After a series of violations to the EU’s energy regulation, the Hungarian government is now faced with an infringement procedure. With this, the Orbán-cabinet will finally have an official document proving that what the government does in the energy market is not only beyond rationality and against consumer interest but also against EU requirements. Although not heard on the news, the procedure can end the absorption of money by the privileged and Fidesz-friendly MET (Hungarian Energy Association).
Fidesz immediately started its mantra about how Brussels is attacking the government’s efforts in the reduction of utility costs; therefore, it is important to clarify some points.
The procedure was put into effect because of a failure to adapt the third energy package in 2011, when the reduction of utility costs was yet unheard of.
In countries where the energy package was consistently adapted (e.g. in the Czech Republic), energy costs became more favorable than in Hungary, and also on a market basis.
One of the conflicting points between the EU and Hungary is the construction of the tariff-system: energy costs are most heavily taxed in Hungary, which evidently raises the prices, while weakening the position of vital investments in the energy sector.
The main source of conflict is whether service-providers have equal access to the supplies of the cross-border gas pipeline connecting the Austrian Baumgarten with Hungary. As of now, gas is cheaper on the free market than in Hungary; however, only two stakeholders, MVM and E.ON, have access to it, which, according to the European Commission, goes against competition rules. All we can add is that the situation created by the government is even more corrupt than what it seems. E.ON’s gas business was since purchased by the government, and within the framework of an anti-corruption procedure, MVM signed off their own capacities to an oligarch company with an offshore background, namely, MET, which, as a result of vague business dealings, gave a 50-billion-forint-share to its mysterious owners, among them István Garancsi.
It is not the first time that the “war of independence against Brussels” turns out to be a complete hoax: again it is the EU who has to protect Hungarian people – this time from Orbán-friendly oligarchs doing pirate business on the energy market with governmental help. Dialogue for Hungary demands the Orbán-government to draw the consequences and to avoid making the Hungarian tax-payers pay for the sanctions laid out for going shares in the energy-market.
The European Environment Agency today released its five-yearly assessment of the state and outlook of the environment in Europe (1). Commenting on the outlook, Green environment policy spokesperson Benedek Javor said:
“The EEA has today sounded a clear alarm bell about the state of the environment in Europe. Across the broad spectrum of areas assessed – from biodiversity, to air and water quality, to climate change and beyond – it is clear that Europe is facing major challenges and will not meet the goals it has set for itself without a shift in policy.
“The European Commission and its president Jean-Claude Juncker must hear this alarm and shift tack. The worrying signals coming out from the new Commission, notably from its vice-president Frans Timmermans in presenting the Commission’s work programme, are that environmental policy will take a back seat and suffer from a regulatory roll-back. This outlook should force a fundamental rethink.
“If Europe is to have a chance of long-term sustainability, the ambition of our existing policies will have to be strengthened, as economic or technology driven efficiency gains alone will be insufficient. It is also clear that there are major economic benefits to be gained by prioritising sustainability. Instead of scaling-back key regulatory proposals, such as on the circular economy and air quality, the Commission should be giving ambitious policies top priority.”
Now, instead of 15 years, the Orbán government wants to classify the contracts of the Paks-expansion for 30 years. Dialogue for Hungary has a better idea: the government should either not sign any contract at all (thus there is nothing that needs to be classified, and everything will go according to the Russians’ wishes anyway – there is no need for paperwork), or they should not carry out actions that can only be carried out in secrecy.
The fifteen-year classification of the Paks documents has already lead to an uproar in the public and now the Orbán-government raises the stakes: they want the timespan of the classification to be 30 years for every document, not just technical or business details, but all the preparatory materials as well; indeed, everything that would provide the public with information about how much money was spent and on what exactly.
If the aim, indeed, is to spend public money of 4000 billion Forints’ worth without external control, then Dialogue for Hungary has better ideas:
Do not sign contracts at all, always pay every bill handed over by Rosatom and its subcontractors (this is what is going to happen in reality, but our idea would at least spare the government from a lot of unnecessary paperwork)
The whole of Tolna county should be announced as the area of operation and the place of the investment should be classified as well; this would also be a convenient way to take home huge amounts of money without any civilian or authority intervention
If, however, the government and the Fidesz-friendly clientele is not up to the theft of the century, then it is unnecessary to classify everything: decent contracts should not be hidden from the public.
Viktor Orban’s evolving relations with the oligarchs both in Hungary and the wider region are having serious effects on Hungary’s energy strategy. Now, Putin is in town for meetings that will no doubt result in a new contract for the supply of gas, a development which will be to the benefit of a minority and to the detriment of most of the population, and which could also lead to tensions arising with the EU. – Article in Green European Journal
On February 17, Vladimir Putin, the President of Russia is traveling to Hungary, as part of an official visit, to meet with the Hungarian Prime Minister, Viktor Orbán. According to official statements, they are going to discuss the two countries’ economic and political relations, as well as energy security issues.What should we expect from this encounter? One of the concrete goals of the visit could be to renew the long-term gas supply contract with Russia, and –although Hungary is not in a particularly bad negotiating position– the short-term interests of the government will force Hungary to renew this contract under very humiliating conditions. This would not be the first time for Viktor Orbán to take a decision in energy policy matters that goes against common sense, a decision, which enables a small number of people to make huge gains, while the rest of the population can only lose.
