X
    Categories: Uncategorized

Waiting for Putin: Interview with Péter Szijjártó, Hungary's Minister for Foreign Trade and Foreign Affairs

Translation of interview with Péter Szijjártó, Hungarian Minister for Foreign Trade and Foreign Affairs, appearing in the February 5th edition of weekly business news magazine Figyelő under the title “Waiting for Putin” (“Putyinra várva”).

  • BMW will not build a plant in Hungary Peter Szijjarto tells Figyelo
  • American automotive industry companies are investing in Hungary, the announcement will be made in a few weeks promises the Minister for Foreign Trade and Foreign Affairs.
  • Putin’s program has been prepared.  He is meeting with the head of government (Viktor Orbán) and the president of the Republic (Janos Ader).
  • New names have been added to the Russian embargo black list.

What was served for lunch during the Chancellor’s visit?

Fish.  Which I also like because a steak makes it impossible to work in the afternoon.

The only reason I ask is because judging from the official account that might have been the most exciting part of the meeting . . . 

The Prime Minister has met with the German Chancellor on countless occasions over the past eight years.  I was present at all of them, and for this reason can say in clear conscience that there is a good personal connection between the two regardless of whether from time to time there are open questions regarding this or that.  The mood of this meeting was also very friendly.

And yet it was obvious at the press conference when Viktor Orbán explained his position on illiberal democracy, Angel Merkel grimaced.

Like the press conference, this subject also came up during the plenary meeting and was closed  in a little over a minute.  The Prime Minister also said that the different countries have different interpretations of democracy, and obviously none of us have the right to impose that on another country.

Was there any discussion of the political opposition or the role of civil society during those few seconds?

No, that was another subject, but it was only briefly touched on.  The Chancellor emphasized the importance of civil organizations and the responsibility that comes with a two-thirds parliamentary majority.  The Prime Minister on the other hand said that we consider civil organizations to be a n important part of society, but that we expect the same transparency and lawful use of public monies from them as any other organization.

Did Merkel react to this?

No.

After this will there be any progress in the Norwegian Civil Fund matter?

That entirely belongs to the competence of the Office of the Prime Minister, considering that we are talking about the use of communal resources.

Merkel noted that the German economy appreciates a predictable environment.  In light of this are any new German investments expected, say on the part of BMW?

There are 6000 German companies here which employ 300,000 Hungarians.  Since 2010 EUR 6 billion worth of German investment has arrived to our country.  In this way German investment has grown to nearly EUR 20 billion, which accounts for one-quarter of total investment.  This is proof that Hungary is a good investment environment within the European dimension as well (sic).  As for whether we operate reliably is demonstrated by the fact that in 2013 Hungarian exports to Germany were a record  EUR 20 billion.  This amount was exceeded during the first 11 months of 2014: EUR 21.6 billion.  Of course there are always matters that are underway, like now for example the EKAER about which last Friday we agreed with the 50 largest German investors.  We are always flexible in these matters.  With regard to BMW, I met with them in Munich in December and they made it clear that they do not presently plan to increase production capacity in Europe.  Hungary on the other hand is BMW’s “invisible factory” since they have enough suppliers here to virtually constitute a factory in terms of capacity.  And they are pleased to expand this.

What changes are expected to be made to EKAER?

We extended the trial period through the end of February.  The question will be taken up again next Wednesday at the government meeting.  We will summarize our experiences, and we will see what solutions are possible.

Can freight forwarding companies calculate with the elimination of some of the burden?

They are not the only ones affected but the large manufacturing companies as well.  And since Hungary wants to become a center for European production, we design every regulation so as not to endanger this objective.

What weight was attributed to the question of special taxes over the course of the meetings?

During the plenary meeting issues were raised concerning parts of the structure of the Hungarian economy, but specific issues were not mentioned.

What about (RTL Klub owner) Bertelsmann and the advertising tax? 

Independent of the current negotiations, we have received submissions from the European Commission in this matter, and it is in our interests to conclude through negotiations every European dispute through compromise.   If it is possible here, we will endeavor to do so.

Was there any mention during earlier negotiations with the Bertelsmann group of lightening their news coverage?

I did not personally participate in these negotiations, but I would think it strange and be surprised if there was mention of this.

There was a twenty minute private discussion followed by an hour long plenary meeting devoted mostly to a discussion of the Ukraining-Russian situation, because there were differences in points of view.  Or was it the case that it was necessary to exchange a lot of information?

