Hungary Pledges Support to Ukraine, Seeks gas From Russia

Ukraine Crisis

In this picture released by the Ministry of Foreign Affairs and Trade, Ukrainian Deputy Foreign Minister Mikola Tochitsky (left) receives Deputy Minister of Foreign Affairs and Trade Levente Magyar in his office in Kyiv on July 20.

Photo by Ministry of Foreign Affairs and Trade / MTI

Hungary stood alone among European Union member states in voting against the approval of a regulation to reduce gas consumption by 15%. However, it was ultimately agreed through political consensus at a meeting of EU energy ministers on July 26.

After the meeting, during which there was “serious debate” over the regulation, Minister of Foreign Affairs and Trade Péter Szijjártó said he voted against it because it is “unfounded, impossible to enforce, and disregards the interests of the Hungarian people.”

Under the proposal presented on July 20, all EU member states would pledge to cut their use of gas by 15% between August 1, 2022, and March 31, 2023, to stave off a projected energy crisis. The targets would be voluntary, but if the European Commission were to declare a so-called “EU alert” on the security of supply, gas demand cuts would be mandatory for all member states.

Yet, Szijjártó visited Moscow on July 20 with a government mandate to buy an additional 700 million cubic meters of gas. During the trip, Szijjártó said that Hungary was taking steps to make additional pipeline capacity available for the delivery of 20 million cubic meters of gas a day.

He added that the Hungarian government had prepared the financing for the extra gas volume and signed the necessary agreements. Currently, Hungary has enough gas in storage to cover 26.6% of annual consumption, above the EU average of 15%, he said.

Days earlier, Szijjártó was among EU leaders who agreed on another round of sanctions against Russia in Brussels on July 18. He noted that the new package of sanctions would not contain any restrictions on the delivery of energy but instead include an embargo on Russian gold and a tightening of restrictions on the trade of dual-use goods.

Support Pledged

Meanwhile, as the Minister of Foreign Affairs and Trade undertook trips primarily concerned with Russia, Deputy Minister of Foreign Affairs and Trade Levente Magyar, who is also a parliamentary state secretary, paid a visit to several Ukrainian cities, pledging support from Hungary. At a stop in Lviv on July 19, Levente Magyar said that Hungary is prepared to take in and treat wounded Ukrainian children and injured soldiers in large numbers, as well as to expand its humanitarian assistance program in the west of Ukraine.

Upon visiting areas in and around Kyiv on July 20 that had suffered the most damage in the war, he said Hungary had taken on the reconstruction of a school, in addition to the construction of a small hospital with a post office and a municipal government office in Bucha, which became infamous as a place where many civilians were apparently killed by Russian soldiers and left lying in the streets.

While in the capital on July 21, Magyar also reached an agreement with Ukrainian officials on increasing transshipment capacity across the border with Hungary, between Chop, Ukraine, and Záhony (305 km northeast of Budapest), in Hungary. Although the measure would require “big railway investments” from Hungary, he said that a working group focusing on the project is already underway.

Speaking on TV news channel M1 on July 15, Minister of Agriculture István Nagy suggested Hungary ramp up its daily transshipment capacity of Ukrainian grain from 4,000 tonnes to 8,000-10,000 tonnes.

According to Nagy, some 22 million tonnes of grain is stuck in storage in Ukraine due to the blockade of the country’s Black Sea ports, through which 90% of grain exports normally pass. This has left farmers little room to put this year’s harvest and created a disincentive for planting next year’s crop, he said. Since Ukraine grows 9% of the world’s grain, he warned that the situation could cause a global food crisis.

Earlier, Nagy had proposed immediate and long-term solutions for facilitating Ukrainian grain exports. For instance, in addition to developing transshipment capacity and storage facilities, processing plants could also be built in the border region between Hungary and Ukraine. While this would undoubtedly help to improve the global food supply in the long term, Nagy also believes that support for such initiatives could come from the EU.

This article was first published in the Budapest Business Journal print issue of July 29, 2022.

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