The Hungarian energy strategy has numerous controversial elements. What is most disturbing is the fact that, in the last few years, Hungarian energy policy wasn’t determined by internal capabilities, external constraints and by keeping pace with changes in energy technology. Instead decisions were based on choices made due to “superior” goals that had nothing to do with experts’ opinions: the government’s goal was to reward people loyal to Orbán, build a new clientele (using taxpayers’ money), and replace some people at the top of the pyramid of Hungarian oligarchs. These were supposed to strengthen the political power of Orbán.
Orbán and his oligarchs
The first two-thirds majority of Orbán (in 2010) would have been impossible without his long-time friend, and former treasurer of the Fidesz-party, Lajos Simicska. The political and the economic arm of the party were codependent at that time, and the support of oligarchs was necessary to receive the amount of votes needed for the kind of success Orbán was hoping for. The second two-thirds majority in 2014, however, was different: now keeping the oligarchs around was too costly, and by far not as helpful as before. Thus, it was about time to get rid of the boundaries and dependencies Simicska and other oligarchs meant to Orbán and his government. But creating a new clientele – one whose members don’t behave like the kinds of all-powerful oligarchs as Simicska, and are absolutely loyal to and dependent on Orbán – can be just as expensive. Thus, the energy industry is one of the few industries that can provide sufficient funds for this project.
In the past few years we have seen many obvious signs of the industry being corrupted and put under the direct influence of the government. A good example is the increasingly important role of MET Holding. MET is an energy trading company – owned by a number of off-shore firms, related to, among others István Garancsi, a businessman with close ties to Orbán – that is in a privileged position due to some well thought out decrees and contracts: the company can use the 2,2-2,9 billion square meters of gas coming from Austria, without competition, thanks to the state-owned MVM Electricity Ltd.
MVM earns nothing on transporting the gas from Austria to Hungary. MET, on the other hand, is getting richer and richer. The owners of MET’s Hungarian subsidiaries have earned millions of Euros in the last few years. In 2012, the owners have received dividends worth HUF 55 billion (approximately EUR 180 million). But MET’s activities extend to much more than just the import of gas, it has also bought a power plant, and is about to overtake the natural gas trading activities of GDF Suez, a French multinational electricity company, on the Hungarian free market.
The incredible success of MET, and Orbán’s close friendship with Putin is no coincidence.
Orbán obviously needs Putin – a person who has great influence on his country’s energy exports – in order to make the corrupt Hungarian energy system work, and in order to make profits on the country’s natural gas transactions. From this meeting with Putin, he expects a political deal that can further increase his share of profits in the energy sector, and will thus help him further pursue his power interests.
A top priority
Not so long ago, Orbán has called the new, long-term gas supply contract with Russia a top priority of the country. Assigning it such a high importance, however, seems to be irrational: a 2013 study by the Regional Centre for Energy Policy Research (commissioned by the government) has shown that a new contract, right now, would not make too much sense, unless it would require Hungary to buy a much smaller amount of gas than before, and to do that for a much lower price than it currently does. This is not the case: the contract will be about an increased amount of gas, which means that Hungary has to buy more gas than it would normally consume. And it will also pay a higher price than necessary.
Given that the surplus of the previous years will be able to cover the energy needs of the next few years, Orbán is wrong to say that the new long-term contract is badly needed.
On the contrary, in the light of the current natural gas market developments, Hungary could have relatively large margin of maneuver. The Russians would benefit from a long-term gas contract, since the revenue would improve their unstable budgetary position and improve their regional position. The gas market is currently supply-driven and in the coming years is likely to remain so. In a supply-driven gas market the customer is the one who’s in a good bargaining position, this is what Orbán is giving up for pennies in his oligarchy fighting spirit.
Don’t trust the short-term benefits
The Orbán-Putin meeting is likely to yield a more political bargain and as a result – according to internal sources – Hungary will receive Russian gas cheaper below market price, at least in the short term. You can cut utilities in the coming years and possibly provide for the 2018 election campaign financing. In addition, the price difference between the contracted and the marketed price enriches the new oligarchs. However, the agreement does not serve a healthy functioning energy market or the long-term interests of Hungarian consumers.
Russia will, for sure, ask a high price for this deal. There are two possible scenarios:
(1) In exchange for the current short-term reduction, we might, in the long-term, be forced to buy natural gas for a price above the market price. If we look at the neighbouring countries, it becomes quite obvious that all the countries who have signed long-term contracts with Russia, around 2005, are now paying a much higher price for gas as does Hungary at the moment.
(2) Putin might as well ask for a political favour: a consistent pro-Russian stance in the EU. The Russians badly need a disagreement inside the EU, so that it cannot act in a unified manner when it comes to Russia. A veto on sanctions against Russia can be very valuable for Putin.
