Hungary has been a thorn in the side of the European Union for quite some time. The EU claims that Hungary is flagrantly violating its rules, while Hungary moans about EU overreach. As Russia’s war on Ukraine continues, the European Union’s solidarity, which was initially unified in putting economic restrictions on Moscow, seems to be unraveling in the midst of its own countries’ need for energy. Hungary, for example, has been blocking supplies to Ukraine. What does it mean for the EU, and how does it affect their relationship?
Over the last decade, relations between Hungary and the European Union have significantly deteriorated, but this year they have become more strained as Victor Orban introduced reforms. In the existing crisis, Orban’s criticism of Ukraine and insistent opposition to additional sanctions against Russia stand out in the context of a rare display of European Union solidarity in favor of Ukraine. Russia’s war on Ukraine has brought the European Union and NATO closer together than they have been in decades. In this regard, Hungary seems to be a bad actor, standing out by being the only E.U. member state openly opposed to the Western agenda. While European allies deploy weapons to Ukraine and attempt to reduce their reliance on Russian energy, Hungary has taken a quite different approach. Viktor Orbán, Prime Minister of Hungary, has denied sending military aid to Kyiv, but Hungary has reached a gas agreement with the Kremlin to ensure it makes it through the winter. Furthermore, Hungary is more open to maintaining normal diplomatic relations with Russia, as evidenced by the fact that Victor Orban traveled to Moscow for Mikhail Gorbachev’s funeral.
Similarly, when the EU was deciding on energy matters, Hungary refused to agree to an EU price cap on imported gas, stating that it would end Russian deliveries. The senior adviser to Victor Orban argued that if the EU decided to set a cap, it would be required to exempt Hungary, just as it did with oil. This is undesirable to Hungary because the Russians have already made it clear that they won’t provide any more gas to the country if it happens, which would be against Hungary’s interests in terms of energy security. Hungary, which is a landlocked country that depends heavily on pipeline deliveries of Russian oil and natural gas, obtained a waiver in June when the rest of the EU decided to stop importing Russian oil in December. At least 15 of the 27-nation bloc’s members are calling for a price cap on imported gas, including Russian gas, and European Union leaders are discussing the matter proposing for such a cap to reduce unprecedented consumer inflation and energy price inflation. Hungary gets more than 80% of its gas from Russia, despite the fact that it has repeatedly contested the EU’s sanctions against that country. Additionally, it functions as a transit nation for a crucial oil pipeline that transports supplies to the EU. In response to Russia’s invasion of the neighboring country of Ukraine, Hungary has criticized EU sanctions against Moscow, arguing they have failed to punish Moscow while endangering the European economy.
The leadership of Viktor Orban, a nationalist, is suspected by Brussels of undermining the rule of law and exploiting EU funds to enrich its allies. During his more than a decade in power, Victor Orban subdued courts, limited media and non-governmental organizations, and restricted migrants, prompting the EU Commission to suspend 7.5 billion euros assistance from Hungary due to corruption. Since then, Hungary has consistently opposed significant EU proposals.
To hit back, on December 6, 2022, Budapest blocked an 18 billion euro ($18.93 billion) financial aid package to Kyiv, leaving the remaining 26 countries scrambling to keep the money supply continuing. It also widened the gap between the EU and recurrent member Hungary, putting the war-torn country under even more financial strain. However, for the EU, acquiring the funds is bound to be more difficult and could take much longer without Budapest’s approval.
Because the EU did not find an alternative solution, on December 12, 2022, it secured an agreement with Hungary to lift the financial freeze to get Ukraine’s aid approved. As a result of Hungary’s failure to carry out significant rule-of-law reforms, the executive branch of the European Union recommended that billions of euros in EU funds remain frozen. This move highlighted the widening gap between the EU’s standard Western democratic principles and its partner’s democratic slip back. The deal releases about €1.2 billion for Hungary, but Orban still needs to persuade his fellow EU countries that he has implemented significant reforms in order to recover the remaining €6.3 billion. It is unprecedented for EU funds to be withheld from a member state due to concerns about democracy. In addition, the EU is postponing around €5.8 billion of the EU’s post-COVID-19 recovery funds due to Hungary’s democratic regression and reservations over judicial independence. Due to the agreement signed with Hungary’s right-wing government under Viktor Orban, the EU can keep its promise to continue supporting Ukraine in the face of Russia’s invasion.
Based on what has happened in relations between the EU and Hungary, it is unavoidable that we will continue to see strained relations between Hungary and the European Union in the coming years. It is important to remember that the money for the rule of law mechanism ultimately stayed in the budget notwithstanding the purported triumph in Brussels and the absence of a veto. In turn, the veto might have led to the creation of a unique reconstruction fund that would not include Poland and Hungary. The majority of the member nations currently have a relatively negative opinion of Hungary’s approach toward the European Union.