Football Scarves and Financial Support

Ukraine Crisis

Refugee children from Ukraine take part in an online lesson at the Imre Bariss Artist Training Institute in Budapest. Since March 2022, the National Circus Arts Center has welcomed and helped Ukrainian refugees, primarily circus performers and their families. In addition to accommodation and three meals a day for the refugees, the center provides opportunities for practice, employment and learning, recreational programs and comprehensive assistance with administration.

Photo by Zoltán Balogh / MTI.

Prime Minister Viktor Orbán held a meeting of the Defense Council on November 15 to address rocket blasts that had damaged the infrastructure of the Druzhba (Friendship) pipeline, causing a suspension of deliveries of Russian crude oil, and also landed in Poland, near that country’s border with Ukraine.

A rocket had damaged a transformer connected to a pump station along the pipeline, severing power for a period, which temporarily halted the delivery of crude to MOL. The Hungarian oil and gas giant said its crude reserves had been sufficient to keep its main Danube Refinery operating continuously and that the interruption did not put the country’s energy supply at risk.

While deliveries resumed within a day, albeit at low pressure, Minister of Foreign Affairs and Trade Péter Szijjártó said that Hungary must expect faltering deliveries through the pipeline over the coming period because of Russia’s relentless assault on Ukraine’s energy infrastructure.

Although Szijjártó reiterated that this would not affect Hungary’s energy security, a government spokesperson told international news wire Reuters on November 28 that it could only maintain a fuel price cap it had put in place beyond January 1 if shipments from Russia flowed without interruption and MOL’s refinery in Százhalombatta operated continuously. Recently, the oil and gas company has had to restrict deliveries of motor fuel to petrol stations across the country as a consequence of the fuel price cap.

It was precisely such energy concerns that informed the government’s decision to establish an independent energy ministry.

Most Important Issue

“Energy is the most important economic and political issue for Hungary today, and that needs to be reflected within the government, with a view to responsibilities,” Prime Minister Viktor Orbán told Kossuth Rádió on November 18. The Hungarian Parliament approved the establishment of the new Ministry of Energy Affairs on November 22, which Csaba Lantos, a banker with a background in energy trading, will lead. Lantos told a parliamentary committee that creating the conditions for Hungary’s energy sovereignty would be “the most important task” of the coming years.

Meanwhile, relations between Hungary and Ukraine have been strained recently. Orbán had angered Ukraine and Romania by wearing a football scarf adorned with a map of historical Greater Hungary, which included territory in both countries that Hungary had forfeited under the Treaty of Trianon following the end of World War One.

On the other hand, Hungary has complained to the European Union about Ukrainian boycotts of Hungarian companies. Authorities in Ukraine have reportedly “banned” products made by MOL and pharmaceutical company Gedeon Richter for their continued business presence in Russia. Hungary insists neither company is in breach of sanctions.

On a more amiable front, a resolution published in the latest issue of the official Magyar Közlöny [Hungarian Gazette] revealed that Hungary’s government mandated Szijjártó to start talks with Ukraine on drafting an agreement on EUR 187 million in financial support. While Orbán insists he will not accept joint borrowing by the EU to assist Ukraine, he has said Hungary could contribute an annual HUF 60 bln-70 bln from the central budget through a bilateral agreement with the beleaguered nation.

President Katalin Novák visited Kyiv on November 26, at the invitation of Ukrainian President Volodymyr Zelensky, to participate in the launch of the Grain From Ukraine initiative. Novák said Hungary is supporting the program by financing a USD 3.5 million delivery of 10,000 tonnes of grain to Africa. She also added that Hungary is offering assistance for the transshipment of grain at a depot on the Ukrainian border.

This article was first published in the Budapest Business Journal print issue of December 2, 2022.

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