Angela Merkel has visited Budapest less than two weeks prior to Putin. During her visit she made it clear to Orbán that Hungary cannot have a Russia policy that is not in line with the EU stance: the Union has to act in a unified way when it comes to Crimea or the conflict in Eastern Ukraine. Orbán, however, defended Hungary’s relations with Russia, on their press conference. This lets us infer that he won’t say no to Putin. He will rather pick a fight with the EU. Especially when the EU’s warnings seem to be so distant for Orbán. Russia in the meantime seems to be quite sure that Hungary can be the partner it is looking for, in order to mess with European unity.
I believe that nothing will stop Orbán from selling the country and the future of its people to Russia.
The aftermath of the Ukrainian crisis, the Russian military intervention and undeclared war in eastern Ukraine brought about a crucial change in EU’s foreign affairs. Russia can no longer be regarded as a fully reliable partner to the EU. The issue is highly relevant today as the city of Mariupol in eastern Ukraine were recently assaulted by pro-Russian separatists, using weapons obviously supplied by Russia. The new understanding of a conflict-oriented and imperial rationality based attitude of the Russian leadership caused a substantial shift in the EU’s Russia-politics substantially – and raises security questions not only at European level but also at the global scale. The military conflict also brought to the forefront the issue of energy security, the need to reduce all forms of energy dependency from Russia and it underlines the importance of the EU speaking with one voice in energy policy as well as in its foreign policy. (Benedek Jávor’s article in Green European Journal)
The Russian-Ukrainian crisis, which unfolded after the Ukrainian revolution in 2014 and resulted in the Russian annexation of the Crimea and the destabilization of Eastern Ukraine largely affected the EU-Russia relations.
Russia is the EU’s biggest neighbour and its third biggest trading partner. In the last decades, the EU’s Russia-politics have been characterized by mutual recognition and increasing cooperation, which was evident not only in the fields of trade and economic cooperation. The so-called common spaces cover aspects such as research, culture, education, environment, freedom and justice. Moreover, negotiations have been on-going since 2008 to further strengthen the partnership and have legally binding commitments in all areas including political dialogue, freedom, security and justice, research, culture, investment and energy. After 2010 the Partnership for modernization has become the focal point for cooperation, reinforcing dialogue initiated in the context of the common spaces.
The role of Russia in the Ukrainian crisis, however shed light on the fact that Russia is not on the perceived track in the process of democratization and modernization, that is to say, Russian politics did not become more moderate through the cooperation with the EU, on the contrary.
Even if we accept the experts’ argumentation for the need for a ‘buffer zone’ between the EU and Russia, illegal annexation of the Crimea by Russia and the continuous destabilization of Eastern Ukraine including aggression by Russian armed forces on Ukrainian soil cannot be considered acceptable in any sense and give a clear indication of the unchanged aggressive nature of Russian politics and leadership. It became clear that Putin is primarily led by imperial rationality and now it seems that Putin’s Russia is no longer interested in a trustworthy and functional relationship with the EU.
The question is highly relevant today after a series of rocket attacks in Mariupol by pro-Russian separatists. Against this background, the current EU presidency has called a council of EU foreign ministers to prepare the ground for a summit of EU leaders on the crisis with Russia and the role the EU should take.
Indeed, the developments over the past two years call for a new interpretation of Russian-EU relationship as they demonstrate that Putin’s Russia is impossible to handle with peaceful approaches and methods based on seeking consensus.
It is all the more important that the EU speaks one voice and acts in a united manner. And this is exactly what is missing.
Some EU member states including Poland and the Baltic states regularly use a strong anti-Russian rhetoric, while others, such as Hungary take political decisions showing an opening towards Russia. These seeming contradictory attitudes expressed in the rhetoric and concrete choices, however, might stem from a common fear from growing Russian influence- partly due to historical reasons. The only difference lies in the role these national governments attribute to the EU (or the US) in handling the conflict, depending on the extent they believe that the EU is willing and able to send clear signals to Russia.
Germany itself, having a huge influence on EU politics, has recently re-evaluated the Russian relationship. Before, Germany had the standpoint that a close economic cooperation can have a stabilizing effect on Russia and reduce the possibility of aggressive geopolitical measures. They hoped that this cooperation might also further the modernization of the Russian economy and thus it can contribute to the creation of a Russian state that is linked to the world economy not only through its energy export, but with many other ties and which has its interests in sustaining the balance of international relationships. Germany, however, has realised that these presuppositions and hopes were wrong. Chancellor Merkel placed harsh measures and persecutes consistently the sanctions that the EU adopted in response to Russia’s military intervention in the Ukraine.
The sanctions in place include the suspension of most cooperation programmes, suspended talks on visas and the new EU-Russia agreement as well as restrictive measures targeting sectorial cooperation in the fields of defence, sensitive technologies including those in the energy sector. Russian access to capital markets is also restricted. The European Investment Bank and the European Bank for Reconstruction and Development have suspended the signing of new financing operations in Russia and a trade and investment ban is in force for the Crimea region.
