Can Orbán Break Out of the Diplomatic Isolation?

Hungary’s PM Viktor Orbán has been practicing seesaw politics between the East (Russia) and the West (Germany) for years. His aim is to exploit the relations with Russia and with Western partners alike. His pragmatic approach has not been without examples and predecessors in Europe. However, he made two mistakes which put him in a pariah status for Hungary’s allies in the EU, NATO and in the CEE region. Firstly, he talked about Eastern authoritarian regimes as his models several times and expressed his aim to transform Hungary into an “illiberal state.” Due to the government’s “freedom fight” against the EU and a series of “illiberal actions” since 2010, Western partners had become suspicious about the Hungarian government’s commitment to the EE already before the crisis in Ukraine started. And secondly, Mr. Orbán did not recognize that the crisis in Ukraine created a completely new situation, and changed the rules of the game. With the Cold War logic re-entering into Europe, everybody has to take sides. When Mr. Orbán kept on with his balancing messages and criticism of the sanctions, he fuelled the distrust of Hungary’s Western allies. The “illiberal” image and the continuing friendship with Russia represent the main obstacles of breaking out of the diplomatic isolation. Orbán wanted to end this isolation through the visit of the German chancellor at the beginning of February, and then his visit to Ukraine and Poland. However, his attempt completely failed, mainly due to the Russian president’s visit to Hungary just two weeks after Mrs. Merkel.

After the relations with the US became frozen cold following the US entry ban in October 2014 to some (mostly unknown) allies of the prime minister due to corruption issues, and after Orbán could obviously feel the disadvantages of his diplomatic isolation, he decided to launch a diplomatic campaign in order to improve the tarnished image of himself and his government. The main Hungarian strategy to counterbalance the tarnished American-Hungarian relations was the reconciliation with Germany. There are two main reasons to do this. First, Germany is practically Hungary’s main investor and export partner. German and Hungarian growth figures are generally running in parallel. And the second reason is that Orbán hoped that Germany, a country with a long history of good economic and political ties to Russia, will show more empathy towards Orbán’s “Eurasian” economic extension plans, and to the Eastern Opening in general. For Orbán, two countries matter the most: Germany, because it creates jobs, and Russia, because it provides energy.

Hungarian diplomacy did its best to consolidate the German-Hungarian relations and prepare a convenient ground for Mrs. Merkel’s visit. Besides the fact that Mr. Orbán gave several interviews to German media outlets in order to improve the government’s image, the government made several factual gestures towards Germany (and generally, towards the West) as well. First and foremost, on January 1, 2015, Hungary restarted its gas transfer towards Ukraine which was suspended suddenly in late September 2014, just three days after Gazprom chief Aleksey Miller’s secret talks with Mr. Orbán in Budapest. Mrs. Merkel praised this step during her visit to Budapest several times. Secondly, Hungarian government started negotiations on the disputed advertisement tax with the international media outlet RTL—and finally promised to cut the tax that mostly punished Bertelsmann’s RTL. Thirdly, Orbán acknowledged the Hungarian state’s responsibility for the Holocaust in a speech on January 26. Hungary also supported the extension of sanctions on Russia in the European Union foreign minister meeting in Brussels on January 29 (like it has every previous decisions on this issue).

Seemingly, the success of this strategy was that Angela Merkel accepted the invitation of the Hungarian side and came to Hungary at the beginning of February. However, already before Merkel’s arrival there have been signs of the icy nature of German-Hungarian relations. A clear signal was that German diplomacy has long postponed the visit whose preparation took a very long time.

But while the Hungarian government desperately tried to present Angela Merkel’s visit as a great success, Mrs. Merkel’s visit to Hungary proved to be rather a fiasco for Hungary’s PM Viktor Orbán. Although Hungary’s government had made huge efforts to meet German expectations, PM Orbán had to listen to the chancellor’s diplomatic yet strong and determined criticism during a joint press conference. Mrs. Merkel’s visit revealed clear disagreements between the chancellor and PM Orbán over the concept of illiberal democracy, the treatment of NGOs and the media, and the required policy towards Russia. While Mr. Orbán took a permissive position by emphasizing Hungary’s dependence on Russian energy supply and the necessity of Russia’s inclusion in the European economy and the joint economic space from the Atlantic to Vladivostok, Mrs. Merkel underlined the necessity of the sanctions and considered Ukraine’s territorial integrity and the settlement of the crisis between Russia and Ukraine prerequisite for normalizing the relations between Russia and the EU. Following the political fiasco, the government’s propaganda machine launched a controversial PR stunt to shift the focus from the political criticism to the successful business agreements made during the negotiations. However, the leaked information about a new BMW manufacturing plant and the expansion of the existing Mercedes-Benz plant was soon denied by both companies.

