Tag Archives: Paks II

A political deal was struck: The European Union, Hungary, and Rosatom

The independent Hungarian media has published about a dozen articles in the last few days about the revelations Benedek Jávor, Párbeszéd’s member of the European Parliament, managed to unearth about the European Commission’s decision to drop its objections to the nuclear power plant in Paks, to be built and financed by Russia. Less was written about it in the foreign press.

One of the Commission’s initial reasons for opposing the project was the lack of competition in awarding the tender to Rosatom, a company owned by the Russian state.

Benedek Jávor has been after these documents which, he suspected, would reveal that the rather abrupt shift in the Commission’s attitude toward the Hungarian project which occurred in November 2016 might have gone beyond legal or technical considerations. The EC officials were less than enthusiastic about providing Jávor with the documentation. In fact, he had to threaten them with legal action before he received the crucial documents that proved to him that a political deal had been struck between Brussels and Budapest which allowed the Russian-Hungarian nuclear project to proceed.

People have speculated for some time that Hungary had secret supporters within the European Commission. The chief suspect was Günther Oettinger, who visited Budapest in November 2016 in the company of Klaus Mangold, a German businessman with good Russian connections. As we now know from the newly released documents, there were others as well. The infringement procedure against Hungary was dropped when the EC cited “technical exclusivity” as the deciding factor, agreeing to Hungary’s argument that only Rosatom’s reactor fit the requirements for the project which, by the way, a lot of experts wouldn’t buy.

According to a well-known energy expert, “the term technical exclusivity is essentially a last resort.” He called attention to the fact that France made a similar argument in awarding the Flamanville nuclear plant’s contract to a company without inviting bids from others. He added that Hungary knew that the Commission would “roll over, as it did in the Flamanville case.” As we have now learned, the Hungarian government needed a little help in coming up with the “technical exclusivity” argument, and that help came straight from the “Brussels bureaucrats.”

It was at the end of 2014 that Jávor filed a complaint with the European Commission about the unlawful award of the Paks project to Rosatom without competition. For two years Hungary argued that the contract was legal because it was only Rosatom that would also provide a ten billion euro loan, and therefore Hungary had no choice. That argument led nowhere.

After two years the Hungarian government switched tactics and claimed that Rosatom was the only provider that would meet Hungary’s needs. As is clear from the documents, the Hungarian government was being coached by Tomasz Husak, the head of EU Commissioner for Internal Market, Industry, and Entrepreneurship Elżbieta Bieńkowska’s cabinet, who “walked Hungarian officials through the ‘main elements’ they should offer.” Polish friends can come in handy for Hungarians.

Once that was taken care of, the only question was what the European Union would ask in return. In the end, Hungary had to promise that in the future it will solicit bids for subcontracts, with the important proviso that they will be European companies. This option was described by Commission officials as a “global political solution.” It was most likely deemed a satisfactory alternative to what would have been the only legally acceptable solution: to proceed with the infringement procedure. Of course, Benedek Jávor is correct when he points out that a solution which overlooks one infringement of the law with the promise of not committing another in the future is “legally weak.”
Will the release of these documents have any further bearing on the future of the Paks II project? Can the decision be reversed? According to Politico, it cannot. However, the documents might have some relevance in the event of legal challenges to the Commission’s approval of Hungary’s state aid for Paks II, another EC decision in favor of Hungary.

One thing is sure: officials of Bieńkowska’s department will fight tooth and nail to defend the decision. Lucia Claudet, spokesperson of the European Commission, in answer to Jávor’s accusations, already denied any collusion between the EC and Hungary and announced that “any conspiracy theories or allegations of undue interference are unfounded.” According to Claudet, everything went according to the normal rules of dialogue between a member state and the European Commission.

In Jávor’s opinion, this agreement will have serious consequences for Hungary in economic terms. Originally, the Orbán government had negotiated a 40% Hungarian share of subcontracts but if, as Hungary has promised the European Union, 55% of subcontracts will be decided in open tenders, the Hungarian share might be very low. As Jávor figures, Rosatom will insist that the majority of work be done by the company, and therefore Hungarian firms will be squeezed out of the “investment of the century.” The real winners will be Rosatom and multi-national companies. Unless, as often happens, the bidding process is rigged.

What a bonanza! Hungary will have a nuclear power plant it doesn’t really need, a burdensome long-term debt load, and very little in the way of a short-term boost to the Hungarian economy. All in all, a wonderful investment.

