Energy policy dominates press conference after Orbán-Putin meeting

February 3, 2017

The news conference between visiting Russian President Vladimir Putin and Hungarian Prime Minister Viktor Orbán began after a 45-minute delay on Thursday afternoon in Budapest. In the press conference — at which, during the Hungarian press segment, only two pro-government news outlets got a chance to ask questions — it was announced that several bilateral agreements had been signed between the heads of state. “Hungary’s gas needs are ensured until 2021,” Orbán said, adding that the Hungarian government had decided to renovate Russian Orthodox churches within Hungary. Putin announced that an agreement had been reached on the renovation of Budapest’s metro cars to take place in Russia, adding that Russia is ready to extend a loan for the entirety of the EUR 12 billion Paks nuclear facility project.

Viktor Orbán opened the delayed press conference, thanking Vladimir Putin for his visit to Hungary “in the name of Hungary and the Hungarian people. A visit from the Russian president is always an honor for us,” said the prime minister, adding that “long and successful” negotiations had taken place. He emphasized that “at the center of discussions were economic relationships. Hungary is pursuing open and transparent relations with Russia.” Orbán added that the two countries review their relations each year, and last year he had traveled to Moscow for that purpose, and Putin’s visit reciprocates that gesture. He announced that they had signed “documents concerning regional cooperation” including a “foreign affairs consultation plan,” and that Hungary had opened a consulate in the Russian city of Kazan.

With the modification of earlier contracts, “Hungary’s gas needs are ensured until 2021,” Orbán continued. All related contracts had been signed, and the leaders had agreed to begin negotiations on gas services for after 2021 as well.

They also negotiated on nuclear cooperation, continued Orbán, agreeing that “most of the obstacles had been overcome.” There was, however, an open question for which they were awaiting a European Union decision. Preparatory works should begin this year, he said, and construction in 2018, but the Prime Minister did not mention the word “Paks.”

The results of economic cooperation had come in “a difficult international environment,” Orbán said. “In the Western half of the continent, anti-Russian politics came into fashion. In this environment, we had to protect our economic relationships.” Commerce between the two countries had declined “in spite of all of our efforts,” resulting in USD 6.5 billion in damages to the Hungarian economy. Orbán expressed his hopes that “soon we will greet good Russian-European cooperation.”

“We granted scholarships to each others’ students,” he continued, adding that the government had decided to renovate Russian Orthodox churches in Hungary.

In the past two years, Hungarian food industry investments have been created in Russia, Orbán said. “I would like to continue all of this,” he continued, adding that the Hungarian water industry would also receive investment and development opportunities in Russia.

On bilateral foreign affairs, Orbán believed that the heads of state “saved and protected everything we could in Russian-Hungarian relations.” From the perspective of economy and politics, the negotiations were fruitful, he said in closing.

Vladimir Putin, thanking Orbán for the invitation, said the negotiations had heavily emphasized economic development. The Foreign Affairs ministries of each country have close relations, he said, but inter-country commerce had been cut in half in the past two years, which was unacceptable.

Cooperation will continue in the energy sector, Putin continued. The construction of two new reactors at the Paks nuclear plant will be an investment of some EUR 12 billion which will double Hungary’s nuclear output, he said, adding that the project would create some 10,000 jobs, and Russian energy company Gazprom would also be in on the deal.

Putin drew attention to the fact that a significant portion of crude oil and natural gas in Hungary comes from Russia, and Hungary is an important transit country to the West. He highlighted plans by the Hungarian Oil and Gas Industry LLC (MOL) to increase oil production in Siberia.

Putin announced that the renovation of Budapest metro cars would take place in Russia, and an agreement had been reached to cooperate on train car manufacture in a third country. Regional cooperation would be strengthened between the 19 Hungarian counties and the more than 50 Russian federal entities, as well as further cooperation in the areas of humanitarian and education issues. Putin also placed a strong emphasis on the teaching of the Russian language in Hungary.

The topics of eastern Ukraine and Syria had been raised during the talks, Putin said. “We must unite our efforts against international terrorism,” he said, adding that he would like to act “in the interests of solving the European migration crisis.”

At the end of his speech, Putin thanked Orbán for the hospitality and the “fruitful negotiations.”

“Russia and Hungary are moving in a separate dimension,” said Orbán to a question from Magyar Televizió. He believes that Hungary can act in Syria to protect Christians there. “We consider the protection of Christian communities everywhere in the world important,” he said.

“The world is the process of a significant transformation,” he said, which was leading to the creation of a stable and balanced relationship between Russia and the European Union.

Orbán said he had not discussed renegotiating terms of a Russian loan for the Paks project. “We have an agreement with Russia, it’s a good agreement,” and the government would like construction to begin as soon as possible.

According to Orbán, Hungary would like to diversify its gas supplies in response to the uncertain situation in Ukraine. It would be good, he said, if the “undead” South Stream pipeline would “come back to life.” He added that there is a connection with Slovakia, through which natural gas could come to Hungary.

Putin added that through the use of the East Stream or the Turkish Stream, Russian gas “will safely arrive on the Hungarian market.”

Russia “planned to supply 80 percent” of the EUR 12 billion Paks investment mentioned above through a state-owned bank, but Russia would be willing to give a loan for the entire sum, in which case they would simply have to renegotiate the agreement, he said.

Putin claimed that Ukraine provoked the incident in Donbass last Friday. The Ukrainians penetrated 100 meters into separatist territory, he said. He believes that Ukrainian leadership needs money, which they can get by presenting themselves to the West as the victim of aggression. He said the Ukrainian government, during the American presidential campaign, “clearly favored one candidate,” and that “Ukrainian oligarchs” supported that candidate financially. He added that social and economic policy had “failed in Ukraine,” and Ukrainian leaders wanted to solve these problems by fueling the conflict. The Ukrainian government does not wish to abide by the Minsk Protocol, he said, but he hopes that “sober Ukrainian forces will not allow” the escalation of the situation in east Ukraine.

The Ukrainian prime minister recently traveled to Hungary, said Orbán, who agreed with Putin that the only solution to the Ukrainian-Russian conflict was the observance of the Minsk Protocol. Orbán said he believes it is in the interests of Hungary that “Ukraine be a stable and successful country.” The Minsk agreements had a positive impact on the lives of Hungarians in Ukraine as well, since this “guarantees the democratic rights of minorities.”

Responding to Russian state television station Telekanal Rossiya, Orbán said it is important for Hungary that raw materials from Russia reach Hungary “under any circumstances.” An agreement had been reached to that end, “and the president has guaranteed it,” Orbán said. Construction of the Turkish Stream toward Hungary “interests us,” but gas supplies coming from the north would also interest Hungary “if it doesn’t get gas from anywhere else.”

Hungary today exists in a “very unfriendly environment,” Orbán said. “Hungary has established its high capacity border crossing in the direction of Croatia and Romania,” he said, but neither of the two EU members had built infrastructure necessary for the delivery of natural gas to or from Hungary. “Hungary today is standing under an energy block coming from the south,” he said, adding that “diversification is a good thing, but if only we do it and not other EU countries, then unfortunately the earlier unilateral system of relations stays in place.” He emphasized that the Hungarian-Russian energy agreement is of key importance.

Hungary is a stable, solvent partner, and Russia too has an interest in the smooth delivery of oil and natural gas, added Putin, who believes that “these are purely economic questions” which don’t depend on political issues. “We are ready for anything, we only need guarantees. If they execute our plans, everyone will be satisfied and there will be energy security on the continent,” he said, closing the press conference.