International pressure on Viktor Orbán: Russia, Putin, and Gazprom

There is real concern among former Hungarian diplomats and foreign policy experts that Hungary’s isolation is practically complete and that she may remain the only “strategic ally,” to use Viktor Orbán’s favorite term even in connection with China, of Vladimir Putin’s Russia. And if the Orbán government does not try to extricate itself from this situation, the consequences can be serious. Although Fidesz supporters are convinced that the United States has embarked on the destabilization of the country with the goal of removing Viktor Orbán from power, this cannot be Washington’s intent. After all, the opposition is in disarray and replacing Orbán with another Fidesz politician would not accomplish anything. A new prime minister would be merely a figurehead; the real power would remain in the hands of Viktor Orbán.

Admittedly, on the surface this conspiracy theory finds some support in the coincidence of the American move to ban six corrupt officials and businessmen from the United States and the massive demonstrations against the internet tax that soon enough became a protest movement against the whole regime. But the latter wasn’t the U.S.’s doing. It was the folly of the Hungarian government that seems to commit more and more mistakes lately. Did Viktor Orbán lose his magic touch, or has he navigated himself into an impossible situation in which the “peacock dance” is no longer possible? He is increasingly being faced with a stark choice: either total commitment to the side of Russia or capitulation and acceptance of the rules of the game within NATO and the European Union.

Orbán might be a good politician–if we define a good politician as someone who can play one person against another, who can fool his allies, who disregards the law, and who within a few years manages to institute a one-party system, because that is what we have in Hungary. But his track record shows that he cannot govern, that he cannot run a country successfully. We who watched his first four years between 1998 and 2002 with growing concern knew that already, but it seems that in the eight years that followed his disastrous rule the Hungarian people forgot why they went out in record numbers to make sure that this man and his regime don’t come back.

The situation today is ten times worse than it was during his first administration. He has transformed the country into an illiberal democracy, and his pro-Russian policies have alienated Hungary’s allies. Viktor Orbán is considered to be a pariah and someone who is toxic because of his potential influence on some of the other countries in the region. Western politicians look upon him as a fellow traveler of Vladimir Putin. And, indeed, they seem to borrow each other’s ideas. Orbán copies Putin’s attacks on NGOs, while, it seems, Putin was inspired by Orbán’s nationalization of the textbook industry, reported just yesterday in the western press.

During his first administration Orbán was fiercely anti-Russian, and it seems that he didn’t change his mind on that score until lately. In December 2009 a Hungarian foreign policy expert and obvious admirer of Orbán described the forthcoming Fidesz victory as “Moscow’s nightmare.” Early in his second administration he worked furiously on a quasi-alliance system from the Baltic to the Adriatic in which Hungary would have a leading position. But his fellow prime ministers in the region wanted nothing to do with Orbán’s grandiose plan. He made every effort to dislodge Surgut, a Russian company that had a 21.2% stake in MOL, the Hungarian oil and gas company. By May 2011, after lengthy negotiations, the Hungarian government bought out Surgut, paying a very high price. At that time Hungary was no friend of Russia. Not yet. However, according to Fidesz sources, Orbán decided to radically change course sometime in early 2013.  He spent about six months pondering the issue and came to the conclusion sometime during the summer of 2013 that he would turn to Russia for an expansion of the Paks nuclear power plant. According to the same sources, his decision was based on his belief that the Czech Republic and Germany would need cheap energy which Hungary would be able to provide.

Since then, with the outbreak of the Russian-Ukrainian conflict, the political climate in Europe has changed dramatically. Orbán’s flirtation with Russia is looked upon with more than suspicion. The West considers Viktor Orbán and Hungary a liability. Soon enough, I believe, he will have to show his true colors. No more peacock dance. But it seems that Orbán by now is embroiled in all sorts of machinations with Russia in general and Gazprom in particular. The current setting for Hungarian machinations with Gazprom is Croatia.

