Hungary, Russia reach natural gas supply deal

Feb 17, 2015, 3:53 PM EST
Russian President Vladimir Putin (L) and Hungarian Prime Minister Viktor Orban converse during a signing ceremony of several agreements between the two countries at Parliament on February 17, 2015 in Budapest, Hungary.
Sean Gallup/Getty Images

Hungary’s prime minister announced on Tuesday that his country had reached a political deal with Russia for future natural gas supplies. According to A.P., Prime Minister Viktor Orban said Tuesday after his meeting with Putin that only "technical" details needed to be finalized on the deal which will replace a 20-year contract expiring in December. Orban said "Hungary needs Russia" and it was important for Russia to be open to Hungarian products, which have been affected by Russia's ban on EU imports - a countermeasure to EU sanctions against Russia because of the Ukraine crisis.
 
The Washington Post reported on Monday that Moscow appears to be lurching toward a new tug of war with the West for allies in strategic quarters of Europe. In recent weeks, Russia has wooed the new Greek government, dangling the prospect of aid should near-bankrupt Athens reach an impasse with its Western lenders. To Cyprus — another financially troubled member of the European Union — Russia is offering a new economic cooperation deal set to be signed this month.
 
All that pales in comparison with Hungary. In this former Soviet satellite, now a member of the European Union, the Russians are offering to invest billions to win back loyalty and leverage. To an extent, they appear to be succeeding, with the Hungarians seeming to offer Moscow a string of political and diplomatic favors in return — but also pushing hard for a favorable price on Russian natural gas. Putin was preceded in September by Alexei Miller, chief executive of the Russian energy giant Gazprom. Only a few days later, Hungary stopped reselling the gas it buys from Russia to the desperate government in Ukraine. Officially, Budapest said it simply decided the time was right to restock its own energy reserves. But Western diplomats and critics in Budapest made a different judgment: Orban was doing Moscow’s bidding, putting pressure on Ukraine’s energy supplies during a critical juncture in talks with Moscow. In return, Hungary, like other European countries, is pressing to renegotiate its contract with Gazprom in light of the dramatic fall in world prices for natural gas.
 
Putin's visit to Hungary is of a piece with that diplomatic offensive, experts say, and its political significance for Moscow far outweighs the projected deals over natural gas as well as a 10-billion-euro expansion of Hungary's Soviet-built nuclear power plant, notes the Christian Science Monitor. "In the present atmosphere, it's very important for Russia to demonstrate that attempts to isolate us are not working," says Fyodor Lukyanov, editor of Russia in Global Affairs, a leading Moscow-based foreign policy journal. Hungary, which is 70 percent dependent on Russian gas delivered through Ukraine, is one of several southern European countries that were blindsided by Putin's December decision to cancel the $45 billion South Stream pipeline, which would have bypassed Ukraine to deliver Russian gas to the heart of Europe. In an interview with Hungary Today, Foreign Minister Péter Szijjártó said the uncertainty of future gas deliveries make it imperative for Budapest to consult with Moscow. He also complained that Hungary has suffered badly from the sanctions standoff with Russia, especially Moscow's tit-for-tat ban on EU food products. Prime Minister Orban, ironically a former anti-Soviet activist, has made waves in Europe for allegedly  trying to install a Putinesque "illiberal democracy" in Hungary.
 
 
 

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