November 26, 2017

The strangest encounter: Vladimir Putin in Budapest

I believe that in the past I’ve called attention to the troubling fact that the Hungarian public more often than not learns from foreign sources what its own government is up to. This is definitely the case when it comes to Russian-Hungarian relations. The other country that comes to mind is Iran, and I suspect that in both cases there are some weighty reasons for the secrecy.

We have known for some time that Russian President Putin, a black belt judo champion and honorary chairman of the International Judo Federation, was planning to attend the World Judo Championship held in Budapest on August 28, but it was only from a statement issued by the Kremlin that we learned a few hours before Putin’s arrival that it was “at the invitation of Hungarian Prime Minister Viktor Orbán [that] the head of the Russian state will visit Budapest.” It looks as if, for one reason or another, Orbán didn’t want to publicize the fact that the World Judo Championship was, at least in part, an excuse for the Russian president to make his second visit to Budapest this year. Since 2010 this is Putin’s seventh visit to Hungary. As Péter Krekó, director of Political Capital, noted, Putin visits only dictatorships like Belarus and Kazakhstan that often.

While Putin was in Hungary the Senate of the University of Debrecen bestowed upon him the title of Civis Honoris Causa. Because of Putin’s busy schedule, the honorary degree was handed to him in Budapest. The university awards this degree to individuals for outstanding public and/or artistic achievement. Individuals who contribute in some way to the reputation or the financial well-being of the university are also eligible. Putin allegedly received the award because “both the Hungarian government and the Russian Federation intend to assign an important role to the University of Debrecen in the Paks2 project.” There is apparently an arrangement with Rosatom that the university will create a center to train Hungarian engineers in atomic technology.

The University of Debrecen gave the first such honorary doctorate in 2012 to George Habsburg, the grandson of Charles IV, the last Hungarian king. In 2016 the recipient was Rudolf Schuster, the former president of Slovakia. A couple of days ago László Majtényi, head of the legal think tank EKINT, sarcastically inquired when the university will bestow its fourth Civis Honoris Causa to Recep Erdoğan.

Viktor Orbán and Vladimir Putin at the World Judo Championship

Some time ago the Hungarian government promised 3.5 billion forints for the restoration of Russian orthodox churches. This pleased Putin to no end, but little work has been done on the buildings. A few days prior to Putin’s arrival the government decided to expedite matters by buying the old orthodox church in Tokaj from the municipality for 313 million forints. After this purchase the Hungarian Diocese of the Russian Orthodox Church will be able to begin restoration work on the building. The money for the restoration also comes from the Hungarian government.

Political scientists who got together yesterday to discuss Russian-Hungarian relations pretty much agree on what Russia’s foreign policy aims are and how it uses Hungary to achieve its goals: weakening of the European Union and NATO, achieving acceptance of the annexation of Crimea, and ending sanctions against Russia. But when it comes to the question of Hungarian policy toward Russia, the analysts are stymied, mostly because the Orbán government doesn’t communicate in a transparent manner on the subject. They noted that the relationship between Putin and Orbán seems to be close and friendly, although others are convinced that the great friendship between the two leaders doesn’t really exist and that perhaps there is even friction between the two men.

Szabolcs Vörös of Válasz is one of those journalists well versed in foreign affairs who finds this visit worrisome. He called attention to the fact that no statement was released about the visit on the government website. The only notice on the visit was released on August 28 at 2:00 p.m. by MTI, the Hungarian wire service. It quoted the press secretary of the prime minister, who announced that “after the successful Aquatic World Championships another sports event will begin in the Hungarian capital…. The prime minister on the day of the opening and on the following days will have discussions with sports and state leaders, for example with Marius Vizer, the president of the International Judo Federation; with Vladimir Putin, the honorary president of the International Judo Federation and president of Russia; with Thomas Bach, the president of the International Olympic Committee; and with Kaltma Battulga, the head of the Mongolian Judo Association and president of Mongolia.” Well, if that release isn’t strange I don’t know what is.

There’s no question that the Hungarian government was trying to minimize the visit as much as possible. I am not sure why, but this statement was truly bizarre. Mentioning Putin only after the president of the International Judo Federation and placing his position in the Federation ahead of his political status borders on the ludicrous. The Russian government refused to be a partner in this minimizing game and said that in fact it was the Hungarian government that invited the Russian president to Budapest.

