Russia, Hungary, and the European Union: Paks documents released

It’s time to make sense of all the contradictory pieces of information that have reached the public in the last couple of days concerning the European Union’s attitude toward the Russian-Hungarian agreement on the Paks II nuclear power plant. The central question was whether the Orbán government notified Brussels, as it was obliged to, about the details of the agreement.

Energiaklub, a non-profit organization that deals with questions of energy and the environment, wrote a letter to the European Commission’s Directorate-General for Energy on February 17 asking for “access to the documentation related to the notification, under the Euratom Treaty, of the PAKS nuclear power in Hungary.” The answer was: “This investment project has not yet been notified to the Commission under Article 41 of the Euratom Treaty, and therefore at the moment no documents can be found in the Commission’s possession.” Critics of Viktor Orbán were only too happy to find that his administration seemed once again to have been caught lying. Soon enough, however, the relevant documentation was made public on the website of the prime minister’s office.

But before I talk about these newly released documents, which give us only a little more knowledge of the whole Paks affair than we had before, I would like to jot down a few dates by way of a road map.

I began collecting material on Paks and nuclear energy on October 18, 2013 when Viktor Orbán, then in India, boasted that Hungary would have extremely low energy prices in the not too distant future. He brought this up as an economic enticement for Indian investors. He also emphasized his commitment to nuclear energy.

Source: nuclear-news.net

Source: nuclear-news.net

Then for almost two months we heard nothing about nuclear energy. Finally János Lázár broached the subject and talked about advanced negotiations with Russia for Rosatom to construct two new reactors in Paks. What we didn’t know was that on December 10, 2013 János Lázár wrote a letter to Günther Oettinger, commissioner for energy. The released document is a cover letter to “the Draft International Agreement with the Russian Federation.” The letter also indicates that the Commission had been notified earlier, at its November 26, 2013 meeting, that “Hungary intends to enter into an international agreement with the government of the Russian Federation on the cooperation in peaceful use of nuclear energy.” Attached was the draft agreement “in accordance with Article 103 of the European Treaty.” The letter also reveals that talks between Brussels and Budapest about Hungary’s intention to sign such a treaty had taken place even before that date because Lázár assured the commissioner that they took “into consideration the comments obtained from the Commission.” The conversation between the commissioner and the Hungarian government is described as “open and constructive.” The confusion described above was most likely due to Energiaklub’s reference to Article 41 as opposed to relevant Article 103 of the Euratom Treaty.

A month later, on January 13, Viktor Orbán traveled to Moscow where Mrs. László Németh, minister of national development, on behalf of the Hungarian government, signed a document about which we still know very little. A couple of days later curious Hungarian journalists inquired from Günther Oettinger’s office what the European Commission thinks of the Russian-Hungarian agreement. They were told on January 15 that the Commission had not passed judgment on whether the lack of competitive bidding was an obstacle to the European Union’s blessing for the deal. However, they were told by the spokesman for Oettinger’s office that such a probe will take place some time in the future.

A good two weeks after his trip to Moscow, Orbán decided to write a letter to José Manuel Barroso, president of the European Commission, in which  he informed Barroso about “the recent developments with regards to nuclear energy cooperation between Hungary and the Russian Federation.” From the letter it becomes clear that there had been a response from Brussels to János Lázár’s December 10 cover letter attached to the copy of the draft treaty. According to Orbán, “the Commission raised no objection to the draft agreement” and therefore “my government signed the intergovernmental agreement on January 14, 2014.”

Orbán in this letter tried to downplay the fact that the job of building the nuclear power plant was given without any competitive bidding process. He added that “Rosatom, the Russian nuclear state authority, will be in charge of the implementation of the design and construction work. However, whenever any such work or services cannot be provided in-house, the Russian party will undertake an open and non-discriminatory tendering process.”

