After Jean-Claude Juncker was elected president of the European Commission he proposed an ambitious program for 2015. He defined ten priorities around which he wants to build closer cooperation among the member states. One of these was “a resilient Energy Union with a forward-looking climate change policy.” According to Vice-President Maroš Šefčovič and Commissioner
Miguel Arias Cañete,
The Energy Union means making energy more secure, affordable and sustainable. It will allow a free flow of energy across borders and a secure supply in every EU country, for every citizen. New technologies and renewed infrastructure will cut household bills and create new jobs and skills, as companies expand exports and boost growth. It will lead to a sustainable, low carbon and environmentally friendly economy, putting Europe at the forefront of renewable energy production and the fight against global warming.
Šefčovič voiced his disapproval of the separate negotiations between Russia and Hungary by saying that “ideally the commission should be part of the negotiating team.” One of the key elements of the Energy Union is that member states’ energy deals with non-EU countries should be approved by the European Commission. Viktor Orbán’s reaction was immediate and predictably negative. At a press conference on February 18 he said that he “will have a major problem [with Brussels],” adding that he is “expecting an escalating conflict.” Any kind of European Energy Union is unacceptable to Hungary because it infringes on the country’s sovereignty. At the same press conference he talked about his insistence on making energy a “nonprofit” commodity, an idea no other country supports.
It seems that the European Commission was not impressed with Orbán’s threat of an escalating conflict. On February 27 the Commission approved the proposals of the Department of Energy that had as their goal a common energy market for the 28 member states. The idea is to provide energy security that is sustainable, competitive and affordable for all citizens of the EU. The Commission would like to create a situation in which each country would have at least three different sources of energy. Brussels also wants greater transparency when it comes to energy deals with non-member states. That means the EU overseeing Orbán’s negotiations with the Russians and energy prices in general. Juncker also declared that the EU will require, “if necessary by legal means,” the separation of the ownership of the infrastructure from the energy providers. At present the Hungarian energy situation is a far cry from the desired aims of the European Union.
On March 19-20 leaders of the 28 member states gathered to discuss, among other things, the creation of a single European Energy Union, the one Viktor Orbán vehemently opposed a month ago. The European Council broadly approved the proposals set forth by the Commission, although admittedly they left some of the more problematic details out of the final communiqué issued after the summit. Specifically, the demand that
ensuring full compliance with EU law of all agreements related to the buying of gas from external suppliers, notably by reinforcing transparency of such agreements and compatibility with EU energy security provisions. As regards commercial gas supply contracts, the confidentiality of commercially sensitive information needs to be guaranteed
Experts on energy matters think that “the Commission didn’t need a ringing endorsement of its Energy Union proposals from the European Council at this stage. All it required was a gentle nod from the heads of state and a quiet signal to get back to work. Tonight they received a green light to proceed.”
That gentle nod also came from the earlier blustery Viktor Orbán. In his press conference for Hungarian reporters he said nothing about his demand for energy’s non-profit status. He said only that “for Hungary the most important consideration is the price of energy.” According to him, this concern “received considerable weight” in the final document. This “considerable weight” was the following sentence: it “will provide affordable energy to households and industry.” As for the sticky question of energy deals with non-member states, Orbán found it comforting that he will “only have to inform Brussels if such a contract is signed.” There is no question of approval or demand, he continued, because “this would be unacceptable for Hungary.” But it doesn’t matter how Orbán tries to explain himself away, the fact is that the European Energy Union will force Hungary, just like all other member countries, to follow the rules and regulations of the Union. Hungarian sovereignty, which is so important for Orbán, will be further curtailed.
He briefly talked about Paks and Euratom’s veto of the Russian fuel supply. Here he made a statement that deserves some scrutiny. The Hungarian government thought that their contract was “acceptable, but it left itself room for maneuver.” Many commentators interpret this sentence as an admission that the Orbán government knew all along that signing a contract which includes a provision that the Russian-built power plant will also receive Russian fuel rods is illegal, but that they might be able to argue that if the Finns can have this arrangement in their Fennoveima plant Hungary should be allowed the same in the case of Paks.
But there is a crucial difference. Fennoveima received the nod before August 14, 2014, when a new law was introduced that mandated the diversification of the fuel supply and included other provisions on diversification. Didn’t the Hungarian government notice the change in the legislation or did they just hope that the question of the source of the fuel supply would come up only years later and that perhaps nothing would happen until the plant was practically built? Hard to know.
In any case, on the issue of Paks Orbán managed to get himself in a bind. Yes, for the time being Paks is stalled, blocked, if you prefer. And by Friday the government spokesman was no longer so sure about suing The Financial Times, as originally planned. Dropping the whole issue would be a wise decision although, I must admit, lately Viktor Orbán seems to be incapable of wise decisions.