A Hungarian Pro-Moscow Course?

Eight hours — this is how long it took the Hungarian authorities to admit that Ukraine was a victim of Russia’s aggression. This was done by Prime Minister Viktor Orbán in a video published after 1 pm on Facebook after the equivocations of his foreign minister. “This morning Russia attacked Ukraine militarily,”¹ the Prime Minister said and immediately outlined his government’s position: “Hungary must stay out of the war conflict. For us, the safety of our citizens is the most important thing, so under no circumstances will we allow soldiers or military equipment to be sent to Ukraine through our territory. Of course we will offer humanitarian aid.”

For Orbán, the war came as a double shock. First, there is no indication that he knew it would happen. Like many observers, despite warnings from the US and British intelligence services, he was likely reluctant to believe that Putin would attempt a full-scale invasion. In early February, already after the tension between Russia and Western countries had escalated and more than 100,000 Russian troops were waiting on Ukraine’s eastern and northern borders, he traveled to Moscow to talk with Putin about bilateral relations.

Second, the war inevitably changed the dynamics of the campaign ahead of the parliamentary elections scheduled for April 3; elections that, due to six major opposition parties joining forces, a two-year-long coronavirus pandemic and run-away inflation, were assessed as the most difficult for Fidesz, Orbán’s nationalist party, since returning to power in 2010. In the heat of the campaign, Russia’s aggression and the surprising resistance of Ukrainians meant for Orbán that he had to face uncomfortable questions about his own relationship with Putin.

East Winds

At a press conference held four days after the election, Orbán dated the sources of his opening to Russia to 2008: “[At the Bucharest summit] it was decided that the West did not want the Ukrainians and the Georgians to join NATO. At that point, I understood that a brand new era was coming […] We launched a new Russia policy, at that time I reached out to President Putin, so around 2009. I understood that Russia was going to be part of the European security architecture with a new border being created separating the world of NATO from that of Russia, and in between there was going to be a system of buffer states: Georgia to the south, Ukraine to the east.”²

PM Orbán said on the press conference that HU has adopted its Russia policy to the changing international environment and now ‘a new era is about to begin’. Watch the video below for PM Orbán’s thoughts on the past and the future of HU’s Russia policy! pic.twitter.com/lNm1C6wXQe

— Balázs Orbán (@BalazsOrban_HU) April 7, 2022

The geopolitical logic – about the peaceful coexistence of two worlds separated by a neutral zone – was reinforced with economic arguments. According to the investigative journalism center Direkt36, György Matolcsy, Orbán’s economic advisor and current head of the Central Bank, spelt out a theory about the rapid development of the East, which after the economic and financial crisis of 2008 “will take the place of the West in global politics.”³ This was the origin of the concept of the “eastern opening,” sometimes called the “east wind doctrine” after the catchphrase used by Orbán in November 2010: “Hungary sails under the western flag, but the wind of the world economy blows from the east.”⁴

Since the onset of Fidesz rule, Hungary has sought to strengthen contacts with countries in the broader East: from Russia, Turkey, Central Asia and the Persian Gulf to the Far East. The Prime Minister’s office, especially Orbán’s close advisor Péter Szijjártó, has been involved in the implementation of this policy, and provided it with even more momentum after taking over the foreign ministry in September 2014. A few weeks before his arrival, the ministry was renamed the “Ministry of Foreign Affairs and Trade” — and this is a good illustration of the priorities of the eastern opening.

Unlike in the 1990s, when Fidesz, influenced by its own dissident experience in dealing with non-democratic regimes, prioritized the promotion of human rights and civil liberties, the bulk of diplomatic efforts were directed at gaining sources of investment and developing trade relations.

Although the new eastern policy was a departure from Orbán’s practice and language, it was in line with the foreign policy of Fidesz’s predecessors. The turn to the east was initiated by the post-communist governments, which in the first decade of the new century built up a strong network of contacts, mainly with China and Russia.

The continuation and then strengthening of this trend can be explained not only by the increased significance of the East on global markets or the problems of Hungary weakened by its 2008 economic downturn, but also by political calculation. Changes initiated by Orbán in his country were criticized by EU institutions and led to an unprecedented cooling of relations with the USA during the presidency of Barack Obama. The dialogue with countries from the East was easier: they did not expect any specific solutions in economic policy and were not interested in constitutional reforms. They often received Orbán with honors, while many leaders in the West treated him with disdain.

