View from Budapest: The status quo might just do

Hungary will certainly oppose additional sanctions, but it is unlikely to veto a prolongation.

Throughout the past few months, the refugee crisis and “migrant quota referendum” dominated Hungarian media and public discourse, putting less immediate issues on the back burner. Even the latest prolongation of EU sanctions against Russia in June received little public attention.

While the Fidesz government reiterated its long-held position, shared by the extreme right Jobbik party, that it considered sanctions both useless and harmful, it again chose not to veto the decision in June. It has, however, repeatedly stressed over the past year, both toward Brussels and in high-level meetings with Russia, that it opposed the automatic prolongation of the sanctions and that their actual impact and contribution to the implementation of the Minsk agreement should be reviewed at the highest political level. The prospective discussion at the European Council meeting in October is therefore a welcome development for the government.

Russia’s counter-sanctions have resulted in losses for Hungary’s agricultural producers, amounting to $4-4.5 billion so far, according to government estimates. But this has not stopped Budapest from deepening ties with Moscow. Indeed, meetings between President Putin and Prime Minister Orbán, and between Foreign Ministers Lavrov and Szijjártó are now regular; the Hungarian government has increased cooperation with Russian regions; and it supports the development of business ties in areas unaffected by the sanctions, even including joint projects in third countries. Hungary also managed to prolong its gas contract with Gazprom until 2019, and it is now expected that the government’s highly contested decision to contract Rosatom for the extension of Hungary’s nuclear plant in Paks will get a green light from the European Commission.

As Russia’s relations with the West have worsened following its bombings in Syria, some member states are considering widening the sanctions. The Hungarian government, however, would certainly oppose additional sanctions – and it would not be alone in that. Ideally, Budapest would like to see the sanctions gone and business back to usual after January 2017. In the current context, though, this is not likely to happen, with several member states, among them Poland – Hungary’s closest ally in the EU – staunchly opposed to their phasing out.

As the above picture illustrates, the current sanctions regime was no obstacle for the Orbán-government to advance its Eastern Opening toward Russia, and it is content with how bilateral relations are developing. For this reason, the Orbán government will likely concede to the prolongation of the sanctions as long as no new elements, especially on investments from Russia, are introduced. Of course, it will still continue to question if they have the desired impact.

Nevertheless, vetoing a prolongation would bring little gains to the Hungarian government in its relations with Russia, but it could harm ties with Poland – something Prime Minister Orbán is unlikely to risk now.

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.


European University Viadrina

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