Institute of Central Europe
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Civil defence system in Estonia

The civil defence system in Estonia is part of a comprehensive model of security, in which society actively participates in the process of building the country’s resilience and is able to respond independently to military and non-military challenges. The peculiarities of the country’s civil defence system are: 1) the use of innovative communication solutions; 2) the promotion of citizen participation in volunteer organisations; and 3) the promotion of patriotic values, which brings Estonia closer to the model of Finland.

Civil defence in Estonia’s security policy. Civil defence refers to the readiness of the state and society to notify citizens of threats, undertake rescue operations, evacuate, provide shelter, and offer medical first aid as well as social support in emergency situations. It is part of a broad conception of security, the provision of which depends not only on military capabilities, but also on non-military ones, including the effectiveness of public institutions and the actions of the private sector and civil society (“IEŚ Commentaries”, no. 800). From this perspective, civil defence is one component of a comprehensive – total – view of security, which consists of military defence, international action, domestic and internal security, maintenance of the continuous operation of the state and society, and strategic communication (“IEŚ Commentaries”, no. 824). This type of framing, originally used during the Cold War by the Kingdom of Sweden, is mainly characterised by states with limited defence capabilities, for which defensive actions are important.

In practice, civil defence consists of increasing resilience, mutual aid, and self-reliance in a crisis situation, as well as active public participation and support for military resources during an armed conflict. This resilience is shaped both by state and public institutions (construction of the required infrastructure, including early warning systems and temporary shelter points, carrying out rescue and evacuation operations), private enterprises, non-governmental organisations, as well as efforts of local residents (including the use of private cars to evacuate the population, providing medical first aid and assistance to the disabled during a crisis, storing food).

Development of the civil defence system in Estonia. Currently, the Estonian Civil Defence Concept of 2018 reflects a comprehensive approach to security, in which both public services and the public share responsibility for the sustainability and functioning of the state. In addition, in 2024, in response to the ongoing Russian-Ukrainian war, the Estonian government approved a framework document on the country’s crisis preparedness and civil defence action plan for the next four years. It sets out goals including: 1) increasing the awareness and readiness of residents to deal with difficult situations; 2) developing an early warning system; 3) supporting the capacity of local governments; and 4) increasing the efficiency of public institutions and guaranteeing the continuity of their services.

At the national level, the Government Office and relevant ministries, particularly the Ministry of the Interior, are responsible for ensuring internal security, public order, civil protection and border security. At the local level, these functions are carried out by local governments. The Estonian Emergency Council, regional emergency centres, and other services supervised by local governments also play an important role. Thus, in emergency situations, the activity of institutions is based on the principles of decentralisation, subsidiarity, responsibility for particular tasks, and cooperation. Starting in 2021 – as a result of the COVID-19 pandemic – the Estonian Reserve Centre was also established.

Innovative civil defence. Estonia – one of the most digitised countries in the world – uses modern technology in its civil defence system. In particular, the innovative emergency notification system, introduced in 2023, is expected to improve the speed and accuracy of information as well as the clarity and comprehensibility of messages. Currently, information is automatically transmitted to all mobile devices located within a specific area, as well as to the editorial offices of ETV and ETV+ public television channels and Vikerraadio and Radio 4 radio channels. Indeed, data published in 2019 indicated that radio and television remained the most common source of emergency information (79% and 78%, respecitvely) (Kantar Emor). In addition, a so-called “pocket siren” project is expected to be launched soon, which will deliver threat messages to mobile devices even when the phone is switched to silent mode or the mobile operator’s network is not working.

On the website Ole valmis! (Be ready!), citizens can find essential information on how to behave in various situations – emergencies (theft, fire), natural disasters (storms, power and water outages), cyber attacks, and others. In addition, the mobile app of the same name, developed by the Women’s Voluntary Defence Organization in 2018, is available in three languages (Estonian, Russian and English) and also works offline. As of May 2024, the app also reports on potential threats from the air (aircraft, drones, helicopters, etc.).

Active citizen involvement. A comprehensive approach implies the active participation of citizens in ensuring the security of the country. The key, therefore, is public involvement, with volunteers  participating in civil defence according to their skills, abilities and knowledge. The Estonian system provides several ways to support state institutions and public services, including participation in the Defence League (a volunteer military organisation), volunteer police, and rescue services. Estonia also supports activities related to so-called passive resistance, which involves not only shaping the resilience of society when the cost of armed struggle is too high but also promoting patriotism. In this case, the Be Ready! app recommends: refusing to cooperate with the aggressor, ignoring regulations, participating in protests and demonstrations, distributing leaflets and posters, social media campaigns, disrupting transport and supply lines, sabotaging machinery and infrastructure elements, as well as civilian support of the armed forces (e.g. food supplies, medical supplies, accommodation).

Conclusions

1. The civil defence system in Estonia is part of a comprehensive model of security, in which the active role of society is to participate in the process of building the resilience of state institutions and developing its own capabilities and capacities to support these institutions. Thus, the system is designed to ensure the sustainability of the state in a crisis situation (functional aspect), as well as to promote patriotism and cultivate the values of Estonian culture (axiological aspect).

2. Estonia assesses threats from Russia as existential and long-term. While a military attack is currently unlikely, it depends on factors such as Russia’s successes on the Ukrainian front and NATO’s deterrence capabilities. Additionally Russia continues its hostile hybrid activities including migration pressure, disinformation in the media space, illegal tanker traffic in the Baltic Sea threatening the environment and civilian security (“IEŚ Commentaries”, no. 1042), and cyber attacks or GPS disruptions (“IEŚ Commentaries”, no. 1043). Moreover, Estonia points to the possibility of failures in telecommunications systems, power outages, and the spread of viral diseases that could contribute to crises.

3. Estonia is shaping its civil defence system along the lines of Finland, where legislation and the division of authority among institutions are more transparent, and the emergency information system and shelter infrastructure are much better developed than in Estonia. Finland, for example, provides shelters for about 85% of the population (in Helsinki the figure exceeds 130%), while in Estonia the coverage is approximately 5-7%[1]. The problem of the lack of shelters was also pointed out by the Ministry of the Interior in its Civil Protection Plan for 2022-2023[2].

4. Emergency services are among the best-rated public institutions in Estonia, trusted by 96% of the population, compared to 86% each for the police and border guards, and 76% for the Defence League (Eesti Uuringukeskus OÜ, 2023). This high level of trust reinforces the potential of civil defence and the ability to respond quickly to emergencies. For many years, the Estonian Emergency Council has been an active participant in the work of the Civil Protection Network (CBSS), which aims to build a common culture of social security in the Baltic Sea region, developing a common approach to threats, including prevention, preparedness and response, as well as coping with emergency situations.

5. Estonia is making efforts to strengthen awareness and share knowledge of how to manage emergencies. Reports from the Estonian Emergency Council (2017, 2019, 2021 and 2023) indicate that the situation in this regard is gradually improving, but the population’s crisis preparedness remains low (15% of the population rates their preparedness for an emergency situation well). The Ministry of the Interior’s goal is to increase this level to 40% over the next decade.

[1] J. Mägi, Elanikkonnakaitse võrdlus ohuteavituse ning varjumise korralduse aspektist. Eesti ja Soome riigi näitel, https://dspace.ut.ee/server/api/core/bitstreams/9335ecd9-b71f-494e-8672-94e9d147b8e9/conten; ERR, Estonian Rescue Board unveils nationwide public shelters online map, https://news.err.ee/1608862433/estonian-rescue-board-unveils-nationwide-public-shelters-online-map [23.07.2024].

[2] Elanikkonnakaitse plaan 2022–2023, https://www.rescue.ee/files/2022-04/2022.04.06-elanikkonnakaitse-plaan.pdf [23.07.2024].

Central European countries’ path to energy derussification: opportunities and challenges

Ukraine has restricted crude oil transit via the southern branch of the Druzhba pipeline

In June 2024, the Ukrainian authorities expanded their list of sanctioned entities to include Lukoil, which supplies crude oil to MOL Group refineries. This led to the suspension of crude oil supplies in mid-July 2024 to the Bratislava (Slovakia) and Százhalombatta (Hungary) plants. Both plants, thanks to the derogations they received in 2022 for sanctions imposed by the European Union, were still able to import crude oil from Russia. However, Kyiv’s unilateral decision to place Lukoil on its internal sanctions list has resulted in a reduction of crude oil transit through Ukraine. This situation is not, however, expected to adversely affect petroleum product availability in the region.

The specifics of crude oil supply to Slovakia and Hungary. In both countries, there are two refineries owned by the Hungarian company MOL, which import crude oil through the Druzhba pipeline (South Line). In Slovakia, the company operates under the name Slovnaft. The capacity of the Bratislava plant in Slovakia is 115,000 barrels per day, while the Százhalombatta plant in Hungary has a capacity of 160,000 barrels per day. These facilities have primarily used crude oil from the Russian Federation (Urals) for years.

