Viktor Orbán between Russia and Brussels

In Budapest there is the usual Friday political turmoil since it’s the day that Viktor Orbán holds a well-rehearsed conversation with a journalist of the Hungarian state radio. I no longer call Magyar Televízió and Magyar Rádió public television and radio stations since in the last four years both have become mouthpieces of the government. Just like in the Kádár regime.

Normally the world does not pay much attention to these early morning chats, but today was different. By 04:45 EST Reuters reported on what Viktor Orbán had to say about the European Union’s sanctions against Russia. After the leaders of the Union decided on tough economic sanctions against Russia, Orbán publicly voiced his opposition to the plan. Referring to the Russian ban on agricultural products coming from the European Union, Canada, the United States, and Australia, he announced that the sanctions policy pursued by the West “causes more harm to us than to Russia…. In politics, this is called shooting oneself in the foot.” He continued: “I will do my utmost–of course we are all aware of Hungary’s weight, so the possibilities are clear–but I am looking for partners to change the EU’s sanctions policy.”

This move of Orbán may not have come at the best time. Just yesterday political observers noticed that Putin adopted a softer tone during a visit to the Crimea that was not carried live on Russian television. Moreover, the sanctions have just begun to bite, but even before there were signs of financial strain as a result of the annexation of the Crimea. Desperate for cash, the Russian government dipped into the national pension fund which means taking away from every Russian two years’ worth of social security payments. Although Putin’s personal popularity is extraordinarily high, according to one survey only 7-12% of the population are ready to make financial sacrifices for the sake of Russia’s policies in Ukraine.

Inflation is up 9% this year while there is no economic growth. The government is contemplating a new 3% sales tax to plug some holes in the federal budget. There are already shortages in the supermarkets. Forty percent of Russia’s food supply comes from abroad, and Russian consumers will be unhappy very soon. In the last twenty years or so they became accustomed to a great variety of products from all over the world and they have no intention of returning to Soviet times of limited supplies and inferior quality. Putin’s propaganda that the ban on Western food is just a means of “supporting the product manufacturers of the fatherland” will wear thin soon enough.

The temporary loss of the Russian market for Hungarian agriculture is less significant than the Hungarian government wants the world to believe. Orbán put in a bid for compensation and therefore, I assume, he exaggerates the potential losses for Hungarian farmers. Reuters in its report claims that Russia is Hungary’s largest trading partner outside the European Union, with exports worth 2.55 billion euros in 2013. However, this figure may be wrong. According to a Hungarian source, that figure is 70 billion forints, which is only 223 million euros at today’s exchange rate. So, the Russian sanctions against Hungary will not be as painful as Orbán would like to portray them. On the other hand, Western sanctions against Russia are more serious from Hungary’s point of view than the Russian sanctions against Hungary, Zsolt Kerner claims. One of the Russian banks affected by the sanctions is the state-owned Vnesneconombank (Bank for Development and Foreign Economic Affairs), which owns part of Dunaferr and is also the bank through which the Russian loan to build a new nuclear power plant in Paks will be administered.

Orbán’s attack on the Russian policy of the European Union is also ill-timed.  Finland’s president, Sauli Niinistö, is currently in Moscow to negotiate with Putin. Although Niinistö is not an official envoy of the European Union, he was in contact with western colleagues. The European Union has been seeking a diplomatic solution to the crisis, and they don’t need Viktor Orbán’s good offices as a messenger between Moscow and Brussels.

While Niinistö was negotiating with Putin in Moscow, the EU foreign ministers held an emergency meeting in Brussels, discussing among other things the Ukrainian situation. Of course, I have no idea what position Tibor Navracsics took at this meeting, but I assume he was instructed to oppose sanctions and perhaps suggest bilateral discussions with Moscow. Whatever the Hungarian position was, according to the agreed-upon statement “any unilateral military actions on the part of the Russian Federation in Ukraine under any pretext, including humanitarian, will be considered by the European Union as a blatant violation of international law.” And, most importantly, “the Council  … remains ready to consider further steps, in light of the evolution of the situation on the ground.” According to diplomats, the new measures would target Russian sales of sovereign debt, its ability to raise funding through syndicated bank loans, and high-tech machine imports.

