Russian-Hungarian agreement concerning atomic energy: What will Putin and Orbán sign tomorrow?

It was again Magyar Nemzet that first came out with a short news item heralding Viktor Orbán’s forthcoming “diplomatic offensive.” The paper’s guess was that the move was in some way connected to the election campaign. The prime minister is supposed to visit Russia, China, and several other, mostly Arab countries.

I didn’t find Magyar Nemzet‘s explanation for this diplomatic onslaught terribly convincing because I’m sure Viktor Orbán still remembers his mistake during the election campaign in 2002 when he decided not to dirty his hands with campaigning but instead showed himself as the real statesman hard at work. And he lost the election.

The pro-government paper did mention, with reference to his Russian trip tomorrow, that “Viktor Orbán may sign an agreement about the continuation of the existing cooperation between the two countries concerning atomic energy matters.” It added that “the expansion of the Paks nuclear power plant” might also be discussed.

Népszabadság learned more about the plans from Fidesz sources. The paper reminded its readers of János Lázár’s announcement about the “advanced negotiations” concerning the enlargement of Paks’s capacity, which would double the output of the power plant. The government claims that this addition to the existing facilities would lower utility prices. The opponents of the plan claim the opposite: prices would rise because of the high cost of expanding Paks. Indeed, this particular investment will be costly. Experts talk about 3-4 trillion forints, which naturally Hungary doesn’t have. But that’s not the only problem. In her present financial situation, Hungary can’t even borrow that much money because it would upset the precarious balance the government achieved as far as the deficit is concerned. But it seems that thanks to the “good offices” of the Rosatom State Atomic Energy Corporation the Hungarian partner may be able to pay the cost of the investment on the “installment plan.” Originally, even Orbán was talking about an international tender, but none of the other companies that are in the atomic power plant business was ready to be so generous. Of course, this generosity has its price which might take several forms: joint ownership, profit sharing, and various other business arrangements.

Paks Aromic Power Plant /www.sff.hu

Paks Atomic Power Plant /www.sff.hu

Not surprisingly it was the politicians of Párbeszéd Magyarországért (PM/Dialogue for Hungary) who were the first to raise their voices against the plan because these politicians are committed to the idea of green energy. They objected, with good reason, to the secrecy with which these negotiations were conducted. They raised objections to making such a momentous and controversial decision without any public discussion or any consultation with independent experts. Why the hurry? Is Viktor Orbán afraid that he might not win the election and does he therefore want to push the decision through his parliamentary voting machine prior to April or May? Benedek Jávor, co-chair of PM, declared that he and his party consider any agreement arrived at in Moscow without parliamentary authorization null and void. Such a momentous decision cannot be the private domain of the prime minister. It is not only a very expensive undertaking, but the planned arrangement also puts Hungary at the mercy of Putin’s Russia.

The government’s answer to the critics was lame. András Giró-Szász, the government spokesman, declared that it would have been impolite to refuse an invitation from Putin. This explanation is utterly ridiculous. As if Putin one morning woke up, had a burning desire to meet Viktor Orbán again, and out of the blue dropped an invitation in his mailbox. Giró-Szász, perhaps realizing the absurdity of his first claim, added that “after all, it is very important to take a look at the past year’s economic results.” As if they had anything to do with the matter at hand.

Today we learned that Gordon Bajnai (Együtt-2014) and Benedek Jávor (PM) jointly wrote an open letter to Viktor Orbán in which they pointed out that the expansion of Paks would determine the country’s energy policies for the next sixty years and therefore such a decision cannot be sanctioned without a public debate and without parliamentary authorization. They demanded immediate information about any negotiations and decisions.

A couple of hours later Bajnai and Jávor got an answer: “yes, there will be a bilateral agreement” signed in Moscow. The Government Information Center pointed out that the government has been studying the possibilities of the use of atomic energy. A year ago Vladimir Putin and Viktor Orbán discussed questions of cooperation at the time of Orbán’s visit to Moscow. An agreement was reached in December. After the prime minister’s return from Moscow the government will inform the public about the details.