Imports of crude oil from Russia account for about 90-100% of the processed crude oil in Slovakia. In Hungary, this figure is approximately 78%, with the remaining amount coming from Kazakhstan and Iraq (via supplies through Croatia). The Százhalombatta refinery, in addition to crude oil supplies from Russia, can also import crude oil via the Adria pipeline, which begins at the Omišalj terminal in Croatia. About 22% of the crude oil processed at the plant in 2023 was delivered via this route. As a result, the refinery in Hungary has two independent import channels (Russia and Croatia), with a preference for supply from Russia due to technological and infrastructure reasons. The Bratislava refinery is in a similar situation, also favouring crude oil supplies from Russia for logistical and infrastructural reasons. However, it can import crude oil from the south, via the same Omišalj oil terminal as Hungary, and then through the Adria and Šahy-Százhalombatta pipelines. The capacity of the Croatian terminal and pipelines is optimal for supplying crude oil to both the Százhalombatta and Bratislava refineries further inland.

Supplies to both refineries are based on commercial contracts with numerous crude oil trading companies in Russia. Sometimes, the plant has several independent contracts for importing crude oil from different exporters, with the crude oil supplied to the plant not varying, as the dominant grade traded in Russia is Urals. This is a crude oil from which a large amount of middle distillates (diesel and jet fuel) can be produced. To a lesser extent, light distillates such as gasoline are derived from this type of crude oil. The commodity purchased is a result of the emerging regional demand for fuels, where diesel is predominant. Consequently, although the Bratislava and Százhalombatta refineries are technologically capable of processing other types of crude oil, they prefer to purchase Russian oil to optimise the petroleum products produced.

Nature of sanctions against Russia. In the wake of the Russian Federation’s full-scale attack on Ukraine in 2022, numerous EU sanctions were imposed on Russia, including those targeting the crude oil and petroleum products sector. The purpose of these various packages was, among other things, to reduce Russian revenues from crude oil, petroleum products, and natural gas exports. The sanctions in place prevent the delivery of Russian crude oil and petroleum products by sea to refineries in European Union countries. As part of the sanctions process, Slovakia and Hungary, among others, received a derogation (until the end of 2024) from the sanctions imposed, allowing them to import crude oil from Russia via the Druzhba pipeline (southern line).

At the end of June 2024, the Kyiv government tightened the national sanctions list and extended it to include the Russian company Lukoil. Earlier restrictions were more general such as preventing the company from participating in the privatisation of Ukraine’s energy sector. Lukoil, under contracts with Slovnaft and MOL, supplies crude oil to the Bratislava and Százhalombatta refineries – a total of 80,000 barrels per day, or about 29% of the daily needs of both plants. According to the new sanctions, effective from 18 July 2024, UkrTransNafta is not allowed to transport crude oil owned by Lukoil but can still make deliveries for other exporters.

Political consequences. In response to the extension of Ukrainian sanctions, Hungarian Foreign Minister Péter Szijjártó announced that Hungary and Slovakia had begun consultations with the EU on halting crude oil transit through Ukraine. He stressed that Ukraine’s decision threatens the energy security of both countries and that Lukoil’s withholding of supplies poses a threat to regional stability. Additionally, he stated that ‘the Kyiv government’s decision is unacceptable and incomprehensible from a country aspiring to EU membership’. Szijjártó warned that Ukraine’s EU membership could face a veto from Slovakia and Hungary if the issue is not resolved. Prime Minister Robert Fico assured that temporary technical solutions have been applied in Slovakia, but pointed out that the real problem in the current situation is hostile action on the part of Ukraine, which is deliberately destabilising Slovakia and Hungary. The governments of R. Fico and V. Orbán have jointly asked the European Commission to initiate a consultation procedure, arguing that the Association Agreement between Ukraine and the European Union has been violated.

Slovak Prime Minister R. Fico immediately contacted his Ukrainian counterpart, Denys Shmyhal, in response to the sanctions announced by Ukraine. The communiqué issued after the conversation stated that Slovakia does not intend to ‘be held hostage to Ukrainian-Russian relations’. Meanwhile, the head of Hungarian diplomacy announced the veto of 6.5 billion EUR from the European Peace Facility (EPF). These funds are available to EU member states for arms transfers to Ukraine. Hungary has been blocking the disbursement of EPF funds for several months. Unanimity among all EU member states is required to vote on further financial tranches.

Trilateral relations. The policy of R. Fico’s government in Slovakia towards Ukraine is characterised by dualism – on the one hand, the authorities declare continued support for Ukraine through EU mechanisms, while on the other, they echo the narrative of their southern neighbour demanding peace (“IEŚ Commentaries”, no. 1087). Hungarian-Ukrainian relations, however, have long been shaped by the conflict over the rights of the Hungarian minority in Transcarpathia. Prime Minister V. Orbán has accused Ukraine of escalating the conflict, recruiting Transcarpathian Hungarians to the front, and deliberately sabotaging peace talks with Russia since the war began. This situation has not been altered by the Hungarian prime minister’s visit to Kyiv (“IEŚ Commentaries”, no. 1159). Additionally, tense relations were exacerbated by V. Orbán’s visit to Moscow and his meeting with Vladimir Putin as part of the ‘Hungarian peace mission’ (“IEŚ Commentaries”, no. 1160).

Conclusions

  • A shortage of Lukoil-owned crude oil supplies could have short-term negative consequences for facilities in Hungary and Slovakia. An ad hoc solution will be the use of crude oil from accumulated stocks – both countries are members of the EU and the International Energy Agency, so they are prepared for such difficulties. This situation could result in Lukoil’s place being taken by other crude oil suppliers trading Russian crude oil in the region.
  • The existing system of crude oil and petroleum products stocks ensures the availability of crude oil for refineries, and thus also the availability of petroleum products at stations. The current situation of limited crude oil supplies will not necessarily force a change in Slovakia’s and Hungary’s approach to cooperation with Russia. However, it is a clear signal that both countries should develop a process of energy diversification.
  • It should also be borne in mind that a reduction in production at refineries in Slovakia and Hungary could negatively impact fuel availability in Ukraine – both plants export manufactured products to that country as well (“IEŚ Commentaries”, no. 778). R. Fico has already announced that the Bratislava refinery will not supply diesel to Ukraine if supplies of Lukoil-sourced crude oil are not resumed.
  • Ukrainian sanctions against Lukoil, resulting in the suspension of crude oil supplies to Hungary and Slovakia, present an opportunity for R. Fico and V. Orbán to pursue a strategic rapprochement in Hungarian-Slovak relations. Undoubtedly, the situation will also be used in the propaganda machines of both countries to discredit Ukrainian efforts to join the EU and to put pressure on the EU to achieve specific foreign and domestic policy goals.

Poland, Slovakia, Hungary, and Romania under the excessive deficit procedure

After the pandemic-related loosening of fiscal rules – in the new framework following the reform – the EU’s excessive deficit procedure is returning. On 26 July 2024, the Council of the European Union decided to initiate it against seven member states, including three from Central Europe: Poland, Slovakia, and Hungary. This is the result of failing to meet the deficit criterion for the general government sector. At the same time, three other countries from this region also failed to meet it: the Czech Republic, Estonia, and Slovenia, but this was considered exceptional or temporary, and it was decided not to subject them to this procedure. In the case of Romania, which has been subject to this since 2020, a lack of effective action to reduce the deficit was found.

New fiscal framework. The need to change the architecture of public finances has been discussed in the European Union for years. However, this debate was interrupted by the COVID-19 pandemic. At that time, in the face of sudden, huge expenditures to mitigate the effects of the crisis (”IEŚ Commentaries”, No. 273), it was decided to temporarily suspend the existing fiscal rules. Over time, however, work on their reform was resumed (“IEŚ Commentaries”, No. 1076), with the main goal being to ensure the long-term financial stability of member states while avoiding slowing down economic growth and planned investments in strategic areas. Eventually, the reform came into force on 30 April 2024.

The reform did not change the basic fiscal rules – i.e., maintaining the threshold of 3% of GDP for the deficit and 60% of GDP for the debt of the general government sector. However, the ways of achieving and maintaining them below these thresholds were modified by introducing the obligation for member states to develop national medium-term fiscal-structural plans. These plans are to include – in line with the main goal of the reform – not only assumptions regarding maintaining public finance discipline but also planned structural reforms and investments supporting sustainable economic growth. In principle, the plans are to cover a period of four years, but there is a possibility to extend them to a maximum of seven years.