These sanctions, however, are somewhat questionable in their effect and will expire in the course of 2015 unless all 28 Member States of the EU agree to renew them. Chancellor Merkel called for joint European action and during their December Council meeting various EU leaders stressed that the EU should maintain the sanctions until Russia changes its behaviour and stops the aggression in Ukraine.
Thus, the EU must again discuss economic sanctions against Russian, as well as how to ensure aid and protection for the civilian population in eastern Ukraine. In this respect, again, speaking with one voice is essential.
Finding a new balance in the EU-Russian relations is key in the broader context, for the sake of a global equilibrium as well. Russia might opt for building stronger links to China.
These recent developments with Russia have also point the attention to issue of energy security in the EU, which is very high on the political agenda now.
However, the impacts of Russia’s nuclear investments in the EU are not seriously considered.
We are all aware that the EU is extremely dependent on external energy sources, mainly coming from Russia. (And vica versa, supplies of oil and gas make up a large proportion of the Russia’s exports to Europe which are crucial for the Russian economy. The recent collapse of the Russian economy due to the rapid fall of oil prices is a clear proof for this, which has also shown that the country’s self-confidence was merely stemming from high oil prices.)
The dependency on Russian fossil fuels, the lack of diversification of energy sources have been widely recognised in the EU’s energy policy. However, these are only part of the whole picture. The impacts of Russia’s fossil or nuclear investments in the EU are hardly considered in the energy-related acquis, even though it is obvious that through its energy corporations, the Russian government has means of influence far beyond the mere business transactions.
Energy dependency can appear in multiple forms including financial, technology or fuel dependence in the nuclear and fossil sectors, acquisition and ownership of strategic energy infrastructure as well as investments in energy projects by Russia in EU, in particular the Baltic and the Central-Eastern member states.
Here again, we see no unified behaviour from EU member states. Some EU member states have reconsidered their cooperation with Russia, or Rosatom in particular as a consequence of the crisis in Ukraine, e.g. Germany refused to sell the gas storage capacities to Russia, Bulgaria refused a second Rosatom nuclear plant, Slovakia stopped negotiations with Rosatom, and UK suspended its negotiations with Rosatom. At the same time, some EU countries such as Finland or Hungary still consider building new nuclear power plants partly using Russian financial sources, technology, fuel and waste management facilities. It is the responsibility of EU bodies is to ensure that decisions in any Member State do not undermine the energy security of the EU as a whole.
Equally importantly, the EU should think out of the box and look beyond route diversification and new infrastructure projects, when it comes to improving energy security.
A systemic, long term solution for the problem is increased energy efficiency with special attention to the transport sector, residential buildings and industrial sites and the wide-scale use of local, renewable energy sources building upon, inter alia, novel financial solutions and community-based models.
Energy efficiency and renewables projects could contribute to reducing all forms of energy dependencies.
To conclude: even if the hopes of the EU for the stabilization and democratization of Russia have failed to come true, geopolitical realities are given. The EU has to reassess its relationship with Russia, to act firmly in a united manner and to tackle security threats at all levels, including in the field of energy policy. The EU should work for a healthier relationship with Russia in this regard as well, by systemically reducing its dependency, wherever possible – yet acknowledging determinations, long-term mutual dependencies which can be used as a basis for the new balance.
Hungarian MEP Benedek Javor has decided to appeal to the European Court of Human Rights in Strasbourg over the refusal of house speaker Laszlo Kover to let him speak about the Paks expansion in the Hungarian assembly.
Source: infovilag.hu
Kover did not allow Javor, a member of the E-PM opposition alliance, to address the chamber on the ground that he is a representative in the European Parliament and should only speak about matters concerning European affairs.
Javor told a news conference in Budapest that he had made the request to speak during the debate on the nuclear power station’s expansion a week before the debate had been due to take place on Sept 26, since, he insisted, the issue also concerns the European Union.
Since the house rules committee had not come to a consensus regarding Javor’s request, Kover rejected it, arguing he topic did not concern EU affairs.
Javor said Kover’s decision contravened his right to freedom of expression.
The European Union (EU) should leave behind its economic growth obsession and focus instead on more transparent and sustainable policies, according to hundreds of people gathered at the flagship European Citizens summit event in Brussels.
A recurring question surrounding the Parliament elections in May was whether and how the EU will be able to regain the public’s lost trust in the European project. Today, hundreds of European citizens and people living in Europe voiced their hopes, expectations and demands as they reminded EU leaders that, if Brussels is not to fall into irrelevance for millions of its citizens, it should become more inclusive, fair and transparent not only on paper but in its proposals and policies too (like the Europe 2020 strategy).“Economic growth cannot be the sole driver of the new Europe that we were promised in the European elections. The hardship endured by many over the last years has prompted the need to discuss an alternative vision of Europe; a new approach that puts people’s interests and well-being first, and not as an afterthought of financial markets. We deserve a fairer Europe accountable to the people who make it, not to the CEOs and bankers who want to rule it,” said Emma Woodford, spokesperson for the EU Civil Society Contact Group.
