Hungary Raises Questions Over Further Support

Government

In this photo released by the Prime Minister’s Press Office, Prime Minister Viktor Orbán (right), former Colombian President Andres Pastrana (center), the president of the Christian Democratic International organization of conservative parties, and former Slovenian Prime Minister Janez Jansa, vice president of the CDI (left) before a working dinner at the Carmelite monastery on October 17, 2022. Strategies and opportunities for cooperation available to right-wing, Christian, and conservative parties in the current situation created by the Russo-Ukrainian war were discussed.

Photo by Zoltán Fischer / MTI / Prime Minister’s Press Office

Hungary supported the funding of a further EUR 500 million by European Union member states to support Ukraine’s Armed Forces through the European Peace Facility (EPF) at a meeting of EU foreign ministers in Luxembourg on October 17.

However, Minister of Foreign Affairs and Trade Péter Szijjártó said that while Hungary had agreed to this round of funding, with a contribution of EUR 10 mln, he could not guarantee that this would be the case next time, adding that the fund now totaled at EUR 3 billion.

Hungary’s foreign minister also exercised what he called a “constructive abstention” toward an initiative that would establish a Military Assistance Mission to train Ukrainian soldiers, saying that other member states are free to participate and contribute, but Hungary would not.

“We do not think that anything leading to an escalation is a good idea,” Szijjártó explained.

During the UN General Assembly in New York in September, Szijjártó had met with Russian Foreign Minister Sergei Lavrov, despite an explicit request from the EU not to conduct bilateral negotiations with the country. Although he received flak from opposition politicians and international observers, Szijjártó defended his decision in a post on Facebook on October 9.

He said the talks had directly contributed to Hungary concluding an agreement with Gazprom to reroute gas shipments to Hungary through the TurkStream pipeline and that continued dialogue was necessary to achieve peace.

At a summit of European Union leaders in Prague, which concluded on October 7, Prime Minister Viktor Orbán also expressed a reluctance to continue with the bloc’s current policies and emphasized the necessity of seeking peace. The PM insisted that the sanctions against Russia must be changed.

Bleeding Out

“Russia has not been brought to its knees at all while European economies are bleeding out,” he claimed. Adding that sanctions were to blame for “sky-high” energy prices that are “practically impossible to pay,” Orbán acknowledged that “all of the important Hungarian national goals” had been achieved during the meeting; Hungary managed to negotiate exemptions from the sanctions affecting crude and gas deliveries as well as nuclear energy.

However, stressing the need to work towards “a cease-fire and negotiations,” Orbán emphasized peace was the ultimate solution to these issues.

Yet, despite the rhetoric, Hungary remains committed to supporting Ukraine. At a meeting with the vice president of the International Finance Corporation, a World Bank group member, on October 16, Minister of Finance Mihály Varga declared backing for making more World Bank resources available to Ukraine and neighboring countries affected by the war.

Varga noted that Hungary’s financial support for Ukraine amounted to HUF 28 bln, in addition to the country taking in nearly one million refugees.

Ukraine has been providing support to the Hungarian economy as well. According to State Secretary Zsolt Feldman of the Ministry of Agriculture, Hungarian feed and manufacturing companies have been buying maize from Ukraine amid a local shortage caused by the summer drought.

While Feldman acknowledged that the rail cargo volume of grain brought from Ukraine to Hungary had averaged 120,000 tonnes in recent months, the Association of Hungarian Logistics Service Centers added that the import of Ukrainian grain has also had a beneficial effect on domestic rail traffic, offsetting the decrease in international traffic caused by more expensive traction energy.

This article was first published in the Budapest Business Journal print issue of October 21, 2022.

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