Vörös also noted that the total cost of the Paks project was supposed to be about 12 billion euros, 80% of which, 10 billion euros, would have been covered by the Russian loan. In February, however, during Putin’s last visit, at the joint press conference the Russian president announced that Russia is willing to lend 100% of the cost of the project, “but then we must change certain parts of the contract.” It looks as if these changes have been made because Putin yesterday was talking about a Russian loan of 12 billion euros. Putin has been very eager to get the project underway as soon as possible and has been putting pressure on the Hungarian government, or to be more precise on Viktor Orbán. Some people fear that Putin is in possession of compromising information on Viktor Orbán, which the Hungarian politician certainly doesn’t want to become public knowledge. One thing is sure. Orbán, who before 2010 was a rabid anti-Russian politician, suddenly became a close friend of Vladimir Putin.

Aside from the nagging question of compromising information on Orbán, there is another problem. We know next to nothing about the details of the deal. Who knows what these changes in the contract entail? Why did the two men have to meet, especially since their meeting was extremely short? Why did they arrange this whole charade? We have no idea. In any case, if we can believe Péter Szijjártó, work on the Paks project will begin in January.

August 29, 2017

Viktor Orbán’s friends: Vladimir Putin, Recep Erdoğan, and Ilham Aliyev

Yesterday around noon Moscow time the Kremlin published a short announcement regarding a telephone conversation that had taken place earlier that day. It was brief and to the point: Vladimir Putin and Viktor Orbán “discussed current issues on the bilateral agenda, in particular the implementation of agreements reached during the visit to Budapest by the President of Russia on February 2, 2017. The two leaders also stressed the importance of the construction, carried out by Rosatom State Corporation, of two new power units at the Paks Nuclear Power Plant, as well as joint gas projects.” About half an hour later the news of the telephone conversation was also announced in Budapest. It was even briefer than the Russian version. “Prime Minister Viktor Orbán and President Vladimir Putin held a telephone conversation about current questions of Hungarian-Russian bilateral relations.”

Most newspapers and internet sites republished the short MTI announcement without any comment or interpretation. I found only two exceptions. One was 168 Óra, which was certain that it was Viktor Orbán who called the Russian president “only a few hours after he had returned from the NATO summit in Brussels,” implying that perhaps the topic of conversation wasn’t so much Paks, as the Kremlin communiqué claimed. Perhaps Viktor Orbán reported to Putin on his impressions of the NATO summit.

The other was a longer opinion piece by Gábor Stier, Magyar Nemzet’s Russian expert. Stier is a pro-Russian journalist specializing in foreign affairs. As opposed to 168 Óra, he is certain that it was Putin who called Orbán. Stier might be a great friend of Russia, but even he doesn’t believe that the conversation between the two men was about “current bilateral relations.” Putin visited Budapest only a couple of months ago, and about two weeks ago the two men spent some time together in Beijing at the summit of the Chinese Belt and Road Initiative. Stier also can’t imagine that, now that all the obstacles have been removed to the financing and construction of Paks, the nuclear power plant merited a telephone call.

So, why was such an encounter arranged? Stier believes that the key to the content of the exchange lies in the brief Russian reference to “joint gas projects” which, in Stier’s opinion, is the construction of the “Turkish Stream,” which “would benefit not only Moscow and Budapest but the whole Mediterranean region.” Now that U.S. policy toward Europe is changing and “its relations with Russia may become more pragmatic, there is a chance that Washington will not hinder these plans,” says Stier. In that case, he believes, Berlin will be less antagonistic to the project. Apparently on the same day Putin also phoned Borut Pahor, president of Slovenia, an event that, according to Stier, supports his interpretation of this unexpected telephone conversation between Putin and Orbán. This second telephone conversation, however, was prompted by the twenty-fifth anniversary of diplomatic relations between Russia and an independent Slovenia, which took place on May 25, 1992. I’m therefore less sure than Stier that the phone call had anything to with the pipeline.

Given the paucity of information, all of the above is just conjecture, but the frequency of Putin-Orbán meetings and telephone conversations is striking. So is Orbán’s increasing diplomatic isolation, at least when it comes to Western countries. On the other hand, relations with autocratic countries like Turkey and Azerbaijan are excellent.

Let’s take a look at Turkish-Hungarian relations of late. President Recep Erdoğan was supposed to visit Hungary already in 2016, but the trip had to be postponed because of the Turkish military coup that occurred in July. According to the latest information, the trip might take place soon, to coincide with the opening of the restored “türbe” (tomb) of Gül Baba (d. 1541), a dervish poet and companion of Sultan Suleiman the Magnificent, which is in the hills of Buda.

There was also at least one telephone conversation between the two men that Orbán initiated. Orbán congratulated the Turkish president on his victory at the polls that made him an autocrat for life. In return, Erdoğan suggested bilateral talks in Beijing at the summit. At that time Erdoğan also invited Orbán to Ankara, which Orbán naturally gladly accepted.

