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7th Jul 2022

Hungary wants EU billions for Russia oil-ban deal

  • Foreign minister Péter Szijjártó put a figure on Hungary's infrastructure upgrade of €15-18bn (Photo: consilium.europa.eu)
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Hungary is continuing to block an EU oil embargo on Russia, but there is optimism its objections can be overcome.

The Hungarian foreign minister, Péter Szijjártó, put a price on Budapest's compliance in a Facebook post while meeting fellow EU ministers in Brussels on Monday (16 May).

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"The EU should offer a solution: to finance the investments and compensate for ... the [ensuing] price rises which necessitates a total modernisation of Hungary's energy structure in a magnitude of €15-18bn," Szijjártó wrote.

The Hungarian prime minister, Viktor Orbán, also attacked EU sanctions in a speech in Budapest the same day.

"The war and the European policy of sanctions given in response, has created an energy crisis," he said.

"All this will bring about the era of recession, when a decline in economic output," he added.

The numbers that Szijjártó cited inside Monday's meeting were "different", the EUs foreign policy chief, Josep Borrell, told press late on Monday.

But Borrell underlined that Hungary's objections had a purely technical and economic nature, rather than being linked to its historically close ties to Moscow, making them easier to overcome.

"It's not about their relationship to Russia," Borrell said.

He also dismissed reports that Hungary's oil veto was linked to its disapproval of EU intentions to blacklist Russia's top cleric, Patriarch Kirill, for his support for Russia's war on Ukraine in the same package of sanctions.

"I'm not talking about holy oil, we're talking about oil. I don't see the link, frankly speaking," Borrell said.

The talks on how to compensate Hungary for adapting its pipelines and refineries and for being forced to buy more expensive, non-Russian oil in future will now be taken up by EU ambassadors later in the week.

Borrell indicated the talks could drag out for a "week or two". But Austria, Germany, and the Netherlands voiced more optimistic timeframes.

"I am confident that we will find agreement in the coming days," German foreign minister Annalena Baerbock said. Austrian foreign minister Alexander Schallenberg also spoke of a likely deal "in the next days".

For all the optimism, Lithuania voiced dismay that "the whole union is being held hostage by one member state", in the words of foreign minister Gabrielius Landsbergis.

The Ukrainian foreign minister, Dmytro Kuleba, who attended Monday's meeting in Brussels, also warned: "To stop the Russian war machine, we must deprive [Russian president Vladimir] Putin of money".

"The European Union ... has to send a message to prime minister Orbán," Kuleba added.

"We have to get rid of this strong dependency [on Russian energy] that makes us very vulnerable," Borrell also said.

The oil embargo is just one part of Europe's multi-pronged reaction to Russia's invasion.

Oil, plus Nato

Finland and Sweden have also opted to apply for Nato membership and the EU is trying to accelerate Western Balkans integration in order to prevent the spread of Russian influence in the region.

The EU foreign ministers were also joined by their six Western Balkans counterparts in Brussels on Monday.

Borrell warned countries such as Serbia, which have not mirrored EU sanctions on Russia, that they could not remain neutral in the current conflict.

"To maintain close ties with the Putin regime is not compatible with building a future with the EU," he said.

He also bemoaned the fact Bulgaria was still vetoing opening accession talks with North Macedonia due to a bilateral dispute on history and language and said if this was not resolved by July — the end of the French EU presidency — this could create a "serious crisis" for EU enlargement policy.

Meanwhile, if Finnish and Swedish Nato membership was expected to proceed quickly due to their close ties with the alliance, then Turkey put this in doubt on Monday.

Turkey has accused the Nordic countries of supporting Kurdish separatist groups which it calls terrorists.

Finnish and Swedish diplomats had said they would travel to Ankara this week to try to resolve the issue.

But Turkish president Recep Tayyip Erdoğan indicated Monday the dispute would have to be resolved at a higher level instead.

"They are coming to Turkey on Monday. Are they coming to convince us? Excuse me but they should not tire themselves," Erdoğan told press.

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After the EU Commission president Ursula von der Leyen's Budapest trip, Hungary suggested it wants EU funds to offset the extra costs from receiving different oil sources, and the increased energy prices the planned Russian oil embargo entails.

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EU leaders meet to break deadlock over oil ban

EU officials have been discussing the option of temporarily exempting oil transported through pipelines from the sixth sanctions package — leaving more breathing space for central European countries.

Agenda

Economic worries and Hungary on the spot Next WEEK

Eurozone finance ministers will discuss the economic worries with the backdrop of Russia's invasion of Ukraine, agriculture ministers are set to talk food prices, and EU affairs ministers will put Hungary on the spot in the Article 7 procedure.

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