And finally, Orbán tried to reassure Barroso that the Russian-Hungarian deal actually serves European interests. “We believe that the long-term cooperation of Hungary with the Russian Federation in the field of nuclear power will contribute to strengthening the energy security of the EU as a whole.” It was at about this time that John Lukács, the conservative Hungarian-American historian who had fairly close ties with Viktor Orbán earlier, wrote him an open letter in which he warned about the deadly embrace of Putin’s Russia. I translated Lukács’s letter and Orbán’s rather impertinent reply.

By February 7 the Hungarian parliament, after five hours of debate, voted for a treaty about which the members knew practically nothing, even as opposition to the Russian-Hungarian deal was growing in the country. Most Hungarians didn’t want an extension to Paks, and they especially didn’t want to have the Russians building it. Foreign observers also envisaged a “Comecon reborn,” which looked quite possible after “realigning Ukraine as a satellite state under Vladimir Putin.” Nick Butler of the Financial Times emphasized Hungary’s “acceptance of Russian technology in its nuclear sector” and added that this huge investment will be financed by a Russian loan. He noted a reassertion of Russian power across the region and wrote that “the advance is not military but economic with energy issues to the fore.”

Barroso’s answer came on February 7. He referred to the progress made toward a common European energy policy. He attributed this success to the Commission’s “respect for Member States’ basic choices concerning their energy mix.” He added, however: “Member States’ commitment to comply fully with the rules of the Treaties and secondary legislation, in particular those governing the internal energy market, and to act in a spirit of coordination and full transparency, remains vital.” After the Commission examined the draft agreement it “raised no objections of principle to the agreement from the perspective of article 103.” But it seems that Orbán is still not entirely in the clear because “there are … other aspects of EU law to be observed, such as the rules on public procurement and state aid.”

Many people are convinced that the hidden state subsidies and the lack of public procurement are insuperable obstacles. Although who knows. Viktor Orbán always finds ways to come out on top.

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Istvan
Guest
Speaking of our Russian friends I just saw this come from Reuters: Feb 26 (Reuters) – President Vladimir Putin ordered an urgent drill to test the combat readiness of his armed forces across western Russia on Wednesday, flexing Moscow’s military muscle amid tension with the West over Ukraine. Russia said the exercises were not linked to events in Ukraine, where the ouster of a president who turned his back on the European Union and sought closer ties with Moscow has raised worries in the West over possibility of military intervention. Putin has ordered several such surprise drills in different Russian regions since he returned to the presidency in 2012, saying the military must be kept on its toes, but the crisis in the neighbouring nation gave them added geopolitical resonance. “In accordance with an order from the president of the Russian Federation, forces of the Western Military District were put on alert at 1400 (1000 GMT) today,” the Interfax news agency quoted Defence Minister Sergei Shoigu as saying. Shoigu said the training drills were not linked to events in Ukraine, and Deputy Defence Minister Anatoly Antonov said they had been previously planned. He said they would involve about 150,000 military… Read more »
Mr. Paul
Guest

Real nice, comprehensive summary of what we know so far about the negotiations. Really it is far above what was done in the Hungarian press.

Cink.hu, HVG.hu, and VS.hu all published false articles on this topic claiming the “Commission was not notified about Paks”. Vs.hu and HVG.hu have since retracted / published new articles with the correct information ,while cink.hu does not even bother to do anything about it. It goes to show the difference of mentality. HVG and Vs cares about their reliability, so they act fast and correct their mistake while cink is like: “as long as it brings good clicks and views, who cares”.

Ban Nuke Energy
Guest

Nuclear energy must be, and will be banned in the EU.
The Paks will be than a money losing white elephant.

An
Guest

@MrPaul: The articles were not false. For the project to get the go ahead, Hungary should have submitted a more detailed documentation of the project under Article 41. The Hungarian government didn’t submit that documentation, it only submitted a notification under article 103. The EU approved the submission under article 103, which practically meant that the EU said that it is OK for Hungary to have Rosatom as a partner. It doesn’t mean that the project itself got the full approval from the EU, as that depends on the specific details of the project (technical details, financing), which need to be submitted under article 41. The Hungarian government did not submit the required full documentation.