I may add here that Viktor Orbán’s old friend David Cameron, with whom he saw eye to eye on the nomination of Jean-Claude Juncker to be president of the European Commission, is unlikely to be on his side on the issue of EU sanctions against Russia. Great Britain is one of the harshest critics of Russia’s destabilizing efforts in the region.

By now Orbán has one staunch ally and that is Robert Fico, the prime minister of Slovakia who announced his opposition to sanctions already yesterday. However, it seems that the Slovak leadership is divided. Andrej Kiska, who recently defeated Fico to become Slovakia’s president, came down on the side of sanctions. He said that “when words aren’t enough, economic sanctions can be used to bear greater pressure on countries which seek to expand, dictate or threaten.”

Orbán’s comment that the sanctions policy hurts the European Union more than it does Russia and that EU policy is in fact a move by which the EU shoots itself in the foot was not left unanswered. Lithuania’s foreign minister, Linas Linkevicius, upon arriving for the EU foreign ministers meeting in Brussels, retorted that it was better to shoot oneself in the foot than to let oneself be shot in the head. Naturally, Lithuania politicians are a great deal more worried about Russian intentions than is Orbán, who looks upon his country as a kind of bridge between Moscow and Brussels.

What kind of sanctions? Let the man eat his sandwich in piece Source: Posteemes /Photo: Urmas Nemvalts

What kinds of sanctions? Let the man eat his sandwich in peace.
Source: Postimees / Urmas Nemvalts

Estonia, which is in the same boat as Lithuania and Latvia, has lately changed its until now pro-Hungarian attitude. One reason for that change is Orbán’s overly cozy relations with Putin’s Russia. But there is another. While Hungary just opened a new embassy in Ecuador’s Quito, it unceremoniously closed its embassy in Tallinn, the capital of Estonia. Estonia is not only a fellow EU member, but Estonians speak a Finno-Ugric language. This linguistic connection has always been the source of a special bond between Estonia and Hungary, just as in the case of Finland. The Estonians not surprisingly took offense and closed their own embassy in Budapest.

And now the largest and most prestigious Estonian newspaper, Postimees, published an editorial with the title: “A delicate European problem called Viktor Orbán.” Here is a pull quote from the English-language editorial: “A headache indeed – the increasingly autocracy-minded statements and the ever tightening cooperation with Putin’s Russia by Hungarian Prime Minister Viktor Orbán. The issue being: how united is Europe in its values, firstly, and secondly in bridling the warlike neighbouring Kremlin. Obviously, the latter is searching for weak links in Europe. Alas, the still economically troubled Hungary and its populist-type anti-Brussels PM provide for one.”

Orbán’s fame is spreading, but it’s not exactly the kind that Hungarians can be proud of.

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qaz
Guest

As to Russian sanctions against the West prohibiting import of foodstuff and other consumer goods, a popular joke in Moscow is that the president wanted to show western leaders he was on par with them and could also inflict sanctions against Russia 😉

petofi
Guest

For Hungaricoes critical of the USA….How many years is Hungary away from this kind of
treatment for politicos who abuse their power?

http://www.statesman.com/news/news/rick-perry-indicted-for-lehmberg-veto-threat/ng3zF/

Gardonista
Guest

It’s been pathetically hard to EU to stand up for its values by sanctioning Hungary in some way. Europe has finally started taking action against Russia, and if it hurts Orban, that’s a plus for most of Europe. If Hungary is the one objecting to sanctions against Russia, the most Europeans would probably be MORE inclined to sanction Russia.

If Orban wants to rail against Europe, then he can’t expect much sympathy from them.

Marcel Dé (@MarcelD10)
Guest

Eva S Balogh: According to a Hungarian source, that figure is 70 billion forints, which is only 223 million euros at today’s exchange rate.

This figure is inline with what everyone can gather from a query on Eurostat. Here are, for some EU countries, the total values of food and beverage exports to the Russian Federation in 2013 (in million euros):

Lithuania: 1,289
Poland: 1,187
Netherlands: 959
Latvia: 613
Denmark: 556

Hungary: 192
Slovakia: 21

I intentionally left out the big EU agro exporters (DE SP FR IT) to avoid tempting the usual trolls. Note that alcoholic beverages – which are not part of the ban – may be included.