Some changes were also introduced in the excessive deficit procedure. The first step in the process of its potential opening is now the publication by the European Commission of a report covering member states that do not meet (or are at risk of not meeting) the indicated fiscal rules. The report includes an assessment in this regard, which – and worth emphasizing as a novelty – considers various “relevant factors” that could (or may) have an impact on the public finance situation of individual countries. Increasing public investment in defence was explicitly recognized as such a factor. The regulation on this procedure states: “Acknowledging the rising geopolitical tensions and security challenges, and the corresponding need for Member States to build-up their capabilities, the increase of government investment in defence, where applicable, should be considered as a relevant factor when assessing the existence of an excessive deficit”. This – which is also worth emphasizing – is particularly important from the point of view of Central European countries as for many of them, these investments have become a priority in the face of growing security threats.

The next step is the decision of the Council of the European Union regarding the opening of the excessive deficit procedure. Countries covered by it are obliged to take effective action to correct their deficit, considering the recommendations of EU institutions – the so-called reference trajectories for net expenditure, which should be reflected in national medium-term fiscal-structural plans. If a country does not take effective action, the Council may impose a fine (maximum 0.05% of GDP from the previous year for a period of six months, payable every six months until effective action is taken).

New countries covered by the excessive deficit procedure. The aforementioned report was published by the European Commission – for the first time after the reform – on June 19, 2024. Exceptionally, it only assessed the deficit criterion, as the new fiscal framework significantly changed the way the debt criterion is assessed. It is to be based on member states’ compliance with the indicated reference trajectories. These have not yet been defined, as member states are to submit their first national medium-term budgetary-structural plans only in autumn 2024.

The report thus included countries where the deficit in relation to GDP in the previous year or the deficit planned for the current year exceeded 3%. Among Central European countries in 2023, these were Hungary – 6.7%, Poland – 5.1%, Slovakia – 4.9%, Czech Republic – 3.7%, and Estonia – 3.4%. In the case of the last two countries, after taking into account “relevant factors”, these exceedances were considered temporary (in the Czech Republic, the deficit planned for the next year does not exceed the threshold) or exceptional (in Estonia, it was due to a significant economic slowdown). Slovenia’s planned exceedance of the deficit criterion in 2024 was also considered temporary (it was indicated that this is the result of reconstruction expenditures in the face of a natural disaster). However, with regard to the remaining three countries – Hungary, Poland, and Slovakia – the European Commission recommended initiating the excessive deficit procedure. It was also emphasized that these countries plan to exceed the deficit threshold in 2024 as well. Ultimately, by the decision of the Council of the European Union on 26 July 2024, this procedure was initiated against them (as well as Belgium, France, Italy, and Malta).

In the case of Romania, which was not included in the report due to being subject to this procedure since 2020, a lack of effective action in terms of deficit reduction was found. It was noted that this country recorded an exceedance of the threshold in relation to GDP in 2023 – 6.6%, and according to the plan, it will also be exceeded in 2024 – 4.9%.

Conclusions and perspectives.

  • The main goal of the excessive deficit procedure is to correct excessive indebtedness in EU member states and restore public finance stability. The new fiscal framework, while maintaining this goal, tries to find a balance between financial discipline and the need for structural reforms and necessary investments, which is particularly important for the catching-up economies of Central Europe. The introduction of national medium-term fiscal-structural plans may give countries subject to this procedure greater flexibility in conducting economic policy, primarily due to the possibility of spreading fiscal adjustments over a longer period. However, the inclusion of Hungary, Poland, and Slovakia in the excessive deficit procedure and its maintenance in the case of Romania may have significant consequences for their economic policies. These countries will be obliged to take into account EU reference trajectories, which will require a more restrictive fiscal policy including cuts in planned expenditures and/or tax increases. This, in turn, may affect the pace of economic growth and the competitiveness of these countries. In the case of Romania, this may be exacerbated by potential fines, which are an element of the excessive deficit procedure for member states that have not taken effective action to correct their fiscal policy.
  • Moreover, this procedure may affect the implementation of planned public investments in strategic areas in these countries. This is particularly important in the context of investment in defence in the face of the ongoing war in Ukraine. According to the reform assumptions, these investments were to be considered when assessing the existence of an excessive deficit. However, it is worth noting two significant limitations; firstly, only investments are taken into account, not total defence expenditures, and secondly, considering this data is difficult due to delayed reporting. Thus, in the Commission’s report, data on defence investments for 2022 was the basis for assessing deficits in 2023-2024. In relation to GDP, these investments amounted to 0.3% in Poland and Hungary and 0.2% in Slovakia. Only in the case of Poland were estimates for 2023 presented, according to which they were to increase to 0.7% of GDP. Consequently, the actual impact of these investments on the assessment of the fiscal situation may be less than assumed. Moreover, in the long term, the excessive deficit procedure may prompt these countries to revise their plans for modernizing the armed forces to some extent, which may have consequences for regional security.
  • At the same time, the fact that the Czech Republic, Estonia, and Slovenia avoided the excessive deficit procedure despite exceeding the 3% GDP threshold in 2023 or planning to exceed it in 2024 shows that EU institutions are willing to consider significant factors when deciding on implementing this procedure. However, it seems that this is only the case when the exceedance does not significantly deviate from the assumed threshold.

Estonia: priorities of the Kristen Michal’s government

On 23 July 2024, the government of Prime Minister Kristen Michal was sworn in at an extraordinary meeting of the Riigikogu after Kaja Kallas was nominated as EU High Representative for Foreign Affairs and Security Policy (“IEŚ Brief Commentaries”, no. 1167). Kristen Michal, Minister of Climate in Kaja Kallas’ government and previously Minister of Economy and Infrastructure as well as Minister of Justice, has moderate public support with 22%, slightly higher than Kaja Kallas’s 19%. The highest percentage of the population supports Defence Minister Hanno Pevkur at 35%, and the lowest support is for Finance Minister Mart Võrklaev at 9% (Kantar Emor, February 2024). The current cabinet, as before, is composed of the Reform Party (6 portfolios), the Social Democratic Party (4), and Estonia 200 (3).

In the area of security and defence policy, the Prime Minister pledges: to maintain the defence budget at 3.4% of GDP, to continue military aid to Ukraine at 0.25% of GDP until 2027, to develop the arms industry and increase munitions stocks, to develop Estonia’s navy and air defence, to strengthen the public’s resistance to disinformation, and to speed up the legislative process on civil defence and crisis management. In domestic policy, on the other hand, the focus will be on stimulating economic growth and reducing the deficit from a projected 5.6% of GDP this year to 3% of GDP in 2025 through: an increase in taxes by 2028; an increase in excise duties on alcohol, tobacco and petrol; budget cuts in the public sector and state-owned enterprises by 10% over three years; and reductions in ministerial posts.

Comment:

Based on Prime Minister Kristen Michal’s declarations, it is possible to indicate three main objectives of the new government: strengthening security and defence, reducing the deficit, and economic growth.

Firstly, due to the ongoing Russian-Ukrainian war and the hybrid threats provoked by Russia, the new government will continue the course of Kaja Kallas’ cabinet in the foreign and security policy sphere, based on close cooperation with allies and the development of its own military potential. The new Prime Minister made his first two official phone calls to Ukrainian President Volodymyr Zelensky and to Finnish Prime Minister Petteri Orpo. These foreign policy directions – Ukraine and Finland – have been among Estonia’s priorities for years. In his conversation with Volodymyr Zelensky, Prime Minister Michal confirmed the continuation of support for Ukraine and efforts to transfer funds from frozen Russian assets to Ukraine. For both Finland and the rest of the Baltic Sea region, Estonia pledges efforts to protect maritime critical infrastructure and energy security. Estonia will also continue its border infrastructure projects. Permanent defence installations and around 600 bunkers along the Estonian-Russian border are to be built as part of a Baltic defence zone, created jointly with Lithuania and Latvia, for both deterrence and, if necessary, defence against military threats. This idea was presented by the defence ministers of the three Baltic states at a meeting in Riga in January 2024 and aligns with the Polish government’s plans to strengthen the border with Belarus.

Secondly, in the face of a recession due to weak export prospects and falling investment, major changes will take place in economic policy. These include, above all, reducing debt and cutting the costs of state administration. Thirdly, the focus will be on increasing the competitiveness of the economy.

The update of domestic policy priorities is also evidenced by organisational changes. The Ministry of Economy and Information Technology will be restructured into the Ministry of Economy and Industry. In addition, a new Ministry of Infrastructure will be created, which is likely to focus on solving problems related to the Rail Baltica investment, whose estimated cost has increased several times over seven years. An audit report published this year indicated that an additional EUR 2.7 billion was needed to complete the Estonian section of Rail Baltica, although in 2017 the total cost of the investment was estimated at EUR 1.35 billion. Furthermore, a state audit indicated that the project remains at least five years behind the schedule approved in 2017.