Recep Erdoğan in Budapest in 2013

I might also add that while Orbán often justifies his anti-Muslim stance and Hungarians’ unwillingness to have Muslims in their country by reminding the world of the 150-year occupation of the central part of Hungary by the Ottomans, a veritable love affair is going on between the Hungarian and Turkish governments.

Not too many people are aware of the fact that Suleiman the Magnificent (1494-1566) died during the Battle of Szigetvár in Hungary. His body was taken back to Istanbul to be buried, but his heart, liver, and some other organs were buried just outside of Szigetvár. The Battle of Szigetvár is also an important site for Hungarians, who celebrate the heroism of the captain of the fort, Miklós/Nikola Zrínyi/Zrinski, who also died there. In any case, the Turkish government has generously contributed to archaeological work conducted to find the exact location of Suleiman’s burial. For its part, the Hungarian government is planning enormous busts of both Suleiman and Zrínyi. A rather strange way to commemorate the victory of 20,000 invading Ottoman troops over 2,500 Hungarian-Croatian defenders.

Another politician Orbán has warm relations with is Ilham Aliyev, president of Azerbaijan, who visited Budapest in 2014. Two years later Viktor Orbán and his wife paid a visit to Baku, where the two men agreed to repeat their visits to each other’s capitals. This year it is Aliyev’s turn to visit. Mind you, the Hungarian media had to learn from Azeri sources that their president will visit Budapest in October. Aliyev inherited “the throne” from his father in 2003, and he has been president ever since. This spring Aliyev designated his wife, Mehriban Aliyeva, first vice president. She would replace him in the event of his death. In 2016 at Orbán’s suggestion President János Áder bestowed a high state decoration on Aliyeva.

Putin, Erdoğan, Aliev—these are the people Orbán feels comfortable with. And they are are the ones who are willing to visit the Hungarian capital on a somewhat regular basis. A sad commentary on Hungary’s standing in the world of diplomacy.

May 27, 2017

Breaking news: Rosatom was Viktor Orbán’s piggy bank

Lajos Simicska, the former friend of and financial adviser to Viktor Orbán, at last revealed his long-kept secret about the Hungarian prime minister’s plan to buy RTL Klub, the Hungarian subsidiary of RTL Group, on Rosatom’s money, 24.hu reported about an hour ago.

The crucial conversation between Simicska and Orbán took place in 2014, right after the electoral victory in which Orbán’s party again won two-thirds of the seats in parliament. In the course of the conversation, which was mostly about Fidesz’s media program for the next four years, Orbán announced his plan to purchase RTL Klub, the most popular and profitable television network in Hungary. Once it was under his control, he would put an end to the network’s programing. When Simicska expressed doubts about the feasibility of such a move, Orbán wanted to know the approximate purchase price, which Simicska estimated to be about 300 million euros, or 100 billion Hungarian forints. Orbán’s reaction was: “No problem, Rosatom will buy it for me.” It was at this point, Simicska contends, that their friendship came to an end. A week later, when they met again, Simicska told Orbán that he would not be a party to such an undertaking.

Simicska originally told this story in a two-hour interview with Reuters, but the Hungarian businessman stopped the publication of the interview once he realized that Reuters refused to include this crucial part of his interview.

Viktor Orbán  never bought RTL Klub, but about three months after the conversation with Simicska took place the Hungarian government began its frontal attack on RTL Klub, announcing its intention to levy heavy taxes on the media based on advertising revenues. The move was structured in such a way as to specifically target the German-owned RTL Klub. The idea was to force its owners to part with the financially squeezed Hungarian subsidiary. Orbán’s plans were foiled by the German company’s forceful resistance.

Russian-Hungarian exchange of top security information

After a lot of suspense, the fate of Paks II, to be built by Rosatom and financed by the Russian government, has been settled. The European Commission threw in the towel. Admittedly, there is still a possibility that the Austrian government will take the case to the European Court of Justice as it did with Great Britain’s Hinkley Point Nuclear Power Plant. The British case is still pending, and a verdict against Hinkley Point might have some bearing on Paks II. But that is a long shot.

Although the specific points of the final agreement on Paks II are of great interest, here I would rather look at another, possibly nefarious instance of Russian-Hungarian relations: an agreement between Russia and Hungary “on the mutual protection of classified information.” News that this agreement would come into force on April 1 was announced on March 3, 2017 on the last pages of the Official Gazette. It was discovered by the staff of Magyar Nemzet. Interestingly, with the exception of very few media outlets, this agreement has been ignored.