BonaFarmer
Guest
The way this is going to work, and this is crystal clear, is that the project will be financed via the central budget, while the sales revenue will go to the company. Any loss will be absorbed by the budget. A nuclear power station literally cannot go bankrupt. Since Paks 2 must be in full state ownership pursuant to Hungarian law (and if there is not already such a law then there will be; actually there is such a law re Paks 1 so there will be re Paks 2 to), it could not be sold in the event of bankruptcy. And since the project will stand there, there is no other option, it has to be operated. It is not like Malév, the liquidated Hungarian national carrier, whose assets were sold quickly and you would not even know the company ever existed. The gigantic power plant will just stand there. The EU cannot do anything, Hungary will finance it via the budget. I mean if the EU orders the company (Paks 2) to repay the state subsidies, the company will go bankrupt and will have to be bailed out by the only person legally allowed to do it: the… Read more »
tappanch
Guest

Different topic.

Is the Szekely flag not attested before 2004 a copy of the Crimean Tatar flag of 1917?

2004 Szekely flag:
comment image

1917 Crimean Tatar flag:
comment image

Mr. Paul
Guest

An :
@MrPaul: The articles were not false.

How do you know, An which articles I am even talking about? Did you read them? If you did not even read them how do you know they were not false?

tappanch
Guest

As a new campaign slogan, Fidesz intends to abolish the fixed fees in the utility bills.
(This is a fee you have to pay even at 0 consumption in Hungary)

http://nol.hu/gazdasag/egyelore_nem_torlik_az_alapdijat

A blog writer dug into the past, and the result is….

It was the first Orban government that introduced the fee!

http://vastagbor.blog.hu/2014/02/26/vajon_melyik_balliberalis_nemzetarulo_vezette_be_az_rezsialapdijat

El Chapito
Guest
What the EU will never realize is that Orban, Lázár, Martonyi, Rogán absolutely do not care about it. Really. It is by now clear that there can just no sanction be issued against any EU member and until the budget deficit is around 3% (even 4% this year, it always depends on current factors) Hungary is off the hook. Orban can do whatever the f**k he wants. The EU has exactly the same role as “the Jews” have. They can assist the government, but always, always only in a role which the government (Fidesz) assigns to them. The poor EU (Barroso, Reading et. al) always believes Orban’s, Martonyi’s friendliness, the approachability of the mid-level Hungarian fideszniks. Just like Mazsihisz, which will always be open, generous, and polite to have a “conversation”, “negotiation”, “cooperation” with Lázár. Hey, they are so open. What they are incapable of realizing is that nothing ever depends on them (neither on the EU nor on Mazsihisz) in Hungary. Never did. (Remember the “negotiations” with the IMF? Traveling back and forth, arguing about whether it was a “negotiation” or just an “appointment”? They played along, just as Orban dictated). Everything always depends on Orban alone, who assigns… Read more »
Kiev in Budapest?
Guest

El Chapito
February 26, 2014 at 8:39 pm | #9 Quote
“What the EU will never realize is that Orban, Lázár, Martonyi, Rogán absolutely do not care about it.”

Remember Kiev!

The golden bathroom will not survive the anger of the people.

Franky Four Fingers
Guest

look Kiev in Budapest?, people will vote soon and will vote for Fidesz because they love what they are having. OK? Utilities are cheap and life is so much fun, they can read about it all the time. And they rather live in this paradise than vote for the post-communists who would increase utility prices. ‘cos that is what communists love, see, increasing prices so that they could hurt poor Hungarians, we know that much. They did it in 1947, they would do it again in 2014. ÁVH would be established again. Are you not afraid that it will go after you? I tell you Körmös Bauer would return immediately. So, it seems to me you have a problem with democracy. The majority decides and if they adore Orban’s golden toilet seat, then we you to accept that too.

