Hungary bows to Russian gas demands as EU looks to cut funding
Hungary says it was ready to pay in roubles for Russia’s gas, defying the rest of the European Union, which has refused Moscow’s demand.
Hungarian Prime Minister Viktor Orban told the media Budapest is ready to pay for gas in roubles if Russia asks. Vladimir Putin has threatened to turn off the gas taps to the EU after being hit with western sanctions after his invasion of Ukraine.
The EU relies on Russia for more than a third of its gas. Slovakia, Poland and Austria all said they would observe existing gas contracts with Russian suppliers.
Hungary is heavily reliant on Russian gas and oil. Orban’s populist government signed a new long-term gas supply deal last year under which Russia’s state-run gas exporter Gazprom is expected to import 4.5 billion cubic metres of gas annually.
Hungary’s announcement comes amid rising tension with Brussels.
The European Commission says a disciplinary procedure against Hungary could lead to the freezing of European funding in response to the erosion of democratic norms in Hungary.
On Sunday Orban was re-elected with an overwhelming majority after years of criticism from the European Commission of Hungary’s public procurements, conflicts of interest, anti-migrant policies, limits to judicial independence and restrictions on media freedom.
The EU’s executive branch said on Tuesday its new rule-of-law mechanism – which has never been used before – could be used to prevent the misuse of European funds.
“We’ve been very clear the issue is corruption,” commission president Ursula von der Leyen told the European Parliament. “We will now send a letter of formal notification to start the conditionality mechanism.”
The mechanism will allow the EU to withhold funding from member states that defy the 27-member bloc’s fundamental rules. The mechanism was agreed in late 2020, despite reluctance from Hungary and Poland.
Some wealthier member states are keen that budgets are not squandered on corruption.
Gergely Gulyas, Orban’s chief of staff, called on the commission “not to punish Hungarian voters for expressing an opinion not to Brussels’ taste”.
Populist-run Hungary and Poland, which both receive large quantities of EU funds, unsuccessfully challenged the new procedure at the European Court of Justice in February.
For the mechanism to be enacted, 15 member states – representing 65 per cent of the EU population – must agree to penalise another member. Hungary will, however, have several chances to appeal.
Orban’s re-election was not welcomed in Brussels. Picture credit: PXHere