What is even more surprising is that the agreement itself was signed in September 2016 without anyone noticing it. Bernadett Szél (LMP), for example, who is a member of the parliamentary committee on national security, had no inkling of the document’s existence. This is what happens when the opposition parties lack the resources to hire a research staff.

Of course, the agreement is not especially significant by itself because it only defines rules and regulations governing the transfer of secret information between the two countries. What is of considerable interest, however, is the extent of the working relationship between the Russian and Hungarian national security forces or, as the agreement states, “the competent authorities responsible for the implementation of [the] Agreement.” These “competent authorities” are the National Security Authority in Hungary and, in Russia, the Federal Security Service of the Russian Federation (FSB), the successor to the KGB of Soviet times.

The agreement reveals that top secret documents change hands between Hungary and Russia which cannot be shared by a third party. How many such documents are we talking about? The agreement at one point states that “for the transfer of classified information carriers of considerable volumes of classified information, the authorized bodies shall, in accordance with the laws and other regulatory legal acts of their States, agree on the modalities of their transportation, itinerary and escorting method.” There are also detailed instructions about the destruction of certain secret documents, including the proviso that “classified information carriers marked Szigorúan titkos!/Совершенно секретно (Top secret) shall not be destroyed and shall be returned to the authorized body of the originating Party, when they are no longer deemed necessary.” All this indicates to me a close working relationship between the Russian FSB and the Hungarian NSA.

We don’t know, of course, what kinds of top secret documents are being exchanged by the Russian and Hungarian national security agencies. It is certainly not immaterial what kind of information the Hungarian partner passes on to the Russians, especially in view of Hungary’s membership in NATO and the European Union. In fact, Magyar Nemzet specifically asked the Ministry of Foreign Relations and Trade whether the Hungarian authorities gave information about the details of cooperation between Russian and Hungarian national security forces to the European Union and NATO. No answer has yet been received. Bernadett Szél told the paper that she was certain the Hungarians don’t pass any sensitive information on to the Russians and that the European Union and NATO are fully aware of all such exchanges between the two countries. I wish I were that confident that the Orbán government is playing by the book.

Tamás Szele in Huppa.hu is convinced that such an exchange of secret documents greatly favors Russia “because considering the weight and strength of the two organizations, it is hard to imagine the arrangement as one of cooperation between equal partners.” For Szele this means that “we have become unreliable diplomatic partners, surrogates of Russia with whom one cannot candidly negotiate or conclude secret agreements because everything that has been said or written will be in the Kremlin within an hour.” Let’s hope that Szele exaggerates, but as far as I know western diplomats are already worried about the trustworthiness of the Hungarian diplomatic corps. And as Attila Juhász of Political Capital, a political science think tank, said the other day, “the government seemed to have forgotten that Hungary is a member of the European Union and NATO. It replaced a friend with a foe, contemplating idly the growing use of Russian propaganda.”

Hungarian state media spread fake Russian news / Source: Budapest Beacon

There is another danger in this cozy Russian-Hungarian exchange of top secret information, which is the possibility that the Russians disseminate disinformation that may lead the Hungarian agents astray. Given our knowledge of Russian disinformation efforts in the United States and the European Union, I don’t think it is too far-fetched to assume such a possibility. The use of disinformation via the internet is one of Russia’s weapons in the destabilization of Europe.

The far-right Hungarian-language internet sites under Russian tutelage work hard to turn Hungarians against Western Europe and the United States in favor of Russia. This is bad enough. But the real problem is that the Hungarian government media outlets consistently join the chorus of pro-Russian far-right groups, which only reinforces the worst instincts of a large segment of the population. According to a recent study on the attitude of the Visegrád 4 countries toward Russia, “the Hungarian government disguises its pro-Russian stance behind a mask of pragmatism,” but there is reason to believe that the government media’s love affair with Russia is not against the wishes of the Orbán government. The Orbán government’s long-range economic and financial dependence on Russia in connection with the Paks II project further ties Hungary to Putin’s Russia, whose plans for Europe don’t bode well for Hungary either.

March 6, 2017

The men behind Paks II: Günther Oettinger and Klaus Mangold

Today János Lázár triumphantly announced that all of the EU’s questions about the Russian- built and financed Paks II nuclear power plant have been satisfactorily resolved. Hungary is free to begin its mega-investment which, according to most experts, is an unnecessary undertaking which most likely will also be unprofitable.