Orbán and Fico are two sides of the same populist coin.

Istvan
Guest
Back in March the Washington Post Henry Kissinger published a long article on the situation in the Ukraine as it relates to US foreign policy. It contained these lines: “Public discussion on Ukraine is all about confrontation. But do we know where we are going? In my life, I have seen four wars begun with great enthusiasm and public support, all of which we did not know how to end and from three of which we withdrew unilaterally. The test of policy is how it ends, not how it begins.” Since March when Secretary Kissinger wrote his article the situation has deteriorated and the Ukrainians have been forced to wage war against separatists who are attempting to transfer yet more territory to Russia. PM Orban is discussing the situation of sanctions as if they are just some sort of a policy dispute, not a response to Russia’s precipitous actions that have created a real civil war where hundreds are dying not far from Hungary’s borders. Eva’s post correctly notes that the sanctions are having an adverse impact on the Russian Federation, Eva’s post very delicately implied that Putin may in fact back off to some degree given these sanctions and… Read more »
Marcel Dé (@MarcelD10)
Guest

I can understand the Balts’ worries: not only do Estonia and Latvia count a sizable ‘ethnic russian’ minority, but in four months their own air space will be protected by … the Hungarian Air Force. Orbán’s loyalty to NATO may be tested soon.

While the timings of the Paks deal and the spilling out of HU passports to ‘ethnic magyars’ were obviously chosen for domestic reasons, they couldn’t have looked worse in the light of the Russo-Ukrainian crisis. And now, the Băile Tuşnad speech and protesting sanctions …

Lilliputin has only himself to blame for the extremely bad press Hungary is getting all over the EU this summer. Apparently, his strategy is to get more.

petofi
Guest

@Istvan

Whatever else, History has shown that backing down in the face of a megalomaniac’s aggressiveness leads to further, greater, difficulties. Anything that smacks of appeasement
to Putin will lead to disaster.

Of course, a great deal of the present difficulty has been the mealy-mouthed foreign policies of Obama–he has enabled Putin’s foreign affairs sorties by his weak-kneed reactions in Syria and elsewhere.

The next US elections cannot come soon enough. Hillary would be disaster: she would lead to a major war. Romney, the bible-toting, god-is-on-my-side, candidate may just put the right amount
of incalculability into the mix that Russians–as with Reagan–would not challenge.

Kirsten
Guest

“And now the largest and most prestigious Estonian newspaper, Postimees, published an editorial with the title: “A delicate European problem called Viktor Orbán.””

Meanwhile in the Czech media… Lidove noviny, more or less centre to conservative, owned currently by the minister of finance, himself a businessman of many connections, with the section in which it appeared led by some former advisor to Vaclav Klaus, printed the whole speech of Baile Tusnad, introducing it with the words: “Europe needs politicians who are capable of timely addressing the problems of today’s world. The Hungarian prime minister succeeded in that as one of the few – or perhaps the only – European politician.” Marcel Dé, exiled kuruces at work ?! :-).

LwiiH
Guest

@Istvan, to show Putin weakness or even indecisiveness at this time is in effect giving him permission to invade the Ukraine. His first calculation seems like it was based on information he obtained from Snowden. The strength of the sanctions were a surprise and have resulted in a continuing covert effort to continue to destabilize. The end game is clear, keep Putin out of the Ukraine. OV should understand that to stand up and fight for your principles isn’t going to be free.. except in this case one has to wonder if OV’s shadowy enterprises are being hit by these sanctions and that is what he’s really complaining about.

Smithborough
Guest

Russia has been accusing Hungary of arming Kiev with tanks in the last few days. Just shows what thanks Viktor will get in return for kissing Putin’s posterior…..

gdfxx
Guest

I heard on the public radio this morning that Poland had asked the US to buy up its apple crop, originally destined for Russia.

Maggie
Guest

How to “legally” syphon off billions from the National Bank of Hungary, part 785.