The effects of the eastern opening are best measured by economic statistics. In 2014, sales of Hungarian goods and services to non-EU countries accounted for 21 percent of exports; seven years later, they had grown by only two percentage points.⁵ The foreign trade balance with Asian countries is still negative.⁶ However, exports to the most important partners, i.e. China, Japan, Turkey and India, roughly doubled between 2010 and 2021, and even tripled in the case of some other countries (South Korea, Qatar).⁷ In contrast, the value of exports to the country to which Orbán has paid most attention, Russia, has shrunk over the same period. It is not even in the top ten of Hungary’s trade partners.⁸

Russia: Secret Investments and Inspiration

Under the rule of the post-communist Ferenc Gyurcsány, Hungary – in the opinion of the analysts of the think tank ECFR – belonged to the group of “friendly pragmatists”.⁹ The authors pointed out that the bilateral agreements Budapest made on gas imports and storage, in the hope of becoming Gazprom’s hub in Europe, helped to undermine the EU’s Nabucco pipeline. “While they are not active promoters of Russian interests within the EU system, they tend to oppose actions which they fear might irritate Moscow. They take full advantage of the opportunities offered by Russia’s economic growth,” they wrote about Hungary and other pragmatists. At the same time, Hungary supported a stronger EU role in the post-Soviet region.

Orbán went further than his predecessors, but so did other countries such as Germany and France that were expanding their network of business contacts with Putin’s Russia.

In addition to economic benefits, there was the idea, promoted by Chancellor Angela Merkel, of involving Russia – considered a difficult but pragmatic partner – in as many economic and energy interdependencies as possible, so that breaking them would become unprofitable for both sides.

Merkel saw this as a guarantee of peace in Europe – and no event, neither the war in Georgia, nor the annexation of Crimea and the war in Donbass, nor the attempts to liquidate Putin’s domestic opponents, undermined her belief in this theory.

Orbán is among the proponents of maintaining relations with Russia on a business-as-usual basis. There is a difference, however, between him and Gyurcsány on the one hand, and Germany or France on the other. As András Rácz, an expert on Russia, pointed out, Putin has not really taken steps to build soft power in Hungary; this was not helped by the lack of a common border, linguistic proximity and positive past experiences. Yet, Rácz points out, attracting the Hungarian public was not at all necessary. For the Kremlin, “in terms of gaining influence, it focuses almost exclusively on the Hungarian political and economic elite, at which it has been remarkably successful in recent years.”¹⁰

Orbán has deepened the Hungarian energy dependence on Russia to a degree unmatched by his predecessors.

Russia supplies around 95 percent of imported natural gas;¹¹ its supplies jumped by 29 percent between 2016 and 2019, according to calculations by the Polish Economic Institute (PIE), a record increase in the EU.¹² The contract signed last year commits Hungary to receiving 4.5 billion cubic meters of gas for 15 years through the TurkStream pipeline – the southern equivalent of Nord Stream connecting Russia to Turkey via the Black Sea, thus bypassing Ukraine.

Russia is also the source of 60-65 percent of the oil processed annually by the MOL group, an oil and gas processing company,¹³ and an important provider of bituminous coal; its supplies increased by a record-high 98 percent between 2016 and 2019, according to the PIE. For Budapest, it is not independence but price that is crucial: the reduction of energy prices for households(rezsicsökkentés) contributed to Fidesz’s victory in the 2014 elections and to this day are being pitched as one of its greatest achievements.

The investment that met with the biggest media headlines was a 2014 contract with Rosatom for the – incessantly postponed – expansion of two nuclear units at the Paks power plant for a loan of 10-12 billion euros; one of its subcontractors is Lőrinc Mészáros, Orbán’s childhood friend and the richest Hungarian on the Forbes list. For his role in the project, the University of Debrecen awarded Putin with the honorary title of Honorary Citizen. Budapest also bought 2 million Sputnik V coronavirus vaccines, which have not been approved by the EU, and invited the International Investment Bank, accused of espionage, to Budapest.

The investigative journalism center Direkt36, which has been exploring Russian penetration in Hungary for years, found that Putin’s men bought permanent residence permits in Hungary (along with Schengen visas); this includes Sergey Naryshkin, head of the Foreign Intelligence Service.¹⁴ Another investigation found that the Russians had hacked the IT system of the Hungarian Foreign Ministry headed by Szijjártó, who late last year was awarded the Order of Friendship by his Russian counterpart “for the development of Hungarian-Russian relations”.¹⁵

“Hungarian diplomacy has virtually become an open book for Moscow,” the journalists write.