Although the fact that Mrs. Merkel’s visit helped Mr. Orbán send a message to the Hungarian public that he is not treated as a pariah in the West, his attempt to position himself as a mediator between Russia and the EU clearly failed. Furthermore, the visit made clear that there is an agreement between Mrs. Merkel and Mr. Orbán only in general questions and on the surface regarding the policy towards Russia. Thirdly, the leaked information on high-level business agreements that proved to be false or half-true just deteriorated the government’s credibility both domestically and internationally. Due to all this, Mrs. Merkel’s visit failed to prove Hungary’s acceptance among the Western partners even though Mr. Orbán stressed many times during Mrs. Merkel’s visit that Hungary is committed to support Germany’s position on the foreign policy.

Just two weeks after such a half-hearted reconciliation with Germany and the Western partners, Mr. Putin’s visit to Budapest revealed the full failure of Hungary’s foreign policy strategy. Mr. Putin’s visit came at an inconvenient time for Mr. Orbán since it demonstrated Hungary’s dependence on Russia and that the country is hemmed in between Russia and the West. In order to change that image, the Hungarian government tried to attribute major importance to Mr. Putin’s visit beforehand by listing the issues (e.g. terms of a new long-term gas treaty, Paks 2 nuclear plant, Minsk agreement, possible purchase of Sberbank) that would be discussed by Mr. Orbán and Mr. Putin as well as the agreements to be signed during the visit (e.g. agreement between the health and education ministries of the two countries, treaty on the opening of a Hungarian general consulate in Russian Kazan and a memorandum about the diplomatic calendar for 2015). However, in reality, none of the agreements would have required Mr. Putin’s visit which was against the EU consensus about freezing bilateral meetings between Russia and EU member states since the shooting down of Malaysia Airlines flight MH17.

Nevertheless, the visit was a clear success for the Russian president and a disaster for Mr. Orbán’s appreciation among Western allies. Through his visit to Hungary Mr. Putin was able to declare that there are EU and NATO members that are still highly supportive towards Russia and give him a warm welcome even in times of tense relations (he could express the same in Cyprus). At the time when the fighting in Debaltseve intensified putting the fragile Minsk II agreement to risk, Putin was able to send a message to the European, American and Ukrainian leaders about the conflict, with the prime minister of a member state on his side.

The visits of Mrs. Merkel and Mr. Putin made obvious that Mr. Orbán’s seesaw politics between the East and the West had failed and that the balance has toppled. The meeting and especially the press conference between the Russian president and the Hungarian prime minister was much friendlier than the rather frozen Merkel-Orbán meeting.

The friendly relations with Russia might not only be based on the acceptance of Hungary’s dependence on Russian energy supply or certain ideological and practical commonalities regarding the “illiberal tendencies.” Hungary is going to receive a EUR 10 billion loan from Russia to build two new nuclear reactors within the next decades. However, the agreement is kept secret and the conditions have not been made public yet. Without publicity, the deal poses a huge risk of corruption. On the other hand, the “cheap energy” is a fundament of Orbán’s domestic populist policies. He needs Russia to provide his voter base with cheap gas which was the main reason of his re-election in 2014 national elections.

The failure and Hungary’s isolation became evident during Mr. Orbán’s visit to Warsaw just two days after the friendly handshakes between him and Mr. Putin. Besides being Hungary’s traditional ally and closest partner in the CEE region, Poland is a strong supporter of Ukraine and committed to halt Russian aggression in Europe. Based on this, it came as no surprise that the Polish Prime Minister Kopacz criticized Hungary’s stance towards Russia almost explicitly underlining the crucial importance of a united European position. Ms. Kopacz described the talks between her and her Hungarian counterpart as hard and straightforward. While at the joint press conference the Polish PM underlined the duty of Poland and Hungary towards the nations fighting for independence and described the events in Ukraine as Russia’s aggression, Mr. Orbán emphasized the necessity of Ukraine’s constitutional reform and a common Eurasian economic space between the EU and Russia— in line with Mr. Putin’s rhetoric. Even Kaczinsky, the biggest former fan of Orbán, declared his disappointment and practically sent a message that Orbán betrayed Europe.

The fiasco in Warsaw was a clear sign of the isolation of Hungary due to the government’s foreign policy strategy. Even though Orbán would be ready to make further gestures towards Western partners in order to reconcile them, breaking out of the isolation would require a clear turn which he is unlikely to be ready to make due to domestic reasons and the benefits he expects from the Russian relations. While we cannot expect on the one side that Hungary alone will be breaking the EU consensus over sanctions in the future, Hungary can remain an important member in the club of sanctions-critical EU member states along with Greece, Cyprus, Slovakia, Czech Republic and Austria. However, the faith of Orbán’s foreign policy will depend on the events in Ukraine. If the Minsk II agreement will not hold and the fighting intensifies (e.g., Mariupol will be attacked by the rebels), Germany and the EU will be forced to take a harsher stance against Russia. In such a scenario, Hungary’s balancing attempts will not be tolerated anymore and Mr. Orbán will be forced to take a clear stand.