The Ministry of Justice will be restructured into the Ministry of Justice and Digitalisation. This change is linked to a plan to reduce over-regulation and bureaucracy, develop e-services, and integrate the use of artificial intelligence. It also heralds the realisation of the concept of the personal state (“Personaalne riik”, or “Personal Government”), which aims to change the delivery of public services through more innovative, fast and proactive digital solutions, based on the needs, preferences, and capabilities of service users. By early 2025, both a legal framework to implement this concept and regulations to protect service users’ privacy are expected to be in place.

Romania: ambitious plans for natural gas exports

Romania, through the implementation of the Neptune Deep project, has the opportunity to become the largest producer of natural gas among the countries of the European Union. The development of the Domino and Pelican South fields could be an essential element in strengthening the energy security not only of Romania but also of Central European countries. The increased availability of natural gas in the region will require the expansion of transport capacity and the adaptation of existing natural gas pipelines to new market conditions.

Natural gas market and development projects. Romania is currently a net exporter of natural gas, with an annual production of 9.9 bcm (approximately 75% of production occurs onshore, with the remainder in coastal waters). Consumption, on the other hand, stands at 9.1 bcm per year, resulting in a portion of the produced natural gas already being diverted to markets in neighbouring countries. Romania has a long history in the oil and gas industry and serves as an important hub for international energy companies. In recent years, legal, fiscal, and organisational turmoil led to the withdrawal of US-based ExxonMobil from the Romanian market in 2019. Nevertheless, the sector still holds significant growth potential.

In a broader context, Romania ranks fifth in terms of natural gas reserves in Europe as well as natural gas production (after Norway, the UK, Ukraine, and the Netherlands), with a 4.3% share. However, considering only European Union member states, it ranks second, after the Netherlands, with a production share of 25%. Furthermore, it should be noted that with planned investments, particularly the implementation of the Neptune Deep project, Romania’s market position could improve significantly.

The decision to develop two deposits – Domino and Pelican South – located at the bottom of the Black Sea as part of the Neptune Deep project was made in June 2023. Work on this project has been carried out with varying intensity since 2008. Between 2008 and 2016, numerous activities were undertaken to estimate the deposits of the Neptune Deep concession block, value the project, and select a development concept for the deposits (“IEŚ Commentaries”, no. 412). The project plans to drill a total of 10 production wells and situate the Neptune production platform between the Domino and Pelican South fields. The produced natural gas will be directed to the platform for pre-cleaning and will then be transported onshore via a 160-kilometre pipeline. It is expected that the target completion of the development stage of the field (the stage up to so-called First Gas) will occur by 2027, after which commercial production of the resource will begin. The investment cost is estimated at 4 billion EUR, and the project is expected to increase Romania’s natural gas production by about 8 bcm per year for a period of 10 years. As a result, natural gas production is expected to almost double. In addition to the tangible benefits of developing the fields in the form of natural gas exports, the project is expected to generate 20 billion EUR in revenue for the state budget from various fees and taxes.

Existing and planned infrastructure investments. Romania already plays a significant role in ensuring the energy security of Central European countries, primarily Moldova (“IEŚ Commentaries”, no. 1124), and eventually Ukraine, among others. At the end of 2024, the Russian-Ukrainian agreement for the transportation of natural gas through Ukrainian territory will expire, which means that some countries in the region, particularly Austria and Hungary, will no longer be able to receive natural gas from Russia via Ukrainian pipelines. Such supplies will then only be possible from southern Europe, specifically through the TurkStream pipeline. In this changed international environment, the importance of Romania, which can supply natural gas from the south through the Trans-Balkan pipeline (with the possibility of supplies coming from Azerbaijan or regasification terminals in Greece) to Moldova and potentially other Central European countries, as well as to Ukraine, will increase. At the same time, some of Romania’s available natural gas is already being routed to Hungary via the BRUA pipeline. As part of the Neptune Deep project, it will be necessary to build the Tuzla-Podişor natural gas pipeline, which will connect offshore infrastructure to the national transmission network.

The development of the Domino and Pelican South fields will alter the energy landscape of Central European countries by increasing the availability of natural gas from outside Russia. Since the outbreak of the full-scale war in Ukraine in 2022, the Russian Federation’s influence in the region has declined and the Neptune Deep project could lead to the complete independence of Central European countries from Russian natural gas supplies. With the help of existing and planned investments, there will be a strengthening of natural gas exchange along the North-South axis, improving the energy security of countries in the region. Importantly, through existing solutions, Romania will be able to direct natural gas to Moldova, Bulgaria, and Hungary, and ultimately, through Hungary, to the markets of other EU member states.

Conclusions

  • With the implementation of the Neptune Deep project, Romania has the opportunity to become the largest producer of natural gas among European Union countries. The planned doubling of natural gas production will significantly strengthen Romania’s position in the region. This will enable Romania to act as a guarantor of energy security not only for Moldova, as is currently the case, but also for other Central European countries.
  • Enhancing energy security in the region will only be possible when the Neptune Deep project is fully realised. The companies involved in the investment (OMV Petrom and Romgaz) have experience in implementing such projects. However, in addition to the development of the deposits, an essential element for increasing the integration of the markets of Central European countries will be the expansion of transport capacity (potentially an additional 8 bcm of natural gas per year in the region) along the North-South axis.
  • The commercial exploitation of the Domino and Pelican South fields will have both positive and negative consequences for Romania’s climate situation. On the positive side, it may lead to a change in the energy balance (currently, natural gas ranks fourth, behind hydropower, nuclear power, and coal). Thus, the project may contribute to reducing the share of coal and meeting climate goals (although it is unclear how much of the planned 8 bcm per year of natural gas will be used in Romania and how much will be exported). On the negative side, it is anticipated that the investment could lead to a significant increase in greenhouse gas emissions (GHG), despite the introduction of Zero Routine Flaring and Zero Routine Venting principles in the exploitation of deposits[1].
  • The implementation of the investment may face challenges due to the ongoing war in Ukraine. Through the Neptune Deep project, Romania will become a strong regional player in the natural gas market in Central European countries, thus reducing the influence of the Russian Federation, which aims to destabilise the market. Given the past damage to transport infrastructure in Europe (mainly Nord Stream 1, Nord Stream 2, and the Balticconnector pipelines), a potential attack on the 160-kilometre-long pipeline delivering natural gas from the Domino and Pelican South fields to the mainland should be considered. Importantly, following the illegal annexation of the Crimean Peninsula by the Russian Federation in 2014, Romania’s exclusive economic zone in the Black Sea now borders Russia.

[1] Zero Routine Flaring and Zero Routine Venting are initiatives to reduce greenhouse gas emissions by eliminating routine flaring (flaring) and venting (venting) of gases associated with oil and gas production.

Hungary: energy cooperation with Caspian Sea countries

Russia in Hungary’s energy policy. For many years, Hungary’s energy policy has been directed toward close cooperation with the Russian Federation. Importantly, the outbreak of the war in Ukraine and the subsequent EU sanctions did not fundamentally lead to a reorientation of mutual political and economic relations. Crude oil supplies via the Druzhba pipeline, as well as natural gas imports from Russia, mean that Budapest’s level of energy dependence on Russia remains high at 70-80%. According to the Hungarian government, there is no possibility of rapid diversification of crude oil and natural gas supply sources and directions. However, in reality, Hungary does have the infrastructure to undertake such activities. In terms of crude oil imports, the Százhalombatta refinery can receive crude oil not only through the Druzhba pipeline, running from Russia through Belarus and Ukraine to Hungary, but also through the Adria pipeline, which runs from Croatia. The capacity of the crude oil terminal in the port of Omišalj, as well as the transportation capacity of the pipeline itself, is optimal for supplying crude oil to Hungary. This transport channel also enables the supply of crude oil to the Bratislava refinery, owned by the Hungarian company MOL. Significantly, no repair or modernization work is currently underway to potentially increase the capacity of the Adria pipeline, although MOL has previously indicated the need for such improvements as part of its diversification strategy for crude oil import sources. Hungary is also participating in the Sad-Algyő pipeline project, which aims to extend the existing Druzhba pipeline to allow crude oil supplies from Russia to Serbia (“IEŚ Commentaries” no. 807). In the context of natural gas supplies, Hungary has existing connections with neighbouring countries such as Croatia, Serbia, Romania, Austria, Czechia, and Slovakia. These connections provide opportunities to import natural gas from directions other than Russia. The expected termination of the Russian-Ukrainian natural gas agreement for the transit of this commodity through Ukrainian territory at the end of 2024 will not affect the volume of supplies from Russia to Hungary as the TurkStream pipeline is used for such operations (“IEŚ Commentaries”, no. 787).

