spelled disaster for Hungary, which ended up paying 30% more for Russian gas than Europeans, because gas prices observe the Dutch stock exchange quotations with a two-month gap. With Hungary being over 50% reliant on Russian gas, the costs are huge, and the effects of bad business are falling on ordinary Hungarians.
Even though end-of-year fell from 7.9% in November to 5.5% in December, the 2023 recession left its mark. According to an analysis of the European Union, the budget deficit will remain high.
As I previously wrote for Veridica, without European funding and with decreasing support from the Russians, Viktor Orban will also face increasing internal pressure. Even though he still enjoys a comfortable majority in parliament, Viktor Orban's “balloon” risks bursting before it ever takes flight. Sooner or later, the soaring living costs in Hungary will bring people on the streets, especially as a potential increase in people’s revenues is nowhere in sight.