Coincident with, and not totally disconnected from, this announcement is the political storm brewing in Brussels over the appointment of Günther Oettinger, commissioner for digital economy and society, to be the replacement for Kristalina Georgieva, who in the last two years was EU commissioner in charge of the European Union’s budget and who also served as one of the vice presidents of the commission.

Georgieva’s departure is considered to be a blow to the Juncker administration. She was enticed by the Bulgarian government to leave her job as vice president and corporate secretary of the World Bank. After two years in Brussels she is returning to Washington as the chief executive officer of the International Bank for Reconstruction and Development and the International Development Association. Most people interpret her move as a criticism of the Juncker Commission’s way of doing business. According to politico.eu, “Juncker’s Commission will undeniably be weaker without Georgieva. But what makes her departure worse is that Juncker is compounding the loss by promoting Günther Oettinger to take her place.”

Oettinger has been in Brussels for a long time. Between 2010 and 2014 he was commissioner for energy. When Germany nominated him again in 2014, Jean-Claude Juncker gave him a lesser post as commissioner for digital economy.

Oettinger is known to be a man who says and does outrageous things. Back in 2000 he broke into the banned “Deutschland, Deutschland über alles” at a celebration of his German nationalist fraternity. A few weeks ago at a business conference he described a delegation of Chinese officials as having “their hair brushed from left to right with black shoe polish.” When talking about Merkel’s liberal social policy, he joked about “compulsory gay marriage.” First, Oettinger insisted that he had nothing to apologize for but, I guess under pressure from his government, he admitted that the words he used “have created bad feelings and may even have hurt people.” He is described as curt and comes across as “unintellectual and unserious—more likely to obsess over cars or football than trade deals or European Union directives.”

It was Günther Oettinger who as commissioner in charge of energy matters gave the preliminary go-ahead to the Paks project in December 2013. The incoming Juncker Commission, on the other hand, decided on a reexamination of the whole project. Although Oettinger was no longer officially responsible for energy, according to all available information he worked hard in the background to promote Orbán’s pet project.

The second player in today’s story is Klaus Mangold, a wealthy German businessman and a former member of the board of automaker Daimler. Mangold, who is sometimes referred to as “Mr. Russia” in the German press, runs an industry lobby for stronger economic ties with Russia and so has been lobbying against Western sanctions on Russia.

According to some sources, Mangold has had a long-standing interest in the Paks II project. In fact, he may well have been the person who initiated it, acting as an intermediary between Putin and Orbán. 444.hu found proof of Mangold and Orbán meeting in December 2012, “reviewing German-Hungarian and Hungarian-Russian economic relations, particularly questions of energy and its financing,” which would indicate that the meeting might have included a discussion of enlarging Paks with Russian help. So, argues 444.hu, negotiations about Paks began as early as December 2012. Subsequent talks between Russia and Hungary were conducted in secret. It was only in January 2014 that the Paks contract was signed.

Günther Oettinger may no longer be the commissioner in charge of energy matters, but he hasn’t given up his role as a secret backer of the Paks II project. Nowadays, he attends conferences in Budapest on digital economic matters and uses them as opportunities to discuss matters concerning Paks with Viktor Orbán. One of these trips took place on May 19, just before János Lázár’s trip to Brussels and Russian Foreign Minister Sergey Lavrov’s visit to Budapest. This time Oettinger arrived on Klaus Mangold’s private jet. 444.hu learned that there was a dinner meeting attended by the two Germans and the Hungarian prime minister.

Klaus Mangold, Viktor Orbán, and Günther Oettinger

Klaus Mangold, Viktor Orbán, and Günther Oettinger in Budapest, May 19, 2016

That Oettinger flew to Budapest on Klaus Mangold’s private jet merited further investigation, but the reporters of 444.hu got nowhere with either the European Commission or Mangold’s office. A few days later Benedek Jávor, a member of the European Parliament (Group of the Greens/ European Free Alliance), wrote a post in which he expressed his disapproval of an EU commissioner lobbying for a project that is no longer in his portfolio. And there is another problem. Mangold is not a registered lobbyist, yet Oettinger met him despite EU guidelines forbidding meeting with unregistered lobbyists. Then, there is the question of the trip itself. Did Oettinger pay for it or was it a gift? According to EU rules, a commissioner cannot accept any gift over 150 euros.

So, Jávor began an investigation of his own. He wrote a letter to the European Commission:

According to an article published on 21 June 2016 in the Hungarian online magazine 444.hu, Commissioner Oettinger met with Hungarian Prime Minister Viktor Orbán and German consultancy manager Klaus Mangold on his trip to Budapest, on 19 May 2016. During this meeting, the nuclear project Paks II was allegedly discussed.