Thus, we don’t know more about the agreement than before. Obviously Viktor Orbán can make the decision, whatever that decision is, alone. The “people” this government talks so much about have no business questioning the wise man’s decision. He knows what is good for the people. Another case of Hungarian democracy at work.

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Mr. Paul
Guest

“Népszabadság learned more about the plans from Fidesz sources. ”

Do we believe that such sources exist? Earlier I got the impression from the blog that it is very unlikely that even the MSZP leaks to the press (on the discussion about the likeliness of the Róna and Surányi PM nomination). If all of MSZP, Együtt etc does not leak why would Fidesz people leak to out of all the papers, Népszabadság? What motivation would they have for secretly talking to the paper they see as part of the “enemy”?

petofi
Guest

“…they pointed out that the expansion of Paks would determine the country’s energy policies for the next sixty years..”

And this momentous decision is to be made…alone, and in secrecy, by the same man who, on no good reason that we can fathom, released the Azeri axe-wielder.

Moreover, it would be interesting to hear how Orban the Viktor would resolve the seeming contradiction of his past statement that Hungary…”ought not to be another barrack in Russia”, with this new agreement which will put the country at the mercy of Russia for many years to come.

Have any of the vaunted reporters of Hungary bothered to ask Orban that question?

tappanch
Guest

Since Hungary does not need more electric power, I surmise that Orban expects that the “greens” of Europe, like Germany will be longing for more electricity, and Hungary will satisfy their needs from nuclear energy.

What if the new industries do not require so much energy, and nobody wants the Hungarian surplus?

In this case, Orban will have just added another 25% of the GDP (calculate with 7.5 trillion forints) to the national debt by his miscalculation!

Andy -- Putin and the Orban Clan
Guest
The reason for the rush to make this decision before the elctions is multi-pronged and politically motivated. Firstly, Orban likes to appear in firm and full control. He is in that position today. He wants to be appreciated as a brother – a full fledged member of the Great Dictators’ Elite Association. Not only for the sake of negotiations (the latter is not one of his stronger aspects) but as a means of fully enjoying the pinnacle of power he has reached. Achieveing goals in appearance is of utmost importance to him. Secondly Orbán, by nature, is unsure of hismelf, (dont let him fool you) and he does not yet know how he’s going to fare after the elections, escpecially whether or not he will be able to retain his 2/3 parliamentary commanding position. Thirdly he wants to put the badge of the new Nuclear Power Plant on his lapel, which will certainly assure his mark for 60+ more years, even outlasting his own lifetime. Fourthly, preceding election time, prime ministers like to have cozy meetings with the most powerful leaders. Its a sign that he belongs withinin the top cirlce of leaders and wields money and influence. Its also… Read more »
Focistafrizuras
Guest
Some info on the Czech power plant which has also been in preparation: http://www.forbes.com/sites/michaelkanellos/2013/12/06/czech-project-shows-why-nuclear-power-is-fading-away/ Electricity prices must — under the current investment plans (which are surely set to double by completion) — double. Until completion there is surely at least 10-15 years until which time solar power will be much-much cheaper. And note that these financial calculations never, ever include the cost of dismantling the power plant, if it is possible at all. The waste will have to be stored until eternity which is not calculated either (and a storage place built, even though under previous agreements the Russians took away the waste back to Russia) and what happens with the actual power plant buildings? Anyway, this Orban-Putin agreement, is a private agreement worth some 3,000-6,000 billion forints is the crime of the century, if not of the millenium. Hungary will be extra indebted to Russia to the tune of 6,000 bn forints by the end, because take-or-pay (you pay regardless of whether you take over the electricity or not, whether you need it or not) paying for decades such high price for unwanted electricity is just as much a debt service as paying interest on treasury bonds, only in… Read more »
Don't Count on Me Orban
Guest
Don't Count on Me Orban

Crime of Human History?

petofi
Guest

Let me list a few things and see if a picture emerges:

–MOL is run by Gazprom
–MOL wanted to take over INA in Croatia and allegedly paid a bribe of 10 million euros to Sanader
–When the CEO of MOL was called to appear in Croatia, Orban refused to allow him claiming that the government’s 25% share made MOL a “strategic industry” of the country
–a former KGB agent finds his true calling in life, first as a Gazprom executive and then as a banker in Hungary; he becomes (presto!) a billionaire and immediately moves to the sunny
confines of Felcsut to establish his residence
–Armenia, little more than a Russian proxy, must stand by as Orban releases the Azeri
axe specialist; in turn, Azerbaizan kills any possibility of providing oil to Russia’s main pipeline competitor (Azbucco), and also signs a multi-billion contract with Russia

–and the beat goes on…

petofi
Guest

Oh, and yes, this little anomaly:
OTP shows that most of its annual profit last year came from sister banks in Russia; but (shazam!) two of Russia’s largest banks immediately set up shop in Budapest!

(Students of Matolcsy perhaps…?)

L. Mihaly
Guest
Petöfi: Gazprom never ran MOL. It is common knowledge among those who follow MOL on the Budapest Stock Exchange that about 50% of the shares outstanding are held by ‘friendly’ investors, who hold such shares because MOL pays them. In other words, MOL, or rather MOL’s management anyway controlled 50% prior to Szurgut’s investment, as it still probably does in one way or another. Szurgut’s cca. 25% never was a real control issue but it could have escalated into a political issue between the respective governments plus Orban decided that he needed the shares to gain more effective control over MOL’s management and thereby over other parts of the Hungarian energy sector. For example, MOL had gas storage facilities and surprise-surprise MOL took the government’s offer and sold them to the Hungarian state. Was it worth it? We will never know (neither re MOL, nor re the state). Also Orban is now in a better position with respect to the long-term natural gas supply agreement which Orban now desperately wants to re-conclude. The problem is that there is no way Orban or his advisers can be smart about it. Nobody knows energy better than Russia does and nobody negotiates better… Read more »
Tyrker
Guest

444.hu has published a brilliant parody mocking energy(-policy)-related conspiracy:theories: http://444.hu/2014/01/13/energiamezok-magyarorszagon-ketto/

tappanch
Guest

Party list:
———-
MSzP 43
E14+PM 8
DK 6
LP 3

1.Mesterházy Attila, MSzP
2.Bajnai Gordon, E14
3 Gyurcsány Ferenc, DK
4 Fodor Gábor, LP
5.Szabó Tímea, PM

Individual districts:
———————–
MSzP 71
E14+Pm 22
DK 13, including Kuncze

Mr. Paul
Guest

Yes total MSZP dominance just as I predicted. As I pointed out earlier the biggest loser is Együtt 2014, which previously held 31 individual districts and had a party list expected to gain 10% of the votes or more. Now they only have 8 out of 60 on the party list and only 22 individual districts (of which they only had a few really winnables, now a lot of those are going to DK, such as district V. where Juhász was the candidate – they pumped a ton of money into his campaign already). Együtt suffered another blow today, with Klára Ungár declaring that their agreement with Együtt is now “null and void” because of the new developments.

Phiuk
Guest

“Együtt suffered another blow today, with Klára Ungár declaring that their agreement with Együtt is now “null and void” because of the new developments.”

Someone has a sense of humor here. Klara Ungar, right. Now I wouldn’t be in the place of Együtt.

btw given the new new election system, the figures seem to imply a current working assumption of 8-10% popularity (party list-wise) for Együtt, and 5-7% for DK. Which is more or less in line with polls, in other words, no assumption of any hidden reserves seems obvious, although I guess should the popularity prove to be bigger, the actual yields could increase under this plan.

Torgelle
Guest

Oh, and do not forget that Jobbik wholeheartedly supports not only building new nuclera plants (Jobbik supports the building of Bős-Nagymaros too), but especially that Paks II’ should be awarded to the Russians. The Russians have a pretty good working relationship with Jobbik, although this fact is not really advertised. I mean what’s no to like for Jobbik in Putin’s Russia, especially if the Russians are so generous fund raising-wise.

HiBoM
Guest

Not often I find myself in agreement with András Schiffer, but have to concur with him that this formation should be called “Együtt 2006”. I have no problem with Bajnai or Tímea Szabó, but anyone who thinks that nos 1, 3 and 4 on this list is going to attract the very people who voted them soundly out of office in 2010 needs a reality check.