In addition, Hungary’s heavy energy dependence on Russia and joint projects such as Paks 2 (the power plant being built by the Russian company Rosatom)[1] mean that Hungary has long opposed any sanctions on Russia that would jeopardize the availability of the country’s commodities in Central Europe. The Budapest government did, however, reluctantly agree to sanctions on Russia’s crude oil exports (with the Százhalombatta refinery receiving a sanction derogation until around 2025) as well as on liquefied natural gas (LNG). On 24 June  2024, another sanctions package was introduced, which restricted the transhipment of Russian natural gas destined for third countries (LNG re-export ban). Additionally, the EU banned financial, material, and technological support for both new and ongoing Russian LNG investment, while imposing import restrictions on LNG through EU terminals not connected to the natural gas system (“IEŚ Commentaries”, no. 1155). Without Hungary’s acquiescence, these, as well as previous sanctions, would not have eventually been implemented.

Alternative energy partners. Hungary has been cooperating with Azerbaijan for several years, and their mutual relationship spans two key areas; first, Hungarian energy companies are involved in the production of crude oil and natural gas in Azerbaijan. Second, Hungary purchases natural gas and receives supplies via the TANAP pipeline, which routes through Bulgaria and Serbia. In the first area, cooperation was initiated in 2019 when the Hungarian company MOL acquired a 9.57% stake in the Azeri-Chirag-Gunashli (ACG) crude oil field from US-based Chevron Global Ventures. This agreement with Chevron also included purchasing a stake in the Baku-Tbilisi-Ceyhan pipeline, which transports crude oil extracted from the ACG field. This was followed by a decision in June 2024 in which the Hungarian state-owned company MVM, responsible for electricity generation (including ownership of the Paks nuclear power plant), purchased a 5% stake in the Shah Deniz natural gas field. Concurrently, MVM agreed to buy a 4% stake in the Azerbaijan Gas Supply Company, which sells natural gas from the Shah Deniz field. In the second area, the authorities in Budapest are counting on increased natural gas supplies from Azerbaijan. However, as of 2024, the volume of supplies remains low, at around 50 mcm.

With regard to cooperation with Kazakhstan, it is worth noting that the presence of Hungarian companies in the country is minimal. Currently, MOL is primarily involved in the development of the Rozhkovskoye natural gas and gas condensate field, which has a maximum natural gas production capacity of 1 bcm per year. This project is managed by the international joint venture company Ural Oil and Gas LLP, comprising three entities: KazMunayGas of Kazakhstan (50%), MOL Group of Hungary (27.5%), and FIOC of China (22.5%). In addition to the Hungarian presence in the upstream sector, areas of Hungarian-Kazakh cooperation include crude oil trading, the supply of crude oil from Kazakhstan to the Százhalombatta refinery, and the potential export of gas condensate from the Rozhkovskoye field.

Conclusions

  • For many years, the Russian Federation has remained Hungary’s key energy partner, and the war in Ukraine has not significantly altered the direction of energy supplies. In the context of crude oil, Hungary does have an alternative, and the current situation remains financially and technologically favourable for the country. Shifting to alternative sources would require MOL to concentrate imports from Croatia, which could independently set transmission rates. This potential cost increase is one of the reasons the Budapest government prefers to maintain crude oil supplies from Russia.
  • In terms of natural gas supply, Hungary is gradually taking steps to diversify its sources and supply routes. In 2023, Hungary’s natural gas consumption was approximately 8.3 bcm. However, the 15-year agreement signed in 2021 between MVM and Gazprom, which ensures an annual supply of 4.5 bcm from Russia, is still in effect. Additionally, recent agreements for an additional 1-1.5 bcm per year mean that Russia continues to account for about 65% of Hungary’s natural gas supply.
  • Acquisition of a stake in the Azeri-Chirag-Gunashli field in Azerbaijan does not result in an increase in the volume of crude oil supplies to the Százhalombatta refinery. However, the situation may be different concerning the agreement to purchase a stake in the Shah Deniz field. It is expected that MVM’s 5% stake will enable the company to manage and potentially export about 1.5 bcm of natural gas per year, including to Hungary. This volume would account for approximately 18% of Hungary’s domestic needs. A few months ago, the Hungarian side expressed a desire to purchase about 1 bcm of natural gas per year from Azerbaijan, raising questions about whether increasing imports from this direction is still being considered alongside the purchase of shares in the Shah Deniz field.
  • The purchase of natural gas from Azerbaijan, along with small supplies from Turkey and Croatia, as well as domestic production, will undoubtedly play a crucial role in Hungary’s efforts to diversify its natural gas supply structure. Imports from non-Russian sources will enhance Hungary’s bargaining position in negotiations with Russia and reduce the risk of commodity shortages if supplies from Russia are disrupted.
  • Cooperation with Kazakhstan in the energy sector is primarily political and does not significantly diversify Hungary’s energy supply sources. Despite this, Hungary must seek other sources in the event of a potential cessation of crude oil supplies from Russia, whether due to the ongoing war or the end of the sanctions derogation period. Under these circumstances, cooperation with Kazakhstan offers only a theoretical alternative for Hungary, as the crude oil available on the international market from Kazakhstan partially originates from Russia (“IEŚ Commentaries”, no. 1000).

[1]See: D. Héjj, Rozbudowa elektrowni atomowej w Paks – znaczenie i perspektywy, „Prace IEŚ”, 2021, no. 4, https://ies.lublin.pl/prace/rozbudowa-elektrowni-atomowej-w-paks-znaczenie-i-perspektywy/.

The Sovereignty Protection Office in Hungary – a threat to media freedom?

The Hungarian government has been systematically taking steps to tighten control over the media and limit funding for opposition parties for over a dozen years. An example of such measures is the adoption of the Law on the Protection of National Sovereignty by the Hungarian National Assembly in December 2023. Under this act, a new state administration body, the Office for the Protection of Sovereignty (SZVH), was created, responsible for investigating and controlling public entities that benefit from foreign funding. The act also amended the Criminal Code, introducing a penalty of up to three years in prison for financing an election campaign with foreign funds. The law aims to limit financial support for independent media and opposition parties. In June 2024, SZVH launched an investigation against the independent investigative media outlet “Átlátszó” and Transparency International Hungary, prompting a wave of international criticism.

Tasks and competencies of the office. According to Article 1 of Law LXXXVIII on the Protection of National Sovereignty, the established Office for the Protection of Sovereignty (SZHV) is tasked with protecting Hungary’s sovereignty through a wide range of investigative duties, as defined in Section 3 of the law. These include: “investigating activities representing foreign interests (excluding diplomatic and professional organizations), identifying information manipulation and disinformation, and investigating efforts to influence democratic discourse and state decision-making, especially those carried out in the interests of foreign actors”[1]. Article 2 of the law establishing the SZHV specifies the competencies of the body, which include “developing and applying methodologies for assessing sovereignty risks, analyzing national sovereignty using data from various sources, and making recommendations aimed at protecting Hungary’s sovereignty”[2]. In addition, the law indicates in Article 2 that the SZHV proposes and reviews relevant legislation, compiles an annual report on sovereignty, and funds research to improve conditions that support national sovereignty.

Article 3 of the law outlines the competence of the SZHV to investigate activities that threaten Hungary’s sovereignty, i.e., representing foreign interests influencing domestic discourse that affects the electoral decisions of Hungarians[3]. Articles 7 and 8 address the problem of investigative procedures, including interventions, proceedings and legal consequences if irregularities are found. The law does not identify an appeals institution responsible for resolving cases of abuse of powers by the SZHV, which has raised concerns and questions from citizens regarding the constitutionality of the new office.

Criticism of the law. More than 100 Hungarian NGOs have signed a petition to the government to withdraw the law. The protest was held jointly with Hungarian opposition parties and international watchdog organizations. Nearly 20,000 citizens spoke in favor of abolishing the office, accusing it of lacking transparency. Even during its drafting stage, the law was strongly opposed by the public and condemned by the Council of Europe and the U.S. Embassy in Hungary, which openly described it as “a step backwards for Hungarian democracy.” Hungarian specialists in comparative law have been vocal about the similarity of the Hungarian Sovereignty Protection Act to Russia’s act on so-called “foreign agents.” In February 2024, the European Commission opened proceedings against Hungary for violating EU law in connection with the introduction of the aforementioned law.

Controversy around SZVH. Tamás Lánczi, a former speechwriter for Prime Minister Viktor Orbán, has been named head of Hungary’s newly established Sovereignty Protection Office. In the past, T. Lánczi has been a political analyst sympathetic to the Fidesz-KDNP government and the Hungarian right. He has been open about his support for the controversial political reforms introduced by the government of V. Orbán since 2010, and his analyses deviated from accepted academic standards of objectivity. After the 2018 parliamentary elections  Lánczi, as editor-in-chief of the weekly Figyelő – a magazine that became a propaganda tool in the hands of V. Orbán’s government – oversaw the publication of the infamous “list of 200 Soros mercenaries.” The article attacked social activists, anti-government activists, investigative journalists, academics, political critics, opposition figures – ­ anyone whose critical approach to the government broke through to public opinion.

