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As the European Union seeks to impose sanctions on Russian oil in response to the war in Ukraine, Hungary has emerged as one of the biggest obstacles to the unanimous support needed by the bloc’s 27 member states.
European Commission President Ursula von der Leyen last week proposed a gradual cessation of imports of Russian crude oil within six months and refined products by the end of the year, to lift Europe from its dependence on Russian fossil fuels and to cut off a lucrative source that undoubtedly helps fund Russia’s war.
But Hungary’s nationalist government – one of the most friendly to Moscow in the EU – insists it will not support any sanctions aimed at banning Russian energy exports. Hungary is heavily dependent on Russian oil and gas and says an EU oil boycott would be a “nuclear bomb” for its economy and destroy a “sustainable energy supply”.
Von der Leyen made an unexpected trip to the Hungarian capital on Monday, May 9, for negotiations with Hungarian Prime Minister Viktor Orban in an attempt to salvage the proposal, but no agreement has yet been reached.
Here’s what you need to know about the talks and what comes next:
What is Hungary saying?
The Hungarian government has insisted it will block any EU sanctions proposal involving Russian energy, calling it a “red line” that runs counter to Hungary’s interests. Hungary gets 85 percent of its natural gas and more than 60 percent of its oil from Russia.
Orban, widely regarded as one of Russian President Vladimir Putin’s closest allies in the EU, has reluctantly backed previous EU sanctions on Moscow, including an embargo on Russian coal. But he has argued that such moves hurt the bloc more than Russia.
Since taking power in 2010, Orban has deepened Hungary’s dependence on Russian energy, saying its geography and energy infrastructure make it impossible to give up Russian oil.
“We said that sanctions on coal are fine because they do not affect Hungary; “But now we have really reached a red line, a double line, because the oil and gas embargo would destroy us,” Orban said in an interview on Friday, May 6th.
The landlocked country has no seaport to receive global oil shipments and must rely on pipelines. Plus, a major program of the Hungarian Government to reduce utility bills depends on the relatively low cost of Russian fossil fuels and is a key factor supporting Orban’s domestic political support.
Transforming Hungary’s oil refineries and pipelines to process oil from non-Russian sources would take five years and would require massive investment, Orban said. This would further boost high energy prices, leading to closures and unemployment, he added.
Is there a chance for compromise?
In addition to Hungary, Slovakia and the Czech Republic have been seeking for years to give up Russian oil. The European Commission has said it is ready to help countries that are particularly dependent on Russian oil.
“We recognize that Hungary and other landlocked countries with significant energy dependence on Russian oil supplies are in a very specific situation that requires us to find specific solutions,” a Commission spokesman said on May 10. European, Eric Mamer.
Mamer said Hungary had “legitimate concerns” about oil supplies and that a Russian oil disruption could include “differentiated timelines corresponding to different country-specific situations”.
“This is definitely one of the possibilities because obviously if you are talking about investing in improving infrastructure, you need time,” Mamer said.
He did not specify which countries could be offered the delayed implementation of an oil embargo.
In a Twitter post on Monday, January 9, after her meeting with Orban, Von der Leyen said the discussion had been “useful in clarifying issues related to sanctions and energy security” and that progress had been made, but “Further work is needed.”
French President Emmanuel Macron spoke with Orban on Tuesday (May 10th) about the “guarantees” needed for some member states, such as Hungary, which “are in a very specific situation regarding the supply of pipelines from Russia,” the office said. of the French president.
What should Hungary gain?
Blocking the sanctions package could be used as leverage in a separate conflict between Budapest and the EU.
The bloc has suspended some funding for Hungary’s recovery from the pandemic because it has seen insufficient anti-corruption measures and has also launched a process to stop further support for breaches of EU rule of law principles.
Hungary has been accused of backtracking on democratic values by exercising excessive control over the judiciary, stifling media freedom and denying the rights of LGBT people.
Orban’s government denies the allegations and argues that the EU sentences are politically motivated.
But with Hungary’s economy facing high inflation and a huge budget deficit, it will need that EU money for an economic recovery.
As EU officials negotiate with Hungary to win its support for sanctions on Russian energy, release of held funds can serve as a shopping tool./rel
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