While a recent Eurobarometer survey showed that 95% of EU citizens want Europe to do more to protect the environment, Jean-Claude Juncker, the European Commission’s President-elect, has hardly left an occasion unused to dismantle European policies on climate change and the environment. The ten environmental umbrella organisations in Europe are alarmed by the mission statements issued by the climate and environment commissioners-designated (here and here) as they commit next to nothing to keep the environment’s degradation to the lowest level possible. The 2nd Citizens Summit channelled Europeans’ voices and concerns into concrete, urgent demands to EU leaders and policy-makers. Participants discussed on how to deal with the many xenophobes, macho’s & anti-democrats coming to the new European Parliament. They agreed that Climate Change is the biggest market failure ever and that the narritve surrounding the solution should shift to a human rights discourse. They agreed that the future of the EU should be underpinned by an economic model based on a fair and inclusive distribution of resources, and not on a race for wealth accumulation; in a society driven by human rights and values and not by narrow, short-term economic targets; and in a shift from power concentration and a lack of transparency of political processes, such as the TTIP negotiations.
The Summit’s participants agreed that a leadership fit for the XXI century must understand that resources and services such as water, education, health, information, environment, culture and public spaces are common goods, not the privilege of a few. The EU is also a responsible global actor bound to spread its underpinning values beyond its borders: social justice, respect for human dignity, liberty, democracy, equality, the rule of law and respect for human rights. To make that happen, and among other proposals, the Summit discussed the Degrowth movement. As Vincent Liegey, spokesperson of the French Degrowth movement, stressed: “in reminding us that an infinite growth in a finite world is an absurd concept, Degrowth demonstrates the physical and also the cultural limits to growth. Through its radical critics and also through alternatives, initiatives and reflexions, it opens and experiments paths to a democratic transition to new sustainable and desirable models of society.”
Susan George, social activist and chairperson of the Transnational Institute, commented: “in a final, anti-democratic action, the outgoing Commission has rejected a European Citizens Initiative on the TTIP —the Transatlantic Trade and Investment Partnership. If ratified, this scandalous, secretive treaty will lower standards for health, food, work, environment and hand over our most important decisions to transnational corporations. This Citizens Summit is an arena both of resistance and of renewed commitment to build a different Europe—inclusive, fair, green and democratic.”
MEPs Bart Staes and Philippe Lamberts. Source: ejolt.org
A dozen MEPs came to the Summit to have a direct conversation with citizens. Bart Staes from the Greens encouraged civil society by saying that every success so far has come when good proposals in the parliament were backed up by strong public pressure – citing the example of a ban on pesticides that kill the bees. Philippe Lamberts, also from the Greens, said he had read Piketty and realized fully that Europe is beyond saving if we don’t reverse the trend on inequality. Benedek Javor, another green MEP, warned that the brutal silencing of Hungarian civil society needs a much stronger reaction. He mentioned an example of a German MEP from the EPP using the same reasoning as Victor Orban to get rid of funding to civil society. A slightly different vision was presented by Hans-Olaf Henkel – MEP for the conservatives and reformists. His vision was one of a decentralised Europe where responsibilities were handed down closer to the people themselves. Here was one industry representative talking about subsidiarity, seemingly acknowledging – when questionned about it – the need for local currencies.
The EU is at a critical juncture. The economic crisis has turned the lives of millions of people living in Europe upside down. It cannot happen again. It is high time for our leaders to start listening to Europe’s citizens – the very people they are supposed to work for – and put people’s needs at the heart of their policy agendas. The 2nd Citizens’ Summit has sent a clear, bold message: if it is to survive, the EU should leave behind its growth obsession and replace it with a model based on rights, justice and democracy. A statement with which very few would disagree.
More info:
The European Citizens Summit has been organised by the EU Civil Society Contact Group and DEEEP, a project of CONCORD. DEEEP is co-funded by the European Union.The EU Civil Society Contact Group (CSCG) brings together eight large rights and value based NGO sectors – culture, environment, education, development, human rights, public health, social and women.
Hungary has increasingly courted and won favour with Russia, while rejecting the core values of the European Union.
Prime Minister Viktor Orban says he wants to turn Hungary into an ‘illiberal’ state, using Russia as a model. Source: aljazeera.com
Budapest, Hungary – As the West holds its breath waiting to see if Russia will intervene in Ukraine, there is one country looking to Moscow for inspiration: Hungary.
In a speech in late July, Prime Minister Viktor Orban said he wanted to turn Hungary into an “illiberal state” and used Russia as a model example.
“We want to build a workfare society … which is willing to bear the odium to declare that it is not liberal in character,” said Orban, adding the 2008 financial crisis proved liberal democracies cannot be competitive.
The speech proved highly controversial, grabbing international headlines and calls by Hungary’s opposition groups for the European Union, of which Hungary is a member, to monitor the country’s reforms.
“Hungary has gone so far as to actually reject explicitly by the prime minister the very values that guide the European Union and NATO. This has never happened before, this is a unique event,” said Charles Gati, a professor of European and Eurasian studies at John Hopkins University.