The true nature of Orbán’s relationship with Putin is unclear. The number of concessions to Russia and the frequency of the meetings  – they have met twelve times in twelve years – makes some analysts speculate that Russia has some discrediting materials on Orbán. There is no evidence, however, for this. The conjecture is fuelled by the secrecy veiling the biggest projects, namely the extension of the gas deal and the loan for the expansion of the Paks power plant. If blackmail is not involved, it seems likely – because a similar mechanism is at work in the distribution of EU funds¹⁶ – that the overpriced and non-transparent projects are designed to bring profits to businessmen linked to Fidesz.

Orbán and Putin share the opinion that business should be dependent on political power, which is to be strictly hierarchical and concentrated around the leader. Common beliefs extend, however, to other issues as well. In his famous 2014 Băile Tuşnad speech, in which he outlined the concept of the “illiberal state,” Orbán mentioned Russia – along with China, Turkey and other countries – as a development model for Hungary.¹⁷ His fascination with Putin’s effectiveness has been reflected in his actions. Orbán reduced the independence of control institutions either by abolishing them or putting loyalists in charge; enforced an electoral law favorable to Fidesz; and created a close-knit oligarchy that took over most of the media. And the media have turned into a propaganda machine using Russia-like anti-Western and confrontational language.

As Rácz stated, however, Putin’s Russia is a model of how to govern, but not a geopolitical reference point.

Despite its belligerent rhetoric, Hungary has not once blocked EU sanctions on Russia.

It even hesitantly joined in the expulsion of Russian diplomats after the attempted poisoning of Sergei Skripal and his daughter, even though, as another Direkt36 investigation showed, it removed only one diplomat and it was done in agreement with Moscow.¹⁸ Orbán also makes sure that Russian interests are counterweighted by other influences. Two controversial Chinese projects have appeared in Hungary: the Fudan University campus¹⁹ and the Budapest-Belgrade railroad line. Germany retains its dominant position in the economy anyway: in 2019 it accounted for a quarter of Hungarian exports.²⁰

Ukraine: the Far Abroad

In line with the basic assumption of the eastern opening, Orbán has been developing trade relations with Ukraine, Hungary’s largest neighbor – between 2010 and 2021, Hungarian exports grew by nearly 150 percent²¹ – but never considered it anything more than a buffer zone or – in his own words – “something” between Hungary and Russia – “we may even call it Ukraine”.²² With weak historical ties, Hungary’s policy towards Ukraine has been subordinated to two other factors.

One is the prioritization of Russia, Hungary’s major partner in the east, whose interest in Ukraine contributed to keeping Orbán away from what the Kremlin views as its “near-abroad”.²³

At times, this prioritization has manifested itself in a manifestly dismissive attitude toward Ukraine. In 2014, the year of the annexation of Crimea and the beginning of the war in Donbass, Orbán first demanded autonomy for the Hungarian minority, and then – three days after meeting with Gazprom’s CEO – shut down the reverse pipeline transporting gas to Ukraine for four months. Shortly thereafter, during a freeze in Russia’s contacts with the West, he received Putin in Budapest as the first EU leader in nine months.²⁴

A second factor casting a shadow over the relationship are the rights of the Hungarian minority. Numbering more than 150,000, they make up about 10 percent of the population of Transcarpathia, Ukraine’s westernmost region. Hungarians have their own organizations, properties, schools, media, a theater, monuments and streets, and in some towns, administrations derived from their community. The proximity of the border with Hungary, however, and Kyiv’s lack of financial support for Hungarian-language schools means that they – especially the younger generation – are poorly integrated into the Ukrainian community and have a poor command of the Ukrainian language.

Dialogue between the two countries radically deteriorated after the Ukrainian parliament passed a law in 2017 that restricted minority language instruction to early childhood education with several other laws requiring Ukrainian to be used in most aspects of public life, scheduled to come into force in subsequent years. Targeting the Russian language as part of derusification efforts and attempting to reinforce Ukrainian national identity, the new legislation backfired on Hungarians. In response, Budapest blocked meetings of the Ukraine-NATO Commission and accused Kyiv of nationalism and extremism; in the opinion of the head of Orbán’s chancellery, the language law was “semi-fascist”. ²⁵

Relations with the neighbor would have developed better if not for the Maidan Revolution. The pro-Western course taken by the administration of Petro Poroshenko, and later Volodymyr Zelensky, resulted in the attempts of derusification of the public space and the educational system, and the dilution of decision-making centers as a result of decentralization and deoligarchization. Maintaining the status quo ante with influential oligarchs and a regime dependent on Moscow and not interested in constraining minority rights would have created a favorable ground for building relations, including economic ones. In this sense, the interests of the EU and the U.S., who were intent on drawing Ukraine into their sphere of influence, and the Fidesz elite were not fully identical.