According to experts from the Hungarian Helsinki Committee and Amnesty International, the law targets the activities of independent NGOs, opposition parties, and the mass media in Hungary. Reports point to a direct threat to media freedom, and “investigating foreign interference in the Hungarian media market”[4] is considered a violation of EU law. Analysts are of the opinion that the new office will not contribute to increasing protection against disinformation activities by Russia, Belarus, and China but will make it more difficult to keep independent media, opposition parties, and NGOs afloat. A direct example of this is the case initiated by the SZHV in June 2024 against two independent entities in Hungary – ­Transparency International and the investigative daily Átlátszó. The Office for the Protection of Sovereignty, headed by T. Lánczi, launched an investigation into “the use of foreign donations aimed at influencing the electorate’s electoral decisions,”[5] which sparked public outrage. It should be noted that no such action was taken against VoiceofEurope, an Internet portal broken up by Czech and Polish services, which was linked to Russian intelligence[6].

An SZHV report from May 2024 pointed out that “a group of political advisors from Western Europe, in addition to funding the Hungarian opposition, is lobbying for an escalation of the Russian-Ukrainian war, including in the U.S. […] it is the big donors who are looking for followers to achieve their own goals […] and the main one is George Soros, which is why the protection of Hungary’s sovereignty needs to be strengthened.”[7] Many Hungarian journalists fear further attacks on the independent media and a hate campaign targeting key figures in Hungarian civil society. Opposition politicians warn that the law is modeled on Russia’s law on so-called “foreign agents.” Both the Hungarian and Russian laws involve politically motivated actions to identify alleged foreign agents and actors posing a threat to the political system, as well as the creation of ideological enemies by nominally independent state agencies, to the political benefit of both governments. It is worth noting, however, that the Hungarian law, unlike the Russian one, does not include a list of enemy actors.

The law’s impact on independent media. An emerging problem in both this law and more broadly in Hungarian legislation is the lack of a clear definition of “information manipulation,” “disinformation activities,” or “fake news.” Consequently, this loophole creates the potential for abuse. The law also repeatedly includes the concept of “democratic discourse,” which the SZVH directly invoked in its infringement proceedings against Transparency International and Átlátszó. The lack of precision in the law and the wide range of interpretations of definitions such as “sovereignty” open the way for proceedings against analytical think tanks – e.g., Policy Solutions or Political Capital – which, due to the topics of analysis they undertake (rule of law, political corruption, illiberalism), are problematic for the Hungarian government.

The four largest independent portals and dailies operating in Hungary (Telex.hu, 444.hu, hvg.hu, and 24.hu) remain under close surveillance by state services. For several years, the state administration has been restricting access to public information and manipulating data (as in the case of the number of COVID-19 infections or refugees). Unannounced tax audits and inspections of administrative documents are carried out at the headquarters of independent media without any indication of a violation. In 2021, the phones of investigative journalists from the Direkt36 portal were infected with the Pegasus system. Investigative journalists in Hungary (Direkt36, 444.hu, hvg360.hu) face various forms of intimidation from the state apparatus, and court cases explaining, for example, the illegal use of Pegasus are obstructed by the government-controlled judiciary. The most effective method of pressure from the state apparatus is media campaigns denigrating specific individuals, carried out by public media subordinate to the government. For example, opposition politician Péter Juhás was unfoundedly accused of violence against his partner, and as a result of a prolonged media campaign, he withdrew from political life. Journalists and social activists are also victims of such campaigns based on lies.

Conclusions

Viktor Orbán has been successfully consolidating power over the country’s media since 2010 through a semi-oligarchic structure close to Fidesz, called the National Cooperation System (NER)[8]. This process has been ongoing for years and has been carried out through coordinated government action. Administrative and fiscal pressure is being exerted on foreign-backed entities. The Office for the Protection of Sovereignty is a new instrument for intimidating independent organizations and individuals critical of the government.

Heavy government interference in the activities of parts of the media in Hungary is leading to social polarization and the erosion of media pluralism. The National Media Supervisory Board is staffed with Fidesz party appointees who dominate the board structure, allowing them to arbitrarily decide which TV or radio station will be granted a broadcasting license. A decision to refuse and not grant a license entails the withdrawal of the entity from the public space. This was the case with Klubrádió radio, which is critical of government policy and whose license was not renewed.

The SZVH aims to discourage foreign entities from investing in opposition organizations in Hungary, which is indirectly perceived as an attack on their liquidity. In addition, the SZVH declares to protect the national interest, which in Hungarian reality equates to protecting the interest of the Fidesz party. This represents a new tool in the hands of the ruling coalition to limit the ability of opposition parties to campaign in future parliamentary elections in Hungary. The goal remains to maintain Fidesz’s status as the dominant party.

[1] 2023. évi LXXXVIII. törvény a nemzeti szuverenitás védelméről, Nemzeti Jogszabálytár [27.06.2024].

[2] A Szuverenitásvédelmi Hivatal feladatai, 2023. évi LXXXVIII. törvény a nemzeti szuverenitás védelmérő [27.06.2024].

[3] A Szuverenitásvédelmi Hivatal vizsgálati eljárása, 2023. évi LXXXVIII. törvény a nemzeti szuverenitás védelmérő [27.06.2024].

[4] Lánczi Tamás elismerte, hogy a médiával is foglalkozik a Szuverenitásvédelmi Hivatal, 23.01.2024, https://media1.hu/2024/01/23/lanczi-tamas-elismerte-hogy-a-mediaval-is-foglalkozik-a-szuverenitasvedelmi-hivatal/ [16.06.2024].

[5] See the letter sent by SZVH to Transparency International Hungary, https://transparency.hu/wp-content/uploads/2024/06/TI_Hu_szuverenitasvedelmi_hivatal_level_240618.pdf [28.06.2024].

[6] See hvg.hu’s investigation into the matter, https://hvg.hu/360/20240331_megtudtuk-kit-talalt-meg-magyarorszagon-a-kemelharitas-az-orosz-befolyasolasi-halozat-felderitesekor [19.06.2024].

[7] See the full SZVH report, https://auth.scribd.com/u/signup?state=hKFo2SAyYTFUb01NZXZBNGRKb1h0WUxYN0JNa0ZqRWtOdjc5SqFur3VuaXZlcnNhbC1sb2dpbqN0aWTZIF9NQnR3OHFMeUV4M3BwVmlPUHU4OWpSbW1SM1prWUxno2NpZNkgZ3ljN3lyZnpzdkpmaXd5bHNlYXU4Y3g5dVZhb2FOU1A&ui_locales=en [16.06.2024].

[8] In 2010, after winning the elections, Prime Minister V. Orbán announced the creation of the National System of Cooperation (NER) to symbolize a new social contract. The adoption of the Declaration of National Cooperation created an oligarchic system of business dependencies between the Fidesz party’s most trusted people. This directly translated into the NER’s gradual takeover of key branches of state functioning, such as the media and civil engineering, for example.

Hungarian Prime Minister Viktor Orbán’s official visit to Russia

On 5 July 2024 Hungarian Prime Minister Viktor Orbán and representatives of the Hungarian government made an official visit to Russia, where they met with Russian President Vladimir Putin. During the official part of the meeting, they discussed both Hungarian-Russian bilateral relations and the international situation. V. Orbán, although not delegated to represent the entire European Union, used Hungary’s role as a country that holds a 6-month presidency in the Council of the European Union to “take real steps toward peace”. It is important to highlight that the visit to Moscow came just days after V. Orbán had been to the capital of Ukraine, Kyiv.

Organization and course of the meeting. The decision to visit Moscow was made while V. Orbán was still in Kyiv. Even then, the Prime Minister had the meeting organized by Foreign Minister Péter Szijjártó[1], who held a telephone conversation with his Russian counterpart, Sergey Lavrov. The Hungarian side was keen to keep the visit secret, so the message about the conversation, which appeared immediately afterward on the Russian Foreign Ministry website, was quickly removed (presumably at Hungary’s request), only to reappear a day later. The public part of the meeting in Moscow was held in the form of a consultation between V. Orbán and V. Putin and representatives of their governments (the whole event was available to the public by online broadcast). During the meeting, the good bilateral relations and Hungary’s contradicting position (compared to other Western countries) on the war in Ukraine, were repeatedly emphasized. The Hungarian prime minister stated that “Hungary is one of the few countries that can hold talks with both sides of the conflict,” with which he made a direct reference to his visit to Kyiv a few days earlier (“IEŚ Commentaries,” no. 1159). Kremlin spokesman Dmitry Peskov assured via Rossiya 24 TV that “the visit took place on Hungary’s initiative,” an implication of V. Orbán: “Peace will not come by itself, that is why it is necessary to take real actions. During the Hungarian presidency of the EU we will take the first steps toward peace”[2]. The official talks focused on the peace plan for Ukraine, the terms of the ceasefire, and the economic situation. V. Putin stressed that he “expects Hungary to present its position on Hungarian-Russian issues as well as the positions of the European partners he (V. Orbán ­ author’s note) represents”[3], suggesting that he treats the Hungarian prime minister as an EU envoy. As V. Putin stated, “I understand that you came here not only as a partner but as a representative of the EU presidency”[4]. Although V. Orbán maintains that he did not represent the position of the EU[5], direct references to the fact that Hungary holds the presidency in the Council of the EU created just such an impression.