Government spokesman Zoltan Kovacs said the prime minister was only talking about the limits of liberal democracy and how to deal with those restraints. Kovacs said the reference to looking towards Russia, as well as other countries Orban mentioned including China, Turkey and India, were regarding economic models.
“He was not referring to democratic institutions and the decision-making process,” Kovacs told Al Jazeera.
However, director of the Hungarian-based Political Capital Institute Peter Kreko said Russia’s influence over Hungary goes far beyond economics.
“Putin serves as a role model for him in the sense that Putin is … the frontman of the ideological fights against Western Europe and Western interests.”
Warm relations
Hungary’s move towards Russia has been in the works for years – and it seems Russia has taken note. Last year, Vladimir Putin sent a letter congratulating Orban on his birthday and thanking the prime minister for greatly strengthening relations with Russia, according to Hungary’s state news agency MTI.
In January, Russia agreed on a controversial deal to loan Hungary up to $13.5bn to build two reactors at a nuclear power plant in the country’s south. It will be the largest construction project in Hungary since the end of communism more than 20 years ago.
In early July, Orban said Hungary would go ahead with the South Stream pipeline project that would import natural gas from Russia through a route that would bypass Ukraine.
To link Hungary’s economy stronger and stronger to Russia which is in a trade war with… the European Union and in a diplomatic conflict with the European Union, I think it’s highly dangerous and highly risky.
– Benedek Javor, European Parliament member
Andre Goodfriend, who is currently in charge of the US embassy in Hungary while it awaits a new ambassador, told Al Jazeera that Hungary needs to diversify its energy imports from other countries.
“We’ve been encouraging Hungary and many other countries to diversify their sources of gas [and] find other ways … to share gas between different countries … without having it necessarily come from Russia,” he said.
Kovacs, the government spokesman, argued that there was a long, thorough process before the deal was made.
“It’s been competitive in the form that the previous government as well as this one has looked around and tried to measure all possible alternatives and possibilities,” he said.
Concerns exist, however, that the nuclear deal will increase dependency on Russia, which is already Hungary’s main supplier of natural gas and oil.
European Parliament member Benedek Javor, who is part of a small leftist opposition group in Hungary, asked the EU to investigate the deal over whether it broke the law.
He said the Ukrainian crisis, sparked by then-president Viktor Yanukovich sacrificing an EU trade deal for closer ties to Russia, showed the risk of allowing Moscow greater influence over Hungary.
“To link Hungary’s economy stronger and stronger to Russia which is in a trade war with … the European Union and in a diplomatic conflict with the European Union, I think it’s highly dangerous and highly risky,”Javor told Al Jazeera.
What’s in it for Russia?
But what does Russia get out of a relationship with a relatively small country such as Hungary?
“The main reason for Russia’s interest … is to weaken the European Union,” John Hopkins University professor Gati said. “It is doing so … primarily by several countries dependence on Russian energy and, therefore, these countries’ willingness to close their eyes to some aspects of Russian behaviour.”
Putin feels that the European Union is in a very weak position.
– Peter Kreko, Political Capital Instiute
Peter Kreko, director for the political consultancy firm Political Capital Institute, said focusing on Hungary is one of the best ways to undermine the EU because Orban has taken an antagonistic approach to the supranational government.
He added, however, that previous leaders have also tried to get closer to Russia. “Putin feels that the European Union is in a very weak position,” Kreko told Al Jazeera.
Hungary is not the only EU member-state to have maintained ties to Russia during the Ukrainian crisis. Austria also said it will go along with the South Stream gas pipeline project, while Germany, where exports to Russia in 2013 equated to almost $50bn, avoided placing tough sanctions on Moscow before the Malaysian Airlines M-17 downing in eastern Ukraine.
Meanwhile, France said it plans to go through with the delivery of a mistral warship to Russia in a deal worth $1.6bn.
But so far, only Hungary has been accused of a democratic backslide. Last year, the European Parliamentadopted a non-binding resolution stating that Hungary was undermining the independence of its own judiciary and was rushing through legislation.
Goodfriend echoed similar concerns about the check on power in Hungary.
“A number of those checks and balances don’t exist here and with a government that has a two-thirds majority [in parliament], it’s especially important that they use that majority to ensure that they carry out legislation responsibly.”
Uptick in nationalism
Kreko said there are also signs that Orban is mimicking Putin’s strategies, such as removing his limits on power and increasing nationalist rhetoric.
In Orban’s July speech, he discussed how “paid political activists” working for NGOs with foreign funding were preventing reforms in the country; a month earlier, Hungarian authorities raided the offices of NGOs receiving grants from Norway over accusations thay they are politically biased.
Kreko said this is similar to when Putin took aim at NGOs by introducing a law that requires organisations using funding from abroad to register as “foreign agents”.
In May, Orban called for autonomy of ethnic Hungarians in western Ukraine, while in the east rebels allegedly backed by Russia were also demanding autonomy from Kiev.
It led to the Hungarian ambassador being summoned by the Ukrainian government, but government spokesman Kovacs said Hungary was simply asking for autonomy for minorities set out in international agreements.
