Budapest — Hungary continues to buy billions of dollars of Russian oil and gas annually, despite most other Western nations’ cutting of economic ties with Russia after its invasion of Ukraine in February of 2022. Budapest also has sought to strengthen ties with Beijing, bucking Western efforts to reduce dependence on China. 

It has led some to label the country as Russia and China’s “Trojan Horse” in the West. What’s behind Hungary’s warm relations with Moscow and Beijing? Many analysts say Hungary is seeking to exploit global tensions to its own advantage.

Russian oil    

The southern branch of the Druzhba or “Friendship” pipeline brings thousands of metric tons of Russian oil across Ukraine and directly to the state-controlled MOL refinery on the outskirts of Budapest daily.  

Russia was once the European Union’s largest energy supplier, but the bloc banned Russian oil imports after the Ukraine invasion. Hungary, Slovakia and the Czech Republic demanded exemptions, however, claiming that as landlocked countries they cannot quickly diversify supply. 

While Slovakia and the Czech Republic have sought to reduce dependency on Russian energy since the ban came into effect, Hungary has struck new preferential deals to boost supplies from Russia. It is now Moscow’s biggest energy customer in the EU, purchasing $343 million worth of oil and gas in January of this year alone. It is also building a new pipeline to take the Russian oil products into Serbia.

In addition, Russia is building the new Paks II nuclear power plant in Hungary, on the bank of the Danube River, south of Budapest.

Ukraine anger

Ukraine says Russia spends its energy revenue on weapons to kill Ukrainians. An adviser to Ukrainian President Volodymyr Zelenskyy even accused Hungary of being complicit in alleged Russian war crimes through their energy deals with Moscow. “If you’ve seen the video where Russians cut the head off a Ukrainian soldier — the Hungarians are paying for the knife,” Oleg Ustenko, an economic adviser to Zelenskyy, told the Politico website last April, after Hungary signed a deal to boost gas imports from Russia. 

Hungarian Foreign Minister Peter Szijjarto rejected criticism of the deals with Moscow.

“The security of Hungary’s energy supply requires uninterrupted transportation of gas, oil and nuclear fuel. To meet these three conditions, Hungarian-Russian energy cooperation must be uninterrupted. It has nothing to do with political preferences,” Szijjarto said at a press conference in April following the agreement.

Moscow ties

Hungary’s links with Moscow go far deeper than oil and gas. Prime Minister Viktor Orban has repeatedly rejected Western calls to sever economic ties with Moscow. 

“Brussels’ strategy for Ukraine has failed spectacularly. Not only on the battlefield, where the situation is catastrophic, but also in international politics. We have said in vain that this war is a brotherly war of two Slavic nations, and not ours,” Orban said in his annual televised address February 17.  

Orban has criticized EU sanctions on Russia, blocked European Union financial assistance for Ukraine, and delayed ratifying Sweden’s accession to NATO. He has made Hungary the outcast of Europe, said analyst Peter Kreko.      

“No one has gone so far in demolishing democratic institutions, turning against the Western institution system and cultivating relationships with Russia and China,” Kreko told VOA.    

Chinese investment

China is financing a $3.8 billon high-speed railway from Budapest to the Serbian capital Belgrade, a flagship project of its Belt and Road Initiative. Hungary was among the largest global recipients of Chinese BRI investment in 2022.  

Critics say the government has prevented any oversight of the deals.

“There are arbitrarily designed and swiftly adopted regulations by parliament to prevent any insight or oversight in and over the Russian investment in the nuclear power plant or the Chinese investment into the railway track that is being developed from Belgrade to Budapest. These are major investments. In the Hungarian context these are unprecedented investments,” Miklos Ligeti, of the anti-corruption organization Transparency International, told VOA.  

 

The Hungarian government rejects claims of corruption and says details of the investments were kept secret to secure a loan from the Chinese Export-Import Bank. Some 85% of the financing comes from China, according to Reuters.

Orban worldview

Hungary’s warm relations with Moscow and Beijing are based on a geopolitical assumption, Kreko said.    

“Where there is a new Cold War-type conflict emerging between China and the West. And Orban wants to play this bridge role between the two. And it’s also increasingly about a notion that the Western liberal democratic order is about to collapse, and we have to look for new models, be them in Russia, be them in China,” Kreko told VOA.

Viktor Orban and his Fidesz party have a large majority in parliament and are well ahead in the polls. 

“The chance of any governmental change is miniscule. It means that he really has a lot of time to deal with foreign policy. And he does not want only to be the prime minister of Hungary – he wants to be a world class player,” Kreko said, adding that Orban relishes being in the center of world attention.

“And this is partially one goal of his game. But the other goal of his game is — through veto, through obstruction — to have an influence on the processes, and he wants to be around the important negotiation tables.”

“He’s quite open about his negative attitude towards the EU, but I think it is increasingly [against] NATO, as well. So, he wants to weaken these institutions from within because he feels they pose a threat to his sovereign decision making,” Kreko said.
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