The long discussion was necessitated by the fact that the situation is very difficult.  If we look at the data, we see that the events taking place in Ukraine and their affects, the sanctions and the embargo has a very serious and disadvantageous affect on the European economy.  During the first eleven months of last year EU exports were EUR 21 billion less to Russia and the Ukraine then the previous year.  If we just look at Hungary, we suffered a 14.2 percent decrease in exports to Russia and a 12.1 percent decrease in exports to Ukraine.  That represents a loss of USD 700 million worth of exports.  There is only one data that has moved in a positive direction: American-Russian trade increased 8 percent during this period due to a 15 percent increase in Russian imports.  Europe is not interested in a continuation of the conflict, but rather its conclusion.  The search for a peaceful solution was one of the mutual themes of the meeting, as well as cooperation between the EU and the Euroasian economic union.

What will be the result of all of this during the March 19-20 Council of Europe meeting when the decision whether or not to continue sanctions will be made?

It was decided on the level of foreign ministries on Thursday of last week to extend the blacklist through September.  On February 9th new names will be put on the list, which is currently being prepared by the commission.  Finally we decided that the relevant agencies should make all necessary preparations so that should the European Council decide on additional steps, it can make them.  But we did not go any farther than that.

Are there differences in the German and Hungarian positions with regard to Russia and the sanctions?

No, there is no disagreement.  It’s not a secret that we consider German foreign policy to be a reference point in many things.  I am in the habit of agreeing with German foreign minister Steinmeier by telephone before every foreign council meeting, and I did so last week as well.

What do you think?  Is Ukraine capable of protecting its current national borders?

It is not a question for the international community that Ukraine’s territorial integrity and sovereignty is inviolable!  But in order for Ukraine to be a political and economically stable country, it must implement a number of structural reforms very quickly.  However, this is very difficult, especially during a period of war, given that according to Prime Minister Jacenyuk the country has lost 20 percent of its GDP in under a year.

Are we to understand that it is unacceptable to the European community that Russia create a buffer zone in eastern Ukraine between its borders and a western oriented Ukraine?

Our position is that each country’s people must be given the right to decide what kind of future their own country will have.

Is Hungary’s leadership calculating with things continuing to get worse in Eastern-Ukraine in the weeks to follow?

I would think that would not be in anyone’s interest.  At the same time we see fighting intensifying in certain areas, and the efforts of OSCE and other forums for discussion have been unsuccessful so far.  That is why I think it is necessary to significantly increase diplomatic efforts.  This was included in the conclusions of rate Council of Foreign ministers as well.

German papers revealed at the weekend that NATO units are being deployed to nine EU member states.  Can the Ukrainian situation really escalate in this direction?

It’s important that not only the EU but NATO also clearly signal that this is a community of values.  If the member states believe that their security is increased by NATO troops being stationed on their territory, then have to decide accordingly.

Is this question on the agenda of NATO?

Measures necessary to effectuate the standby action plan adopted at the Wales high level meeting are under way.

Hungarian airspace will play a role in the near future in the strengthening of the protection of airspace of the Baltic states.  Meanwhile we read more and more often that Russian military aircraft are violating European airspace.  It is possible Hungarian interceptor fighter aircraft might meet Russian plans in the air.  Have you considered the consequences of this?

Hungary is a member of NATO.  As such it is self evident that NATO is counting on us in its programs.  For this reason it is not a question whether we will participation in the protection of the airspace of Baltic states.

Let’s turn to the Putin visit.  The visits of Merkel and the Russian president are strangely close to one another.  When was the invitation formalized?  Can we even speak of an invitation?

It is necessary to go rather far back in time to the end of 2010, when Vladimir Putin as prime minister received Viktor Orbán.  This was a working visit, which ought to be reciprocated, and it was already discussed then that the next meeting would be in Budapest. Since then we have returned to the Russian capital on many occasions.  So now was really the time for us to host the Russian president.

Who suggested February 17th?

The date was the subject of continuous discussions.  In January it became clear that the second half of Feruary was suitable for both parties.

Did the Hungarian government propose this date?

That is one way to organizing a meeting.  Another is that the other party proposes possible dates.

Do we know why this visit became important?

As I mentioned before, discussions have been going on for four years.  From Hungary’s point of view it was very important because the long term gas purchasing agreement expires at the end of the year which came into force in 1995.  For this reason it is necessary to ensure Hungary’s gas supply after 2015 in a timely manner.

Cannot the agreement presently in force ensure this?

That is the contract that expires in 2015.

Yes, but we have purchased far less gas then what we contracted to buy.

So, we need to agree on this.

What options are there?

We are talking about a “take or pay” contract.  I note that decision on the part of the socialist government to agree is deserving of a special investigation (as would Viktor Orban’s decision to purchase this contract back from German energy giant E.on along with its gas storage division for EUR 875 million.-ed).  The conditions are extraordinarily disadvantageous from Hungary’s point of view.  The point is that we also have to pay for the entire quantity of gas if we don’t take delivery of it.  What is left over in a given year, that always is added to the next.  But eventually we arrive to the end of the contracted period.  That is now.