According to MP Javor, other EU member states with fragile democracies could follow Hungary’s footsteps if the EU does not act.
“This combination limiting democracy and stronger dependency on Russia makes the Hungarian situation extremely [worrying] for Europe as a whole.”
Together-Dialogue for Hungary MEP Benedek Jávor has asked the European Commission (EC) to investigate the ‘Paks II’ nuclear power plant expansion deal that the government and Russian contractor Rosatom signed without a public procurement process in January.
Source: budapestbeacon.com
Jávor questions the existence of a government impact study on the construction of the two blocks at Paks, for which Russia will reportedly offer a credit line of up to EUR 10 billion. The agreement may also break European competition law, the MEP adds.
“Primarily I am suing over the impact assessment studies regarding the project, which the government has so far been reluctant to disclose, raising the suspicion that the project is completely ungrounded and prior assessment studies do not even exist. We have exhausted all of the options in Hungary, within and outside the Parliament, without any success,” Jávor told the Budapest Beacon.
According to Jávor, National Development Minister Miklós Seszták maintains that the impact study exists, “yet has so far failed to produce studies with concrete facts and numbers. All that has been handed out by the ministry is general information with no direct relevance to the project”.
Jávor’s case will also question the safety, transparency, legality and financial prudence of the agreement. “The EC can review the tendering failure, illegal state aid, the incident in 2003 when fuel cells were damaged at Paks and other issues. We think the planned investment today is not feasible within the European regulatory environment, as it obviously distorts the internal energy market.”
Jávor noted that “the Hungarian government is not planning to incorporate investment costs into energy prices. The Treaty on the Functioning of the European Union also requires member states to stabilize their finances and to reduce government deficits during economically advantageous periods. Committing to a EUR 10 billion state loan clearly endangers this commitment.”
The government special commissioner for Paks, Attila Aszódi, paints a far more glowing picture of the nuclear power plant extension, however. “Everyone is really content and happy around the plant,” he told ATV. With the government line seemingly that transparency can be retroactive too, Aszódi explained that “Hungary is drafting three agreements in preparation for discussions with Rosatom executives: on the planning, construction and launch of the new blocks, the delivery and disposal of nuclear fuel, and the operation and upkeep of the blocks.”
Whatever the ultimate motivation for the Paks deal, whether to plug a budget hole, as former economy minister Lajos Bokros claims, or to secure Hungary’s energy future, the deal has been shrouded in secrecy from the get-go. MP of the centrist, green party LMP Bernadett Szél said: “The purpose of [Prime Minister]Viktor Orban’s January trip to Moscow was concealed and lied about until the contracts with [Russian President Vladimir] Putin were already signed. What we know about the enlargement project we learnt from the Russian press.”
Szél told the Budapest Beacon that the government plan represents exemplary, short-sighted Fidesz cronyism. “This is a highly lucrative project through which the government will be able to pump funds to a network of politically loyal contractors, which in turn will help them to strengthen their grip on power in Hungary, in economic and political terms. This is not the first instance of Orbán-led governments resorting to major cash injections to help them either balance their books or finance loyal entrepreneurs: the seizure of Hungary’s private pension funds is a prime example for the former, while most state-funded projects can be mentioned as instances for the latter.”
Szél has less faith in EU legal institutions than her former LMP colleague Jávor, however. “Although I support every action aimed at reversing the decision to increase Hungary’s nuclear capacity, I believe we should all focus our efforts on acting on domestic fronts rather than call for international help, the efficacy of which remains highly questionable,” she said. “The government is making every effort not to leave any loose ends with either Brussels or Moscow, with high-ranking officials frequently traveling to both destinations for talks. Sadly, it is the Hungarian people who they do not deem necessary to keep in the loop.”
Jávor maintains that Europe now represents the best avenue for the opposition, and dismisses Aszódi’s claims that there have been “intense communication”, “public hearings” and “plentiful information” regarding Paks. The MEP says “to my knowledge there was one public hearing regarding the plant enlargement but the crucial questions remained unanswered. (Other hearings) were only held for potential sub-contractors about the prospective jobs concerning the enlargement project, not to inform the public about Paks II itself: let alone to allow them to have their say on whether or not they want new nuclear capacities.
“In the spring I personally went to a hearing on the licensing process for the site: the power plant representatives and authority officials did not respond to a single substantive issue, the most common response was ‘that is not relevant at this stage’ or ‘the requested information is not public’. For example, they refused to respond to how the placement of new units will take into account the fact that in summer there is already insufficient water from the Danube for the existing four units for shortages in cooling water. In their view, this issue is not related to the licensing of the site.”
Szél also rejected Aszódi’s recent assertion that “there (have been) public hearings, accessible to all, where we provide all the necessary information”. These claims are “quite simply preposterous”, according to her. “ I had to go to court to demand that the Hungarian authorities and the project management company release the information about Paks II, information that the public has every right to know,” she recalled.
Jávor said “neither the government, parliament or the authorities are willing to do anything to provide a clear view on these issues and to ensure the wider public that this is a well-founded investment that is advantageous to the Hungarian people. When the Kúria declared a referendum on Paks unconstitutional, we turned to the EC,” he added.