How to enrich yourself from taxpayers’ money beyond your wildest dreams? part 963

The Bank, a couple of weeks after it purchased a castle (officially for ‘recreational purposes’ more likely the Fidesz-loyal seller needed the dough), purchased the most expensive office building available on the market, which the sellers (a bunch of off-shore companies) were unable to sell for months due to the high asking price (and rather low tenant utilization).

Now Matolcsy and co. stepped in and transferred about HUF 12 bn to the still unknown sellers (hint: Hungarian oligarchs and Fidesz-cronies).

http://444.hu/2014/08/16/kastely-utan-az-orszag-egyik-legdragabb-irodahazaval-is-meglepte-magat-a-magyar-nemzeti-bank/

Marcel Dé (@MarcelD10)
Guest

@Kirsten: the Czechs love political myths too, but they involve scholars more often than peasants 🙂

OV has been enjoying some support for his posturing, and some of his ideas, in the EU. And not always by fringe parties. If such was your point, I agree… though my guess is the situation in Ukraine is making him lose far more ‘friends’ than he gains new ones.

PS: Is the piece you’re referring to online? I couldn’t find it.

petofi
Guest

@Smithborough

“Russia has been accusing Hungary of arming Kiev with tanks in the last few days.”

Tut, tut. Just a little plant by our friendly FSB/KGB boys…Some misdirection; as if VO wasn’t one of theirs…

Kirsten
Guest

Marcel Dé: I could not find it on the net either, it is in the printed paper. I can scan it if you are interested. In the meantime I checked that the editor (Roman Joch) was probably not advisor to Vaclav Klaus but to Petr Necas, and that he is generally considered extremely conservative by other commentators. Still, it appeared in a national newspaper on a prominent place.

cheshire cat
Guest
1. Orban has “fallen on the floor between the two chairs” as we say in Hungarian. He launched a freedom fight against the EU that Hungary is a member of, while demanding more subsidies from them. He followed the scent of the “eastern wind”, courting Russia for money, signing a secret financial contract about the atomic power plant. He did this for the cheap gas that financed his rezsicsokkentes (utility bill reducement), which helped him win the elections. But the conflict in the Ukraines have put him in a position where he needs to play in two teams at the same time. He, as an EU head, sanctions Russia, so Putin sanctions Hungarian imports and threatens to raise gas prices regardless of any previous private friendship agreements. Putin probably expects him to stand up for Russia in the EU council, but Hungary is too small to weaken any EU policy, and Orban is failing to get a camp of Central-Europeans behind him as he probably hoped. All the efforts about the Paks agreement were good for nothing, but they have made Hungary worryingly dependent on Russia economically, financially, politically – in the wake of a threat of military conflict between… Read more »
petofi
Guest

@cheshire cat

“Orban has zero diplomatic skills.” I wouldn’t say so. We can’t really determine until we know
what game he’s playing.

But I think your last question points in the right direction:

“Or what’s behind that, does anyone know?”

Yes, hard to decipher why an intelligent, supposedly loyal Hungarian…is going out of his way
to cause havoc for his homeland.

My main point: Orban is much more intelligent than what he’s done internationally.

So the question is: What on earth is he trying to achieve? Who’s agenda is he running?

Marcel Dé (@MarcelD10)
Guest

@Kirsten: thanks a lot, but since my Czech friend has left, I wouldn’t understand a thing!

@cheshire cat, petofi: what other foreign policy goal could an authoritarian national-christian state championing ‘Hungarian interests’ pursue, except for reversing Trianon bit by bit? My guess now is he sees Putin’s actions give him an opportunity to get Transcarpathia ‘back’, under one form or another. I’m not so sure that, should Ukraine crumble, either the EU or NATO would prevent it.

tappanch
Guest

Editorial in the Washington Post about a conceited Orban:

“Hungary’s ‘illiberalism’ should not go unchallenged”

http://www.washingtonpost.com/opinions/hungarys-illiberalism-should-not-go-unchallenged/2014/08/16/b2dc72d4-1e5c-11e4-82f9-2cd6fa8da5c4_story.html

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