Just a few words by way of background. In 2008-2009 MOL acquired a 47.47% stake in INA, the Croatian oil and gas company. In 2011 a Croatian newspaper reported that Zsolt Hernádi, CEO of MOL, had been accused by the Croatian prosecutor’s office of bribery. Naturally, the Hungarian prosecutor’s office found nothing wrong, but the Croats eventually went so far as to hand the case over to Interpol. As a result, Hernádi couldn’t leave the country; otherwise he would have been subject to immediate arrest. More details can be found in a post I wrote on the subject in October 2013. The decision was eventually made to get rid of MOL’s share in INA, but the Croatian government does not have the kind of money needed to buy MOL’s stake. Lately, there has been talk in the Hungarian press that MOL will sell its shares to a Russian buyer, most likely Gazprom itself. So, Gazprom will not only store gas in Hungary but might even control almost half of INA in Croatia.

INA: Managed by MOL

INA: Managed by MOL

And now let’s return to American-Hungarian relations. According to some observers, “the highly unusual step of blacklisting six people with ties to the government in Hungary, a NATO ally and European Union member,” also has something to do with the “growing closeness between Hungary and the Kremlin over energy that could undermine Western attempts to isolate Russian leader Vladimir Putin over his intervention in Ukraine.” So far there is not much new in that assertion, published in an article by Reuters. We have known all along that, in addition to Orbán’s domestic policies, his relations with Russia were a serious concern to the United States and the European Union. What is new in this revelation is that Washington is apparently keeping an eye on the possible MOL-INA deal with Gazprom. According to the article, Chris Murphy, U.S. senator from Connecticut, was dispatched to Zagreb “to lobby the government … on the issue.” Another interesting piece of information gleaned from the article is that State Department official Amos J. Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs, met Hungarian Foreign Minister Péter Szijjártó and had a “productive meeting during Szijjártó’s recent visit to Washington about MOL’s stake, the South Stream, and Hungarian gas deliveries to Ukraine.”

All in all, it seems to me that Viktor Orbán is in over his head, especially with a foreign minister with no diplomatic experience. Szijjártó was an excellent spokesman for Viktor Orbán as the head of the “parrot commando,” but he is not qualified to be foreign minister, especially at such a delicate juncture.

It is hard to tell what Orbán’s next step will be. Fidesz media attacks on the United States are fiercer than ever, and its admiration of Russia is frightening. But more about that tomorrow.

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fafarago
Guest

Does anyone know about any Socialist politician who was trained by the KGB for 5 months? I heard from a friend that MSZP nominated such a person for an upcoming election but it is a very fantastical claim.

I even thought are no elections any more are there? I quickly switched the topic but would appreciate some info about any KGB agents in the Socialist party especially as they are likely become the governing force in Hungary after 2018.

tappanch
Guest

The current share price and exchange rate evaluate MOL’s 49.08% stake in INA at €2.448 billion, virtually unchanged (down 0.5%) since October 2013.

tappanch
Guest

My understanding is that he participated in a course in the Soviet Union as a border guard officer in 1984. Border guard units were under the Ministry of Interior.

MSzP might manage to lose this relatively safe district by fielding a candidate with a past that can be questioned.

tappanch
Guest

Market capitalization of MOL = € 4 billion ( €3.993)
Market capitalization of INA = € 5 billion ( €4.987)

Stake of the Hungarian state in MOL is 24.7%. It is currently worth € 0.986 billion

Therefore the indirect stake of the Hungarian state in INA is worth € 0.605 billion

Member
Thank you Éva for your excellent articles, I read every one of the and daily. I also enjoyed the video interview on vim, which was made recently by a friend of mine’ son. I generally agree with your opinions also, and I have a great respect for the excellent and accurate, timely information you are able to gather and put in front of us, readers. I would like to add my humble opinion to the subject on the “Stadionbuilder viktor”, the new MINI-Mussolini of Europe, who begins to turn as a weathervane peacock from left to right and just now in the direction of the East, Russia, Kazakhstan, Belarus, etc.. ====== The US denial of entry of perhaps six people, (may be more soon), who are criminals on a large scale and employed or attached to the Government and/or the “Stadionbuilder viktor”. Hungarians concentrate on the non-entry of six people and most don’t know, that is private matter, no information about them will be provided by the US, BY LAW!. None required either. If a Prime minister and his Government does not know his top corruption organizers, appointed by them, that is enough of an indictment. The denial of entry… Read more »
Member