Context of the visit. The meeting between representatives of the governments of Hungary and Russia took place in the context of Hungary’s presidency of the Council of the EU, which began on 1 July 2024 (“IEŚ Commentaries,” no. 1154). For months, the Hungarian prime minister has stressed the lack of real EU action to achieve peace. At the same time, he addressed V. Putin at the meeting: “Hungary is grateful that even under these conditions (i.e., the war in Ukraine and the sanctions of the West – author’s own note) you were willing to host me, and I must say that there are only a few countries that are able to talk to both sides (of the war in Ukraine – author’s own note], Hungary is unfortunately in the minority”[6]. During the visit to Moscow, accompanying V. Orbán, P. Szijjártó appealed to the NATO partners: “the last two and a half years have shown that the war in our neighbourhood is unsolvable on the battlefield. A ceasefire and peace talks are needed as soon as possible to end the suffering of the people. We hope that today’s meeting in Moscow can bring peace closer”[7]. It should be recalled that a little over a month earlier, during his visit to Minsk, P. Szijjártó undermined NATO’s unity, accusing partners of “war hysteria” and “striving for another war” (“IEŚ Commentaries,” no. 1138).

The news of V. Orbán’s visit to Moscow was kept secret not only from the media but also from his European partners and stirred up a lot of controversy. Information on the subject appeared in the media a day before the scheduled departure for Moscow and forced a reaction from senior EU representatives. Charles Michel assured that the rotating EU presidency has no mandate to hold talks with Russia on behalf of the EU, and moreover, no discussion of Ukraine will take place behind its back[8]. The EU High Representative for Foreign and Security Policy (HR), Josep Borrell, also issued a similar statement[9]. Among others, Estonian Prime Minister Kaja Kallas, the incoming HR, and other EU prime ministers expressed their critical positions. All condemned Russian aggression and reaffirmed the EU’s unity with Ukraine. Only Slovak Prime Minister Robert Fico took the opposite view, expressing approval for a Hungarian “peace mission” to Moscow.

Determinants of Hungarian policy toward Russia. Due to its geographic location in the Pannonian Basin, its short border with Ukraine, and its considerable distance from the front line, Hungary does not feel the threat of a military attack from Russia. Moreover, they are energy-dependent on fossil fuel supplies from Russia. Energy imports directly condition Hungary’s policy toward EU sanctions against Russia. The government of V. Orbán led the effort to take Hungary out of the ban on imports of Russian energy resources, arguing that as a landlocked country, it has difficulty diversifying. At the same time, he has not curtailed energy ties with Russia, but on the contrary, Hungary supports infrastructure projects to facilitate the export of Russian oil to Serbia (“IEŚ Commentaries,” no. 807) and the construction of a second reactor at Paks by Rosatom. This strategy guarantees low energy prices for Hungarians, which directly translates into voters’ support for the Fidesz party. State giant company MOL, which, among other things, processes Russian oil, generates profits that help balance the state budget. Bank OTP[10], which earns part of its income through its presence in the Russian market, also remains a strategic player. OTP Bank was on Ukraine’s list of “war-sponsoring” companies, which was one of the reasons for strained Hungarian-Ukrainian relations. Another determinant is V. Orbán’s use of Ukraine’s difficult position in negotiations with its representatives, especially in the context of minority rights. The Russian factor thus becomes a potential bargaining chip. Moreover, the policy of V. Orbán is based on the assumption that Russia cannot be defeated, so dialogue must be worked out[11]. Hungary’s foreign policy is also characterized by a general conflict reluctance with regional powers and building a multi-vector policy. Russian-Hungarian relations are also affected by V. Orbán’s policy based on building broad ties with conservative and illiberal politicians. He articulated his belief in the failure of liberalism most clearly in a speech in Romania’s Băile Tuşnad in 2014[12], and his open relations with the regime in Russia are part of a broader trend of building an international anti-liberal coalition.

Conclusions

  • Two consecutive visits to Kyiv and Moscow create a false symmetry in the international perception of Ukraine and Russia. V. Orbán is creating, consciously or not, an opportunity for the Russian side to dilute responsibility for the war, and the Hungarian prime minister’s actions are being used for Russian propaganda to deny Russia’s diplomatic isolation.
  • The Hungarian government is pushing a “peace mission” and, exceeding its powers of the rotating presidency of the Council of the European Union, is bringing state foreign policy priorities to the EU level. As part of the “peace mission,” the government of V. Orbán has also met with the Chinese president and is meeting with NATO heads of state at a summit in Washington, and it is possible that in the coming weeks, it will also hold a meeting with Donald Trump, who, according to V. Orbán is the only guarantor of peace.
  • From the perspective of V. Orbán, failure to consult the Moscow visit with the EU and calling V. Putin a “friend” are aimed at testing how far Hungary’s NATO and EU allies’ tolerance goes. This strategy is repeated every time V. Orbán wants to achieve an ad hoc political goal. The Hungarian prime minister is aware that repercussions are unlikely to await him from Western countries, so he will continue his multi-vector policy under the banner of a “peace mission” aimed at gaining advantages in bilateral relations with partners such as Russia and China and building domestic support in Hungary.

[1] Orbán in Moskau: Das erste Interview nach dem Putin-Gipfel, https://www.youtube.com/watch?app=deskt%20op&v=3-KbKJfPM1I [7.07.2024].

[2] Orbán Viktor a Kossuth Rádióban (2024. július 5.), https://www.youtube.com/watch?v=OW2aCkk99Xs [5.07.2024].

[3] Putin Meets Orbán in Kremlin to discuss the Ukraine situation, https://www.youtube.com/watch?v=VGtN_jhOw5M [5.07.2024].

[4] Ibid.

[5] Post with interview of V. Orbán, https://twitter.com/PM_ViktorOrban/status/1809116147926614478  [7.07.2024].

[6] Putin Meets Orbán in Kremlin to discuss the Ukraine situation, https://www.youtube.com/watch?v=VGtN_jhOw5M [5.07.2024].

[7] P. Szijjártó’s social media, https://www.facebook.com/share/p/ZpgvA7CEZZcGGvAg/ [5.07.2024].

[8] Charles Michel’s social media, https://x.com/CharlesMichel/status/1808901878140330222 [5.07.2024].

[9] Russia: Statement by High Representative on the visit of Prime Minister Orbán to Moscow, https://www.eeas.europa.eu/eeas/russia-statement-high-representative-visit-prime-minister-orb%C3%A1n-moscow_en?channel=eeas_press_alerts&date=2024-07-05&newsid=0&langid=en&source=mail [6.07.2024].

[10] Hungary’s Gedeon Richter also operates in the Russian market but is less susceptible to Russian blackmail due to the non-alternative nature of its products.

[11] Tucker Carlson interview with V. Orbán, https://www.youtube.com/watch?v=FAAHY-Ftc-8 [8.07.2024].

[12] See V. Orbán’s speech: https://2015-2019.kormany.hu/en/the-prime-minister/the-prime-minister-s-speeches/prime-minister-viktor-orban-s-speech-at-the-25th-balvanyos-summer-free-university-and-student-camp [8.07.2024].

Hungarian Prime Minister’s first visit to Kyiv since the outbreak of war

On 2 July 2024, Hungarian Prime Minister Viktor Orbán paid an official visit to Kyiv for the first time in 12 years. It was also the first time since the outbreak of the full-scale war with Russia, where high-level government talks were held. The visit also included a meeting between V. Orbán and Ukrainian President Volodymyr Zelensky. They primarily discussed the issues of potential peace talks with Russia, the Hungarian national minority in the Transcarpathian region, and cooperation at the European Union (EU) level, which is directly related to Hungary’s presidency of the Council of the EU, which began on 1 July  2024.