Klaus Mangold currently leads a German consultancy firm, and used to be Chairman of the ‘Eastern Committee of the German Economy’. He is an important mediator between German firms and the Russian political scene. According to the Hungarian newspaper Figyelő, Mangold had already been a mediator in the previous 2013 Paks case. It has been reported that Commissioner Oettinger arrived in Budapest on Mr. Mangold’s private plane.

This meeting took place only a few days before Hungarian Minister János Lázár, of the Prime Minister’s office, came to Brussels to discuss the Paks II project.

We therefore ask the Commission the following:

  1. By what means did Commissioner Oettinger travel to Budapest?
  2. What information does it have about the content of this meeting?
  3. Has it investigated the possible use of state subsidies for the Paks nuclear project (SA.38454 (2015/C)(ex 2015/N)) and/or the infringement procedure in which the Commission objects that no public procurement preceded the Rosatom mandate discussed at this meeting?

Oettinger took his sweet time answering (on November 3, 2016):

  1. Due to the lack of commercial flights to arrive in time for the meeting with Prime Minister Orban, the Commissioner responsible for Digital Economy and Society joined Mr Mangold’s private plane.
  2. The Commission had been invited to a conference in Budapest about digitisation of industry and automated driving which was opened by Prime Minister Orban. Prime Minister Orban and the Commission met in order to prepare the conference and to discuss the setting up of national initiatives for the digitisation of industry (as outlined in the communication by the Commission of 19 April 2016(1)).
  3. The Paks II nuclear project was not discussed.

Two days ago the story was finally out in the open. Eszter Zalan of euobserver.com wrote an article inquiring whether Oettinger broke any ethics rule by traveling on a private plane of a German businessman with strong Kremlin ties. The article points out that on May 18 there was a choice of four commercial flights from Brussels to Budapest, and therefore Oettinger is simply not telling the truth.

In a way Oettinger’s flight with Mr. Russia is of secondary importance. What is much more worrisome is the visit of Oettinger and Mangold to Budapest in order to advise Viktor Orbán on how to handle a commission probe into the Paks project. But, as often happens, the use of the jet makes bigger waves than the less tangible accusation of foul play on the part of a pro-Russian lobbyist and a pro-Russian prime minister.

Oettinger, like so many people in such situations, keeps giving contradictory statements. By now his story has changed somewhat. In his latest version the Hungarian government paid for his plane ride. “We did not explicitly ask HU [Hungary] about their payment—neither for plane nor for hotel they also offered,” he said. He claims that “governments often offer transport & accommodation for missions of Commissioners when they invited for meeting, conference,” he tweeted, adding “I was invited to a dinner with a Prime Minister to discuss EU digital policies. It is my job to explain & discuss.”

The European People’s Party’s reaction to the Oettinger story is what it always is when one of their own is being questioned about a wrongdoing. Manfred Webber, who is the leader of the EPP group, told journalists that he had “complete confidence” in Oettinger. He called him a “very experienced commissioner” and said there was “no doubt at all whether Günther Oettinger is doing a good job.” The Socialists and the Democrats are naturally less charitable. They called on Oettinger “to clarify his unfortunate actions and unethical behavior.”

444.hu not undeservedly feels proud that one of its investigative pieces was picked up by the international media. And it is still on Oettinger’s case. Its reporters discovered that the EU commissioner paid a visit to Budapest during the past weekend and that he was planning to return to the Hungarian capital today. The occasion for Oettinger’s visit this past weekend was apparently a party given by the Strabag Construction Company. According to 444.hu, this trip was not recorded on the commissioner’s calendar. The occasion for his latest trip is another conference on digital cars and, again, he has a planned meeting with Viktor Orbán. Isn’t it amazing how the busy Hungarian prime minister has so much time for and interest in digital cars? All in all, Günther Oettinger’s activities in Hungary are highly suspicious, and they should be seriously investigated. However, most likely nothing will happen. Apparently he has the strong support of Chancellor Angela Merkel.

November 17, 2016

After an attack on the media, an assault on Energiaklub

Today I will report briefly on some new developments that may add to our understanding of the current political climate in Hungary.