Orbán’s reelection is guaranteed which is a tragedy.

Jano
Guest

What I’m interested the most is how did Fodor manage to whore himself to the fourth place. What on earth did he have to offer?

Now we’ll see if individual popularity of the parties add up. For all I know, all my previously enthusiastic Együtt 2014 supporter friends are announcing one after each other on Facebook that they are now members of the ‘without party’ category. Whether they will eventually vote back or not is a different question, but I wouldn’t be terribly surprised if they just stayed at home.

Paul
Guest

tappanch :
Party list:
———-
MSzP 43
E14+PM 8
DK 6
LP 3
1.Mesterházy Attila, MSzP
2.Bajnai Gordon, E14
3 Gyurcsány Ferenc, DK
4 Fodor Gábor, LP
5.Szabó Tímea, PM
Individual districts:
———————–
MSzP 71
E14+Pm 22
DK 13, including Kuncze

Interesting. Thanks tappanch.

Could you expand a little on this please? For instance, based on current opinion polls (and assuming the minor parties all get at least 5%), how many seats would the combined left get from the party list? And, do we know any more about who’s got what districts? If so, how many are reasonably safe seats for the left, and for which party?

Thanks in advance.

Paul
Guest

“They raised objections to making such a momentous and controversial decision without any public discussion or any consultation with independent experts.”

Much as I support this, it’s hardly going to make any difference. What Orbán wants, Parliament gives him. He is effectively President (in the real sense).

Ovidiu
Guest

Orban is moving eastwards.He has found inspiration in Putin’s conservatism, state-directed economics and authoritarianism.That’s the future in Orban’s opinion, and the past since it resembles Kadar’s period.

Putin is a good president!
Guest
Putin is a good president!

Eva S. Balogh :
@Jano, I’m also absolutely astonished about Fodor’s most likely undeserved success.

Eva,
Here start the president!
Watch from 12th min!

Putin is a good president!
Guest
Putin is a good president!

From the white marble rooms to the golden rooms…..Full Video: Vladimir Putin’s presidential inauguration ceremony in Kremlin

tappanch
Guest

Zdravstvujte tovarishchi – they did not change it to gospoda!

Soviet Union + Orthodox Church = Russia 🙂

Guest

While taking the oath of office, what was the document that Putin laid his hand on?

petofi
Guest

I watched Mesterhazy/Gyurcsany/Fordor on Olga. They were fine. I did, however, found it odd that Fodor kept re-iterating “Liberal” at every opportunity. Why? Couldn’t Bokros with his conservative party be invited to join the “Union Of Anti-Orban” forces? I don’t see why not. As well, I’d like to see Bekesi have some role here. The whole group should be together on stage, together, hammering home continually the idea that Orban will take the country out of the EU, and THAT, more than anything, will mean the end of an independent Hungary…

tappanch
Guest

@Gretchen

Konstitucija

tappanch
Guest

Atomic reactor arithmetic:

THe French are building a reactor in Finland. The original cost was 3.5 billion, the actual estimate now stands at 8 billion.

http://nuclear-news.net/2012/12/14/costs-of-finlands-olkiluoto-nuclear-reactor-go-up-yet-again/

Since the initial estimate for Paks 2 is 10-12 billion euros, it is safe to assume a final cost of 25 billion euros.

Paks 1 produces 0.1 billion in profit a year.

Paks 2 will have a planned life of 60 years, so it might give 6 billion euros of profit during its entire life.

Suppose Russia gives an interest-free loan save inflation.

Then Hungary’s net loss is 19 billion euros, i.e. 0.3 billion euros a year from 2024 to 2084.

spectator
Guest

Ovidiu :
Orban is moving eastwards.He has found inspiration in Putin’s conservatism, state-directed economics and authoritarianism.That’s the future in Orban’s opinion, and the past since it resembles Kadar’s period.

So far it sounds just wonderful, it’s the perfect place to him!
The problem is that he will come back.

Shouldn’t it happened, btw, that he gets the Parliamentary Approval prior to signing an agreement, or it applies only in democracies, so it wasn’t necessary in this case?

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