One might be tempted to speculate that with strong political and business ties, conflicts over the rights of ethnic Hungarians would be hushed down by both sides, as they were in the relations with Serbia. The situation of the Hungarian minority in Vojvodina and the different interpretations of the events of World War II were the subject of neighborly talks until the coming to power of the Prime Minister and then President Aleksandar Vučić. After a personal relationship between him and Orbán was established, these conflicts disappeared from the agenda.

For the pragmatic Orbán, minorities – financed by Budapest and equipped by Fidesz with a simplified path to Hungarian citizenship and electoral rights – are one of the pillars of electoral support on the one hand, and an instrument of pressure on neighboring states on the other.

Russia’s invasion of Ukraine came at a time of tense relations between Budapest and Kyiv. Orbán’s reaction was similar, however, to that of 2014, when the dialogue was correct. On the one hand, it manifested itself in routine assurances of support for Ukraine’s sovereignty and territorial integrity and tacit approval of sanctions, and on the other in efforts to maintain economic cooperation and not isolate Russia. In both cases, phrases about impartiality were used, the co-responsibility of Russia and Ukraine was implied; in both cases the primacy of ethnic rights of Hungarians was emphasized, which in the conditions of war fitted the Kremlin’s narrative. The only difference was that in 2014 Orban’s mild business-like reaction was shared by the majority of other EU states, while eight years later it made Hungary rather isolated within the union.

Neutrality as the Key to Victory

The question remains as to why Orbán has not changed this course – and this despite pressure from the West and the enormity of Russian crimes, including the murders of Ukrainian civilians in the suburban town of Bucha, which were revealed on the eve of the election. The shortest answer is that he did not need it in any way. Years of flirting with the Kremlin have convinced him that – despite the public’s general distance from Russia and the distaste of a few people around him for the memory of the 1956 Revolution – it has no impact on electoral preferences. Many supporters, even if they view fraternizing with Putin with distaste, rationalize it as something that at least brings the benefit of energy price cuts.

Orbán, at first taken by surprise by the war, quickly and efficiently adapted the dynamics of the election campaign to it.

He formulated a kind of doctrine of neutrality. By opening the borders to refugees from Ukraine and declaring that he supports that country’s efforts to join the EU, he was fulfilling his basic allied tasks and not upsetting the unity of the West. At the same time, however, he communicated to voters that “this is not our war” and “Ukraine is not fighting for our freedom.” In practice, this doctrine manifested itself in harsh opposition to the transit of arms through Hungarian territory and, together with Germany and several other countries, the imposition of sanctions on the Russian energy sector. This maneuver had three objectives.

First, to prevent a break-up with Putin. The propaganda and Orbán himself firstly equated Putin and Zelensky in responsibility, passing over the crimes of the former, and later openly presenting Zelensky as a dangerous warlord who had provoked the Russians. This was largely an ambition-driven response to Zelensky’s taunts, who publicly demanded more decisive action from Orbán. On the night before the election he even called him “virtually the only one in Europe to openly support Mr. Putin”.²⁶ Generally, the point was that the Hungarian elite believed that the war would quickly end and things would return to their normal course of doing business with Moscow over Kyiv’s head.

Second, Orbán avoided something that has always come hard to him, that is, admitting he was wrong.

During the campaign, this could have cost him a lot. Criticizing Putin would have meant questioning his own foreign policy of the past decade and admitting that he had dragged Hungary into a web of dependence that was above the norm even for the asymmetrical nature that inevitably characterizes Russian-Hungarian relations. Had the polls shown that Hungarians expected a slight change of course, the pragmatic Orbán might have sacrificed a loyal foreign minister. He believed, however, that with the help of propaganda and his own rhetorical efforts in the campaign, he would be able to format the voters accordingly.

Third, Orbán could present himself as a beacon of reason, not so much in the context of Putin’s actions, but of the opposition leaders who joined the Western chorus of indignation. This is how a new electoral slogan was invented ad hoc: “peace and security,” with Orbán appointing himself its guardian. Anyone who expressed support for Ukraine was labeled a supporter of war. The six-party opposition bloc could not find a response to this. It was unable to successfully promote the narrative that Orbán was a ‘traitor’ who had hampered Hungary with humiliating ties to Adolf Hitler’s spiritual successor. In this way, Orbán turned a losing situation into the key to electoral victory.

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