Still about the media

To continue with the sad state of the media. The announcement that Népszava, the daily that proudly calls itself a “szociáldemokrata napilap,” was sold couldn’t have come at a worse time, only a few days after the demise of Népszabadság. The Swiss Marquard Media, which bought the paper, is no stranger to Hungary. It has been present in the Hungarian media market ever since the 1990s. Currently it owns Playboy, Runner’s World, Men’s Health, JOY, and InStyle. In Poland Marquard publishes Cosmopolitan, Esquire, Harper’s Bazaar, and Playboy. In addition, the company owns several magazines in Germany, Austria, and Switzerland.

Népszava will be an odd man out in Marquard’s portfolio, but we should keep in mind that in the 1990s Marquard owned Magyar Hírlap, which in those days was my very favorite Hungarian daily. At that time the editor-in-chief of Magyar Hírlap was the same Péter Németh who is heading Népszava’s editorial team today. He assures us that Jürg Marquard, whom he knows, would never in his life behave the way the private equity financier Heinrich Pecina has. Népszava had some very difficult times in the past, and one can only hope that the paper’s future will be ensured by this purchase. With the disappearance of Népszabadság, Népszava is now the only daily on the left. Mind you, when it comes to their attitudes toward the Orbán government, I see very little difference between the social democratic Népszava and the conservative Magyar Nemzet.

fedel-nelkul

Remaining with the topic of the media. The editorial board of Népszabadság made an absolutely brilliant move. The editorial team of the paper and regular outside contributors decided to write articles for the next issue of a weekly paper called Fedél Nélkül (Without Shelter), which is produced by homeless people and sold on Budapest street corners by about 1,600 of them. The journalists and contributors will take care of the added expenses, and all income from the sale of the papers will go to the licensed distributors of Fedél Nélkül.

There is a new enemy: The Energiaklub

Energiaklub is a well-established NGO concerned with environmental issues and alternative energy sources. It is a fierce opponent of building a new nuclear power plant in Paks. On September 29, 2016, the Baranya Megyei Kormányhivatal, a regional administrative arm of the government, accepted Paks II’s version of the environmental safety of the project. However, some key issues concerning the project are still questionable, and some of the government’s safety claims have no basis in fact. This is at least what Energiaklub and Greenpeace claim. These two organization will appeal the decision. Energiaklub’s experts “are convinced that Paks II will be a polluter” and that “it is dangerous and expensive.” In their opinion, “both in economic and social terms the expansion of nuclear energy is a dead end.”

On October 13 representatives of the National Tax and Customs Administration (NAV) appeared at the offices of Energiaklub. Without much ado or explanation they packed up all documents related to one of Energiaklub’s projects called “Answer to climate change, local climate adaptation.” The leadership of the organization is convinced that “this is the second act of the Norwegian affair” because this particular project is funded by Norway, Iceland, and Lichtenstein. Orsolya Fülöp, policy director of Energiaklub, believes that NAV’s unexpected visit is not so much against Energiaklub as against Norway.

I, as an outsider, see it differently. I see a connection between Energiaklub’s decision to appeal the verdict of the Baranya Megyei Kormányhivatal on the environmental safety of Paks II and NAV’s sudden interest in one of the organization’s projects. Moreover, the appeal was not the Energiaklub’s only “sin.” They have been calling attention to the corruption that surrounds the Paks II project. According to one of the organization’s energy experts, at least 10% of the projected €12 billion will end up in private pockets. My guess is that the Orbán government had enough of this pesky organization’s criticism of the prime minister’s pet project. Or perhaps they are planning to kill two birds with one stone.

Hungarians and freedom of the press

The Publicus Research Institute came out with a poll* conducted between October 11 and 13 which asked 1,000 people about their attitude toward freedom of the media and the suspension of the publication of Népszabadság. The results are surprising. Almost 90% of the Hungarians surveyed consider the existence of an independent press very important and 85% had heard about the suspension of Népszabadság. Two-thirds of the people think that Fidesz has a substantial influence on the media. Moreover, they said that since the collapse of the Kádár regime, government power over the press has never been stronger.

Another surprise is that 43% of the adult population read Népszabadság more or less regularly. Even 37% of Fidesz voters did so. Naturally, MSZP voters were the most faithful readers of the paper (57%), but Jobbik voters were not far behind (47%). Another interesting finding is that more readers were between the ages of 18 and 44 than over 45.

The great majority of the people are convinced that Népszabadság had to be silenced because it criticized the government and Fidesz politicians, or because Fidesz limits the freedom of the press in general, or because it was an opposition paper. Only 22% believe that the reason for the shuttering was financial. So, there is hope.

*The poll was taken for Vasárnapi Hírek. The detailed results can be found on the website of the Publicus Research Institute.

October 15, 2016