El Chapito
Guest
I apologize for writing so much, but. Even if the nuclear power plant is somehow legally freed from the 100% Hungarian state ownership obligation, who would purchase it in case of a bankruptcy/liquidation proceeding? Who would spend some billion EURs to own something when your revenues will entirely depend on the generosity of politics (as electricity prices will still be still set by Hungarian authorities)? When already all the foreign energy companies want to leave Hungary for good, never to return. Paks 2 will stay in state hands and as such will be forever financed from Hungarian taxpayer’s money. The EU better get used to it. And what if the electricity prices will be lower in 10-15 years, when it will be ready (because for example there will be other nuclear plants in neighboring countries which will produce electricity and which would have to get rid of it at any prices)? What if even after the sunk cost of 10-15bn Euros, Paks 2 could not be operated profitably, because the international market prices would be so low or because people will start to use their own solar cells installed on their apartments and so the electricity coming from Paks 2… Read more »
dengle
Guest
Re the Tarki polls. Tarki with the poll results published today changed its methodology, which explains the significantly different numbers compared to its previous findings. Tarki is still doing personal interviews (not by phone) but now the interviewees are asked to vote on a piece of paper similar to the real ballot and put it into an envelope, so that the pollster will not see his/her vote. With this change the results became similar to the Median figures, which actually show a stronger Fidesz than Tarki did prior to this poll. The results also shows that many of those who were undecided or would not tell their votes were actually Fidesz (and Jobbik) voters and not voters of the Left. This is not the result of the Simon-case, there just never have been too many lefty voter to begin with. The brand of the Left is hopelessly unappealing. People hear anything lefty or liberal and close their ears right away. The majority of the population is right-wing and conservatives, just like Texans are or just like California is a liberal place. Nothing’s gonna change that (and certainly not the impotent games; and the lack of message does not help either).… Read more »
petofi
Guest

@ dengle

“Get ready for a coronation ceremony and for Paks 2.”

Good. This is what these turkeys–these Hungarians–deserve.

When they, if they, finally wake up…they’ll come to a realization of the old saw that has been turned on its head: “The king has no clothes.” Except, it will be that, “That the people have no clothes.” Then, there eyes will be opened and they will realize that they have become the first modern slaves….fully in the control of a foreign power.

tappanch
Guest

@dengle

“The majority of the population is right-wing and conservatives, just like Texans are or just like California is a liberal place.”

THis has come straight from the Fidesz propaganda machine, this is NOT true

Share of “left” parties of the party list votes:

1994. election: 55.63% [MSzP+SzDSz+Munkaspart+Agrarszovetseg]
1998. election: 44.21% [MSzP+SzDSz+Munkaspart]
2002. election: 49.78% [MSzP+SzDSz+Munkaspart]
2006 election: 52.56% [MSzP+SzDSz+Somogyert]

In 3 out of the 5 elections between 1994 and 2010, the “left” parties received MORE votes than the “right” parties.

So Hungarians are not inherently “right-wing”.