“We still do not know, for instance, the consequences of the 2003 Paks nuclear incident, and how much the incident cost. This information was not revealed either during an EP delegation visit last fall to Paks. We do not know whether Hungary needs the electricity from the new blocks in Paks. We do not know on what basis Rosatom has been selected, and the political commitments that were made by the Hungarian government to Putin for this investment. We know nothing except for the fact that there has been no economic calculation prior to the commitment of the Hungarian government.”
Aszódi is laconic on the costs of the Paks expansion: “Expense is relative. This deal will be cheaper than any viable alternative. It is not about reforming the whole system, just maintaining capacity. By 2032 Paks will be over 50 years old, so by then the new reactors will have been replaced. Technology moves fast,” he said, adding by way of example, “if I buy a tablet today, in two weeks it will be out of date.”
Many would argue that the rapid technological changes of our age are an argument for keeping our energy options open, rather than for signing long-term energy deals with foreign firms. “The cost estimates of the electricity produced by the new Paks unit have not been published, and according to the calculations of Aszódi will be around three times the open market price of today during the loan repayment period,” said Jávor.
According to Aszódi, “atomic energy means a one-off payment but after that it is cheaper. It will be cheaper than previous atomic energy and cheaper than renewable energy. I don’t like this opposition to nuclear power. (Energy sources) should be complementary,” he claimed.
Jávor questioned the sincerity and neutrality of Aszódi’s call for energy diversity, saying he is paid to promote the nuclear agenda and discredit alternative energy. Responding to his claims that there has been “intense communication” on Paks, Jávor said “Aszódi knows all about ‘intense communication’, since he presides over the Budapest Technical University’s Nuclear Technology Institute, which has had a number of contracts with Paks. These include, as far as we know, an advisory role on how to publicly discredit the arguments of anti-nuclear environmentalists.
“The media pours unilateral nuclear pro-arguments, while public broadcasters completely neglect the other side. For example state radio recorded an interview in which a professor discussed nuclear-free alternatives on its environmental show but was suppressed immediately before going to air. Information is really abundant but solely focuses on the perceived benefits of nuclear energy.” Meanwhile, Jávor said, “the state-owned energy firm MVM (which runs Paks), spends billions of forint on pro-nuclear PR and tours Hungary’s summer festivals and youth camps with its ‘nuclear trucks’.”
As for the country those youths will inherit, Szél said “Paks will serve as a major and definitive hindrance to all non-nuclear energy prospects in Hungarian energy policy for a century to come.”
European Union recently issued a ground-breaking proposal that calls for consumers to recycle 70 percent of their municipal waste by 2030, with the overall goal to reduce waste in landfills, Reuters reported. The new developments push the recycling rate even higher after the EU passed a proposal to curb recycling by 50 percent by 2020. In addition to urban waste, the proposal urges Europeans to meet a recycling rate of 80 percent for packaging waste by the same year.
Janez Potocnik, environment commissioner for the EU, said for the EU to compete in growing economies and global markets, it has to find ways to reuse its existing resources rather than send them into landfills. Resource efficiency may help companies save money as the EU said it hopes to shift toward a circular economy. Since it is costly for companies to extract raw materials, recycling may spur economic growth by saving on materials costs and investing in the recycling industry. Throwing away valuable resources is also a problem the EU hopes the rule will curb. To achieve its goal of lowering the amount of waste thrown into landfills, the EU said it will enact a ban prohibiting recyclables from being discarded in 2025.
“More recycling alone does not mean that Europe’s overconsumption of resources is actually reduced,” said Benedek Javor, spokesman for the Greens in the European Parliament, according to Reuters. “The top priority should be a greater focus on prevention of waste, with ambitious reduction targets.”
Some EU member states struggling to keep up with recycling targets
With these new rates, the challenge for the EU is trying to keep up with them. The existing recycling rates for member states of the EU vary significantly. The EU had a total recycling rate of 27 percent for municipal waste in 2012, Reuters reported, citing data from the EU’s statistics agency Eurostat. While Germany led member states with a recycling rate of 47 percent – close to the previously established recycling rate target of 50 percent by 2020 – Romania reportedly buried 99 percent of its waste.
EU competitiveness hinges on recycling opportunities
The EU hopes the new policies spark action in the recycling movement. Working with industrial players could help to curb waste even more by encouraging more innovation in the recycling industry and new sustainable business models that stress zero waste. The EU touted the economic benefits of increasing recycling opportunities as the new recycling targets have the potential to add 580,000 jobs to the economy.
“Moving to a circular economy is not only possible, it is profitable, but that does not mean it will happen without the right policies,” Potocnik said in a statement. “The 2030 targets that we propose are about taking action today to accelerate the transition to a circular economy and exploiting the business and job opportunities it offers.”
With the need to expand recycling infrastructure to achieve these rates, recycling companies may want to purchase more material handlingequipment to effectively process a greater number of recyclables and help keep on track to meet these recycling targets in the future.
The current proposal is expected to move forward to the Council and the European Parliament.