Even without concluding a contract could Hungary be supplied with gas merely from the left over amount of gas?

That quantity would theoretically guarantee our energy security if we could agree on it.

So we haven’t paid for the unused quantity? 

No yet.

Which would be more advantageous for us, to purchase the remaining contingent of gas or to conclude a new contract?  Do we know something about how the Russians would price the gas we haven’t used?

This is what we are going to negotiate.

Will Orbán and Putin discuss the afterlife of the Southstream project?

There is nothing to do about the Southstream project.  However, we can obtain information about how the gas designated to that can be supplied through Turkey, and if so, when, and from there where does it continue.  There is a non-binding agreement between the Russians and the Turks that can be finalized in half a year.  The capacity would be built in several stages.  However, the first phase would not be enough for the Turkey to also be able to export.  It remains an open question though which infrastructure the gas could reach central Europe.  This would require an enormous project in which I think the EU should play a role as financier.

Who is Putin meeting with in Budapest? 

The head of government and the president of the republic.

He’s not meeting with Russian investors or civil organizations?

No.

How long will the visitation last?

He arrives at noon and will spend the afternoon here.  The schedule will be similar to when chancellor Merkel was here.  First there will be a private discussion with the head of government.  Following that there will be a plantery meeting, then lunch, and a press conference.  And then he will visit the resident of the republic.  There will also be a wreath laying ceremony.

Where, in the Szabadság square at the Soviet memorial? 

No.

What will Orbán and Putin discuss?

The gas agreement, of course.  Improvement of trade relations and economic cooperation and other aspects will be on the table as well.

Paks?

There is a signed bilateral agreement.  There is no reason for the subject to be raised.

The Ukrainian-Russian conflict?

This is self-evident.

How would you place Germany, Russia, and the United States in Hungary’s system of connections?

There can be no question that Germany is our most important European ally.  Russia is perhaps the most important actor in the supply of energy in our region.  The United States is an very important defense ally in NATO and also at the same time is our economic partner playing a significantly influential role in Hungarian economic performance.  We would like to restore our political cooperation to the same level as our economic and defense cooperation.

After your first meeting with the US ambassador who do you see the chances of this happening?

I am very optimistic.  For our part we consider closed those questions pertaining to our political connections.  We have not received any evidence on the basis of which we would act.  We have acknowledged this, and for this reason only concentrate on the future.

Does that mean new travel bans are not expected, and six Hungarian names are to remain on the American list?

Three is no indication of this.  From this time forward it is far more relevant that American investments here reach USD 9 billion and these companies employ 90,000 workers.

Are new American investors coming?

We are going to announce three new investments by the middle of March, two taking place in Budapest and one in the countryside.  I cannot say the names of the companies, but I can reveal that two are are automotive companies.  The three projects will create 510 new workplace and represent an investment of USD 15.5 million.

The eastern opening does not appear to be a success story.  Which Hungarian companies were the beneficiaries of this? We know about Közgép. 

Apart from Ukraine there is growth in the countries involved in the Eastern partnership.  Two years ago exports to China reached USD 2 billion, which was a record then.  By contrast we had already reached that level by the end of November of last year.  In the Arab region there are actually serious problems.  And we suffered a double digit loss with the closure of the Nokia plant.

Can you name some companies that have been winners?

Yes.  The City Water Works.  The reason I say that is because it is communally owned.  The privately owned companies will decide if they want to publicize their successes. I would be happy were they to do so.

You thoroughly cleaned house at the foreign ministry.  However, there is not been a change in personnel in the case of the strategically important ambassador to Berlin.  Are you planning on making a change here?

Sooner or later that will have to happen considering the mandate of the current ambassador will expire soon.  We still haven’t decided when to make the change, and who to appoint.  With regard to the first part of your question, in 2012 while an undersecretary I recommended there be a place for foreign trade and foreign policy.  Performing the tasks of classical diplomacy is no longer sufficient.  It is also necessary to promote national economic interests.  It is not true that classical diplomacy has been relegated to apostrophes, this is what people say who are not willing to work more than before.

János Lázár defended you against the party veterans within Fidesz.  Were you grateful for the defense?

A lot of people attacked me when I became minister at the age of 36.  I announced a new foreign policy.  This harmed the interests of a lot of people.

Even within the party?

I don’t think so.  The world is changing, where interests strike to the right and left like lightning.  Those who undertake to bring about change should be prepared to be attacked for things they previously could not have imagined.  (Like purchasing a luxury villa without having the requisite financial wherewithal to do so and then lying about it-ed.)

Budapest Sentinel :