I apologize for the torrent of misspelling in the beginning of my comment. The spell checker changes some of the words and I failed to correct them Here is the beginning again;

Thank you Éva for your excellent articles, I read every one of them and daily. I also enjoyed the video interview on Vimeo, which was made recently by a friend of mine’s son.
I generally agree with your opinions also, and I have a great respect for the excellent, accurate, and timely information you are able to gather and put in front of us, readers.
I would like to add my humble opinion to the subject on the “Stadionbuilder viktor”, the new MINI-Mussolini of Europe, who begins to turn as a weathervane peacock from left to right and just now in the direction of the East, Russia, Kazakhstan, Belarus, etc..

Member

It is possible that OV badly needs the money from selling INA. However Hungary’s economical state is not that bright as the government states, as we could learn from yesterdays forecast from GKI (Research Intitute of Economics).

LwiiH
Guest

“Admittedly, on the surface this conspiracy theory finds some support in the coincidence of the American move to ban six corrupt officials and businessmen from the United States”

Note, this must have been in the works for some time and note, it was announced *after* the elections. Accidential timing, I think not.

tappanch
Guest

Interview with chargé d’affaires.

The banning of the entry of the six has nothing to do with the politics of the Orban government, it is an issue of corruption. Nobody can enter the US with a diplomatic passport if s/he is on the list. [Therefore Habony is not on the list].

http://www.origo.hu/gazdasag/20141103-andre-goodfrienddel-az-egyesult-allamok-budapesti-nagykovetsegenek-ugyvivojevel-a-kitiltasi.html

tappanch
Guest

The Fidesz government intends to tax the foreign-owned retail chains so much that they should leave Hungary.

http://nol.hu/gazdasag/hiperaktiv-kiszoritosdi-1496293

Guest

Not too much OT:

It seems that Mrs Merkel used strong words and warned Putin re the Eastern Ukraine:
http://deutsche-wirtschafts-nachrichten.de/2014/11/03/merkel-droht-russland-mit-neuen-sanktionen/
New sanctions against Russia are planned …

Pék
Guest

People may hope that Orban’s Russia friendliness may be subject to change once he signed the all important long term gas supply agreement. (But that assumes the Russians are amateurs.)

However, it’s like hoping Orban will change because “hey it’s only campaign time and during that period he says stupidities” but after he is elected, he will be reasonable.

Right, he will be reasonable. Muhahaha.

ulyanoff
Guest

@tappanch: I hope you are aware of the fact that the “border guards” were a legitimate cover for secret service people, just like the police force. Their neighbors thought he was working for the border guards. Mr. Bakondi comes to mind, who was also at the border guards according to his official cv. Or maybe not full time. Obviously Fidesz loves to use these people, but they are in power, they can do anything. A party trying to change and resurrect itself would have to do it better. But there’s zero change at MSZP and apparently zero vetting for candidates (Fidesz using its internal security apparatus vetted these people more than their own party it seems, Fidesz truly cares and leaves nothing to chance). Whether or not this is the real KGB is irrelevant (and I would still say it is), it’s embarracing — for those minority which cares about the left wing. The end of MSZP is far, fortunately for Fidesz. The decline will only worsen.

tappanch
Guest

Unexplained deaths in the last year:

1. Andras Komaromi, owner of EMIR, the software that kept tab on the EU tenders.
This is now in Fidesz hands, or can Komaromi’s underage children lay claim to the software?

2. Tamas Welsz, the key figure to refute the pre-election Fidesz charges against the vice president of the opposition party MSzP.

3. Andras Varady, shepherd, who opposed Orban’s buddy and son-in-law in Alcsut.
He died on the eve of the local election.

Can anyone add to the list?

tappanch
Guest

The European Union has supported by [at least] 18 billion euros the Orban regime so far.
This is an average of 4.17 billion euros a year.

Source: the counter on the top of of http://palyazat.gov.hu/

tappanch
Guest

The police claims that they were not at the Fidesz headquarters at the end of the first anti-internet tax rally, that is why they could not prevent the smashing of some of the windows.

http://index.hu/belfold/2014/11/03/miert_nem_vedtek_a_rendorok_a_fidesz-szekhazat/

As an eyewitness, I can say that this is a lie.
As I wrote here on the day of the event, I saw a police van withdrawing without being attacked, as if by orders.