Hungarian visits to Ukraine after the outbreak of full-scale war. Unlike their counterparts from other EU and North Atlantic Alliance (NATO) countries, Hungarian representatives diplomatically isolated Ukraine while maintaining relations with Belarus or Russia. There were a few episodes that were exceptions; in August 2023, then-Hungarian President Katalin Novák paid tribute in Bucha and took part in the Crimean Platform, during which she stressed that “the territorial integrity of Ukraine is indisputable,” and Hungary expressed its solidarity through humanitarian aid and participation in Ukrainian grain exports. In January 2024, Hungarian Foreign Minister Péter Szijjártó met in the city of Uzhhorod with his counterpart Dmytro Kuleba and the head of the Ukrainian President’s Chancellery Andriy Yermak. During the talks, the Hungarian side stressed the importance of the still unresolved issue of the rights of the Hungarian minority in Ukraine while noting the progress in this area, which has brought Ukraine closer to pre-accession negotiations with the EU. Prime Minister V. Orbán has met with V. Zelensky only on the occasion of joint events at the EU or UN since the start of the full-scale war in Ukraine. On 1 July  2024, Hungary began its six-month presidency of the Council of the EU, and in its program, declared the continuation of the EU’’s adopted policy towards Ukraine (“IEŚ Commentaries” no. 1154).

Course of the meeting. The bilateral conversation between the Hungarian PM and the Ukrainian president took place behind closed doors, and the entire visit was kept secret from the media. The departure of V. Orbán to Kyiv was only announced a day before the scheduled visit. According to Ukrainian sources, the main topic of the talks was the issue of reaching a ceasefire and creating a peace plan acceptable to both Ukraine and Russia. However, it is difficult to resolve whether this was not wishful thinking on the Ukrainian side. Prime Minister V. Orbán had already made it clear after the meeting that he had urged President V. Zelensky to reverse the steps of the peace plan so that a ceasefire would be established first and peace talks would follow. At the joint meeting of representatives of the two governments, energy issues and food security in the region were discussed, and the topic of the Hungarian minority, which has negatively affected Hungarian-Ukrainian relations for years, was raised. The series of meetings concluded with a ten-minute press conference in which V. Orbán favourably assessed the Ukrainian president’s “efforts for peace,”[1] contradicting the Hungarian government’s previous narrative that blamed both Ukraine and NATO for escalating the war and introducing a “war hysteria” (“IEŚ Commentaries” no. 1138). The Ukrainian president thanked V. Orbán for signing off on the June summit conclusions for peace in Ukraine and stressed the importance of “fundamental issues for both countries that can form the basis of an international agreement, especially the situation of the Hungarian minority and the opening of a Ukrainian school in Hungary.”

As the Russian Foreign Ministry reported the same day, “on the initiative of the Hungarian side,” a telephone conversation was held between P. Szijjártó and his Russian counterpart Sergey Lavrov regarding “the Ukrainian crisis (…) and ensuring the rights of all national minorities living in Ukraine.”[2] It is interesting to note that the conversation was not reported by the Hungarian Foreign Ministry, and the information posted on the Russian Foreign Ministry’s website was quickly removed. It is possible, therefore, that the conversation may have been of a technical nature and concerned the planned visit of representatives of the Hungarian government to Moscow and that the Russian side intentionally created the impression that the talks with Ukraine were being consulted at the Russian-Hungarian level.

Hungarian minority in Ukraine. One of the main factors responsible for the dynamics of Hungary’s relations with its neighbours is the more than two million-strong Hungarian minority in neighbouring countries. Its presence is a result of the unfavourable settlements of World War I and the Treaty of Trianon from Hungary’s perspective. The Hungarian minority in Ukraine is relatively less numerous than that living in, for example, Romania (according to the 2001 census, about 150,000 ethnic Hungarians lived in Ukraine), but remains geographically concentrated in the Transcarpathian region. From Hungary’s perspective, however, it is important not because of its numbers. Hungary’s foreign policy is guided by the assumption that it cannot allow any manifestation of discrimination against the Hungarian minority in any of its neighbouring countries, as this could risk demands for concessions or similar practices (e.g., less liberal policies toward minorities) from other neighbours. A major issue in Hungarian-Ukrainian relations has been the restriction of access to Hungarian-language education for second-level elementary school students in Ukraine.[3] The Hungarian state, circumventing Ukrainian law, has begun subsidizing private Hungarian schools in the Transcarpathian region from the state budget. In late 2023, Ukraine made significant changes to the law on minorities, which liberalized these issues for students receiving education in one of the official languages of the EU. This was due to conditions imposed on Ukraine by the European Commission. These changes led, among other things, to the establishment of a negotiating framework by the Council of the European Union (with Hungary’s consent) and the initiation of EU accession negotiations with Ukraine. From Hungary’s perspective, legal changes regarding the rights of national minorities in Ukraine were a prerequisite for developing relations with Ukraine at the highest level.

It should also be remembered that national minorities are not only a serious demographic resource in Hungarian politics but also a tool for influencing neighbouring countries. The country currently has about 9.6 million citizens with a downward trend. The process of integration of immigrants is difficult, and the ideal solution to increase the population is to reach out to “Hungarian” citizens from neighbouring countries. Moreover, during the second government of V. Orbán in 2010, there was a policy of granting Hungarian passports to ethnic Hungarians in neighbouring countries. This also contributed to building an electoral base for Fidesz. During the last parliamentary elections in 2022, 94% of citizens “from outside the country’s borders whose address is not in Hungary” voted for Fidesz.[4]

Ceasefire. At a conference after the meeting, V. Orbán announced that “the rules of international diplomacy are slow and complicated.” Accordingly, he asked the Ukrainian president to consider “reversing the order of the process and speeding up peace negotiations through a quick ceasefire within a certain timeframe that will give peace negotiations a chance.”[5] V. Orbán addressed the Ukrainian people, saying: “peace is a very important issue. The war you are living in has a very intense impact on the security of Europe.” He also stressed his gratitude for V. Zelensky’s sincere response on the issue. It is not clear from the published reports what the Ukrainian president’s response was or what position he presented on the ceasefire, but according to the Ukrainian government’s position, in the current situation, a ceasefire would only give Russia time to strengthen its defences in the occupied territories and expand its offensive potential. Hungary, however, is pursuing a different policy toward aid than its NATO partners, not transferring armaments and limiting itself to humanitarian support, training Ukrainian battlefield medics on its territory, and selling diesel fuel to Ukraine.

Conclusions

  • Two important factors influenced the organization of the visit. First – the liberalization of the rights of national minorities, including the Hungarian minority in Ukraine, and second – the dual role of V. Orbán, who is now also the leader of the country holding the EU Council presidency. The visit to Kyiv on the second day after assuming the presidency is intended to showcase V. Orbán as a causal politician. In this way, the prime minister wants to rebuild Hungary’s image and prove that the government not only talks about peace but also takes concrete initiatives to achieve it. However, the formula of “reversing the order” of the peace plan is unacceptable to the Ukrainian side as long as the defensive lines are not broken by Russia and as long as the West is interested in supporting Ukraine militarily. In the long term, V. Orbán’s actions are dangerous for Ukraine – it only strengthens Russia, whose military and political goals have not been realized.
  • The visit to Kyiv is a signal that the government of V. Orbán is ready to adopt a pragmatic stance toward Ukraine if the conditions set by Prime Minister Orbán are met, as was the case with Sweden’s accession to NATO (“IEŚ Commentaries” no. 1073). Hungary’s policy remains multi-vectorial and aimed at immediate benefits, as exemplified by the consultations between the Russian and Hungarian foreign ministers on the day of V. Orbán’s visit to Kyiv.
  • In the context of the visit, it is worth mentioning that the Russian-Ukrainian contract for the transit of Russian gas through Ukraine ends in 2024. Hungary is interested in continuing to receive/purchase Russian gas despite political promises to diversify supply sources. The US elections will also take place in the fall, with the Hungarian government strongly supporting Donald Trump, believing that the Republicans will bring about a change in Western policy toward the war and “bring peace to Ukraine” (“IEŚ Commentaries” no. 1081). They will be an important caesura for Hungary’s foreign policy.

[1] Kijev. Sajtótájékoztató Volodimir Zelenszkij ukrán elnökkel, https://www.youtube.com/watch?v=xlJX1RrKh8c [3.07.2024].

[2] Statement after telephone consultation, https://mid.ru/ru/foreign_policy/news/1960565/ [3.07.2024].

[3] The education law introduced in 2017, which included these reforms, did not target only the Hungarian minority, but was concerned with strengthening the Ukrainian language and weakening access to teaching in the languages of other minorities as well, due to objective conditions – ­ mainly Russian-speaking.

[4] Országgyűlési képviselők választása 2022, Levélszavazás, https://vtr.valasztas.hu/ogy2022/valasztasi-informaciok/levelszavazas?tab=results [4.07.2024].

[5] Kijev. Sajtótájékoztató Volodimir Zelenszkij ukrán elnökkel, https://www.youtube.com/watch?v=xlJX1RrKh8c [3.07.2024].