andy - URGENT message to the EU administration !!!
Guest
PAKS debacle centers around the following issues 1. The legal EU ratification. 2. Fair procedure according to agreements between close allies (i.e. Hungary and the EU). 3. Use of standard Western commercial procedures 4. Common sense (you avoid biting the hand of the one who feeds you namely that of the EU) 5. Take time to internally – politically, economically, ethically, safety-wise) ratify a procedure that has major long-term political and economic influence on the future of Hungary. 6. Take time and effort to openly discuss with relevant civil associations, minority representatives and the public via public Forums, and the Media. 7. Realize there is absolutely no reason to rush to a decision. 8. Avoid rushing to judgment by a single individual (the Prime Minister in this case) using political coercion. Without the above steps you get an agreement done “in bad faith”. The EU administration urgently needs to ESTABLISH AN EXPRESS TASKFORCE to deal with ill-willed and destructive behavior within its ranks. Without such a task force the result will be the erosion of EU credibility, lack of protection of international law-and-order and of business and moral instability. The EU needs to URGENTLY put its house in order to… Read more »
dengle
Guest
tappanch: you cited the last election from 2006. That was eight years ago. Since then a significant portion of MSZP’s voter base left, perhaps forever, to support the economically leftist, essentially national socialist Jobbik. This is, I suppose, because MSZP can no longer offer them anything meaningful. More EU? Rule of law? Those people cannot even read and write, but they feel that they have no jobs, there are no opportunities, there is a low level chaos, and they live in a world reminiscent of Borbély Szilárd’s Nincstelenek. Nazism is Hungary was very much a leftist, anti-capitalist movement, even though people concentrate on its anti-semitism aspects because of the Holocaust. People were poor and did not like that. And this is the situation with Jobbik now. I suspect most of its voters don’t give a s**t about Jews or even the Gypsies, they vote because of Jobbik’ economic bullshit is attractive to them and they want to express protest, which they cannot do with voting for the Left. Moreover, there was a significant demographic change during the last 8 years. Since among the older generation there were many more leftists than the average, as this cohort go the proportion of… Read more »
tappanch
Guest

MOL share is @13,000

210 billion HUF or 42.1% is the [unrealized] loss from Orban’s stock exchange gambling.

Guest

dengle is right:

The old left is dying rapidly – literally! Just look at the latest statistics on population growth and life expectancy:
http://www.bbj.hu/economy/hungary-eight-other-eu-countries-with-negative-population-growth_76420
“Measured from the age of 60, Eurostat put Hungarian life expectancy at 77.3 years; the sole EU states to finish worse were Bulgaria (77.1 years), Lithuania (76.8) and Latvia (76.5).”

How sad!

tappanch
Guest

The ForEx does not like the rule of the Ukrainian nationalists:

The UAH lost 14% of its value against the euro in the last seven days.

EUR/UAH=
July 10, 2013: 10.45
February 20, 2014: 12.26
February 27, 2014: 14.30 (now)

tappanch
Guest

1. A group of Gipsy men beat to death a non-Gipsy man in Olaszliszka in 2006.

Punishment:
for minors: 10 years
for adults: 17 years to life

2. A group of well-to-do men beat to death a homeless in Pilisszentiván in 2012:

Punishment
for minors: 6 years
for adults: 8 years

http://index.hu/belfold/2014/02/13/joravalo_fiuk_csak_agyonvertek_a_hajlektalant/
http://szuveren.blog.hu/2014/02/27/biroi_populizmus?utm_source=cimlap&utm_medium=link&utm_content=2014_02_27&utm_campaign=index

HiBoM
Guest

Fidesz is also responsible for hammering home this mental perversion, that tends to be unquestioned by Hungarians of all political convictions (not least, this place), that the world can be divided up into left and right, two immiscible camps that hate each other. The result is this awful tribalism that makes any kind of discussion or dialogue borderline impossible. On this thread, tappanch has grouped SZDSZ and the Munkáspárt into the “left” tribe, which is bizarre as I doubt there is any issue that the two parties could ever have agreed on. One is western and capitalist in outlook. The other is anti-capitalist and essentially Kadar communist in instinct. So what use is this labeling?

My fear is that this next election will be decided by people deciding to vote tribally, rather than make decisions based to a large degree on their own self-interest.

andy - lookin for simple answers
Guest

HiBoM, both tribal allegiances (your belief) and self-interest BOTH appear less relevant right now cause I see lots of former socialists disgusted by the types of Gyurcsany’s unprincipled past and by the old commies routines however they are LOOKING for HOPE. Orban offers them one-syllable truths that contain an alement of traditional hope provided by a seemingly benign and good-willed dictator.