There are signs that Fidesz wants to alter the law about demonstrations, restrict freedom of assembly citing this event.

Border
Guest

One more thing re the border guard. It was an integral part of the security state. It was at the border where Hungarian people were turned into informant after finding 20 dollar bills in their undies. I guess this must have happened with foreigners as well, the killer of the Bulgarian dissident Markov is suspected to be an Italian who was enlisted after he was found attempting smuggling to/fro Bulgaria. Most importantly the guard existed to guard Hungarians, preventing them from leaving Hungary. Our MSZP guy was an overachiever in this apparatus who was carefully selected to study in the USSR, where even to travel internally to another town of the same Soviet Republic one needed passport.

tappanch
Guest

1.
@Border

It was not the border guards but the “vámosok”, the customs people that searched for cash and hidden items.

2.
The smallest amount of social security [apart from 0] is unchanged since 2008: 28500 forints.

Its value was 113 euros then, it is worth 92 euros now.

http://www.vg.hu/penzugy/ongondoskodas/egyetlen-fillerrel-sem-no-a-nyugdijminimum-2008-ota-438255

Member

“Orbán decided to radically change course sometime in early 2013. He spent about six months pondering the issue and came to the conclusion sometime during the summer of 2013 that he would turn to Russia for an expansion of the Paks nuclear power plant.”

Eva – Orban was already talking about enlisting Russian help to renovate Paks in November 2009. He talked about it at length during a TV interview after he returned from a visit with Putin in Moscow. I remember this quite clearly because I had to translate the interview.

Ron
Guest

Seal Driver: You are absolutely right. But so is our hostess. In November 2009 she made an articles about this. At that time she did not trust VO and the fact that he spent more than a half hour with Putin. However, I believe he had his Paks idea, but he was there a chairman of Fidesz at an event with more than 2,300 people.

http://hungarianspectrum.org/2009/11/26/past-and-future-hungarian-prime-ministers-in-russia/

an other article I found about this issue.

http://energyscee.com/2009/11/26/is-orban-riding-with-putin/

Guest

The German SPIEGEL also has a very negative article on Hungary’s pushing of the South Stream pipeline – against the EU and the USA’s will …
http://www.spiegel.de/wirtschaft/soziales/south-stream-ungarns-parlament-beschleunigt-bau-a-1000855.html

Nicky
Guest
tappanch
Guest
tappanch
Guest

Internet tax in T/1705:

At this moment, Rogan has withdrawn his ambiguous upper limit amendment, so the current bill in front of the House contains the full force of 150 forint/GB.

tappanch
Guest

The partial Garancsi network:

comment image

Border
Guest

Antal Rogan’s bill to cap the internet tax was just revoked.

Currently the bill which is effective, is the uncapped internet tax.

Orban will introduce the tax, under a different name.

Because he wants to escalate the fight.

He wants to provoke the anti-internet demonstrators and the Peace March people.

The bigger the anger, the better.

He will position himself as the moderate force (as if Peace March wouldn’t be a directly managed Fidesz party branch) who rises above all these petty fighting.

Given the expectable damage the Fidesz HQ will suffer (provocators will be sent too), the laws will be tightened and survallence increased.

http://hvg.hu/gazdasag/20141104_Visszavontak_Rogan_javaslatat_az_internet

Ron
Guest

Btw it is not Daneb Algedi Invest, but Deneb Algedi Invest. The Managing Director is Lakatos Benjamin, who himself lives in Wollerau.

From Moneyhouse: http://www.moneyhouse.ch/en/u/deneb_algedi_invest_ag_CH-170.3.037.204-2.htm

In Wollerau where apparently Lakatos is living is another p.o.Box for Hungarians at company called MAF Zurich (http://www.zcgroup.org/hu). Also I noticed the ATC Group, which is a well known trust office in The Netherlands, just recently taken over by Intertrust,is the Corporate Headquarter of Deneb. And also do private banking.

http://www.privatebanking.com/directory/europe-switzerland-zug-zug/banks/intertrust-group-holding-sa

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