This majority of simplistic minds who are burned out by getting nixed out are getting “kápráztava” by Orban’s simplified logic of one-word solutions: simple words like haza, (home of the brave) történelmi igazság (historical truth), Magyar történelem – (Historical Hungary) i.e. little jingles that provide a simplistic answer that can avoid soul-searching and mental exertion.

This is a TIRED country where no government has worked out in the last 80 years!!!!!
There are no good tribes left, just more appearances mirage-type solutions to huge problems looming on the horizon.

The simplest answer will DO for most voters.

Dr. L. PETROVICS Ofner
Guest
Dr. L. PETROVICS Ofner

This is a very informative summary. But please forgive me to backtracking to earlier posts which still remain timely here and now need clarification.
The statements by Szakaly, Director of Veritas Institute, and Hungary!s role in the first major atrocities regarding the Final Solution have become understandably mixed with emotionalism, and confusion. Some reports site that only foreign Jewry were deported, others that largely Hungarian Jewry were deported.

Can this be clarified?

Second, was transport by train from Budapest mostly by cattle car, or a mix of 3rd class passenger?

The reason I ask, which I can flesh out later, is that one main contributions from the Memorial Year, as a strategic goal/desire, is to have the textbooks revised to reflect the reality of what happened during the Holocaust both in terms of depth pf content and also treatment. Lauders recanting his apology as Head, WJC, has deep, practical impact.

HiBoM
Guest

I did actually meet Mr Petrovics Ofner personally in the 90s (do you still have the hip flask Laci??) and can confirm he is a real life person. He was completely incoherent and confused even then (which we attributed to the hip flask) and time has done nothing to unmuddle his brain. Good grief man, is the issue of cattle trucks or 3rd class carriages really an issue when the end result was that the people were liquidated when they got off?

andy - Video of eviction to nowhere -- from their huts
Guest

OT – Eviction from their huts. A Picture of Hungary today.
Video of intelligent but homeless people living in huts in a forest at the edge of Budapest.

https://www.facebook.com/indexvideo/posts/10151954393208133?notif_t=notify_me
(You don’t need translation. The sadness is self-evident)

gallego
Guest

This has got nothing to do with nationalists.

V. Putin promised a loan to Ukraine (subject to his conditions) so that the maturing debt could be paid. Now, without new loans, the country is heading where it was anyway heading: to default.

Ukrainian debt has always been an extremely risky proposition, it would be time for some investors to finally take responsibility.

tappanch :
The ForEx does not like the rule of the Ukrainian nationalists:
The UAH lost 14% of its value against the euro in the last seven days.
EUR/UAH=
July 10, 2013: 10.45
February 20, 2014: 12.26
February 27, 2014: 14.30 (now)

Istvan
Guest
While Eva’s post I is about the Russian Paks deal and the EU, the situation in the Ukraine in relation to the Russian armed forces mobilization is deeply relevant. Today several dozen armed men stormed and seized the buildings of the legislature and the local government in Ukraine’s Crimea region, where the majority of the population are Russian speakers. The BBC is showing pro-Russian demonstrators outside of this seized building. Igor Korotchenko, a former colonel of the Russian military’s General Staff, wrote a commentary in a Russian online newspaper, slon.ru, saying “if illegal armed formations attempt to overthrow the local government in Crimea by force, a civil war will start and Russia couldn’t ignore it.” So what is the response from the EU, NATO, and the US? Secretary of State John Kerry issued this statement: “Any kind of military intervention that would violate the sovereign territorial integrity of Ukraine would be a huge, a grave mistake. The territorial integrity of Ukraine needs to be respected.” But NATO has not been mobilized in response to these developments, and I suggest it is unlikely a mobilization of NATO forces will happen no matter what Putin does. I would also suggest if NATO… Read more »
Marcel Dé (@MarcelD10)
Guest

Also, Kinga Frojimowics’ answer to Szakály in 2007 (his views aren’t new):

http://www.es.hu/frojimovics_kinga;a_keokh-rol_tenyszeruen;2007-09-30.html

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