Partnership with Russia is prosperity for EU - Hungary govt spokesman

SS: Sometimes it does seem, though, that coming up with a common policy is the biggest problem for the EU. Right now, for instance, the British Foreign Secretary has said the EU is preparing new sanctions against Russia, and countries like Lithuania, Poland, obviously support the extension of the existing ones. But then, there are other countries like Italy, and Spain, and Cyprus and they’re saying that prolonging sanctions by default is not such a great idea. Now, these differences, are they undermining EU’s unity as a whole?

ZK: We believe that the strength of European policy has always been a common decision at the very end, and we also believe that to be able to come up with proper and common decision we need all suggestions, all different kinds of perspectives on the table, and we believe that, after the lengthy discussion, actually, of the all the possible and probable solutions and approaches, there’s going to be one decision.

SS: But since the EU sanctions against Russia are going to be one of the main topics, I want your point of view on this. Do you believe the EU sanctions against Moscow - did they have the desired political effect? What’s your take on that?

ZK: Well, what we see, that the sanctions have, basically, negative impact on everybody who is being concerned, including the EU and also Russia. Hungary is very explicit, with many other countries actually, telling that we believe that the sanctions are not going to sort out this crisis, so we need a diplomatic solution, the sanctions are detrimental on both sides, and we believe that Russia cannot be excluded as an economic partner of the EU. Accordingly, at the moment, as we see the deepening of the sanctions is not a possible outcome of the next meeting. It is probably, that, maybe, prolongation is going to be on the table, but, again, we believe that a common European decision is a must - that is essential to reach agreement not only with Russia but also to bring the Ukrainian crisis to a peaceful end.

SS: So you feel like a common European decision is more important, even if the decision may be harmful to one or two or three countries in particular within Europe?

ZK: What I can tell you is that the Hungarian government is going to look for a common European decision, and it’s at the wisdom of the heads of state, who will come up with a solution that they think would be best.

SS: Because, obviously, countries like yours, as opposed to France or Germany or UK, who are huge and have great economies, they are suffering much more from these reversed sanctions, because Russia also imposed sanctions on EU food import. I just want to hear you out, why countries like yours are willing to pay the price for EU’s tough line?

ZK: Because, again, that is strength of the Europe, that there’s a common European decision and everybody sticks to it. Again, it is true that following a section, or a period, when bilateral economic relations were very active and upsurging, like 4 points back in 2013 to 2014, after the introduction of the sanctions, we have dropped 14% in our volume of trade with Russia. So, definitely it is causing daily and considerable damage to the Hungarian economy. So, we always talk about this, we believe that what it is detrimental for Hungary is also detrimental for Russia; as a matter of fact, you have to keep in mind that other, larger, countries, like Germany, France and the UK, have larger volume of trade with Russia - so everybody’s suffering because of the sanctions, but again, a common decision has always been the policy of the EU. We belong to the EU, we stick to the values, we stick to the rules that are coming with our membership to the EU - that’s why we think that it is essential that we have a common policy, addressing all challenges and issues that are emerging in bilateral or geopolitical conflicts

SS: Nevertheless, Hungary is often accused of undermining the EU consensus against Russia, going against a general EU policy line, so to say - but then again, Hungary’s relations with Russia isn’t quite the same as Portugal’s relations with Russia, or, I don’t know, Belgium’s relations with Russia - is it fair to insist on such a general line, when it comes to this issue?

ZK: A general line is always a result of compromise. Indeed, Hungary has intensive relationship with Russia and we have some ongoing projects, actually, including Paks nuclear plant, but, kind of, ejecting or projecting Hungarian standpoint into something it is not, that is being a different agency within the EU - is simply wrong. We’re trying to represent Hungarian national and economic interests, we stick to these as far as possible, and when, decision is made, this is the common decision.

SS: We’re going to get to that just in a little bit, but first, I want to read you out a quote: “If anyone thinks that European economy can be competitive without economic cooperation with Russia, that it is possible to create energy security without Russia - those people are chasing illusions.” These are the words of your Prime Minister, Viktor Orban. Who does he mean here, and who is chasing illusions?

ZK: We believe that the kind of approach that is being represented actually, sometimes, in a couple of capitals of Europe, also in the capital of the EU, is wrong when it’s trying to make a difference or trying to put European or member-states relationship with Russia as exclusive. We believe that it should be inclusive, that is, Russia has a place in cooperation with Europe. We always have regarded, for the past 10-15 years, or, if you like, after the fall of communism, Russia as an economic partner; for Hungary, Russia is a strategic partner in terms of energy, since we receive, basically, all of our oil supplies from Russia, and over 80% of gas supply. So, we need a European policy that is helping energy diversity, but also, that is keeping in mind that Hungary’s relationship with Russia, within the EU, should be regarded as a special one, considering these facts.

SS: I think that “special relationship” is getting a lot of, like, in-between-the-line hints towards Hungary. For instance, Romania’s president recently called Hungary’s policies towards Russia and the EU “risky”. What are you risking? Does it mean it’s risky to actually disagree with Brussels, is that what he meant?

ZK: What we believe is risky is that the country remains without gas supply, when the winter is coming. So, the Hungarian national and economic interest is that Russia, as an economic partner, and certainly, as strategic partner in terms of energy, is being considered as a partner. So, when the EU is suggesting a common energy policy, we have to also keep in mind that the infrastructural surroundings and framework, in which we work, is not the same as in Western part of Europe. There are no alternative routes, just to mention that the “South Stream” that has been the latest project, actually, of the joint Russian-European investment has come to a halt and left the situation, that is energy security, unsorted. We experienced problems with the pipelines coming through the Ukraine back in 2009, because of the ongoing armed conflict and because of the political uncertainty, it is a possibility, actually, that it’s going to come again - so we need alternative route. So, we need Europe’s assistance and Europe’s help in establishing these alternative routes. But, even so, if we have these alternative routes and supplies of gas and oil, the geographic vicinity and the traditional partnership of Hungary and Russia still remains there, and that is, as the PM said, we believe that without Russia, the future of European energy security and competitive prices is impossible.

SS: United EU position is one thing, but then there are also the American-EU relationships and their common policies. For instance, U.S. Vice-President Joe Biden said: “Complaints made by some European states about costly sanctions against Russia are inappropriate and annoying” and that’s after he said President Obama had to embarrass Europe into actually taking economic hits. Why should Europe be the one taking economic hits here?

ZK: I think Europe has to stick to its own interests, actually, when coping with Russia, since this is our geographic reality. We are neighbors, we believe that the future of Europe, not only in terms of energy policies but also in terms of political relationships, is unimaginable without Russia. So, again, this is not a new question, if you like, it is going back for decades, if you like, for centuries, whether Russia belongs to the European continent in terms of political unity or political environment. We believe that Europe has to find its own ways and means of dealing with Russia, and that it cannot be excluding Russia from the political partnership.

SS: Now, Prime Minister Orban has said that U.S. is putting great pressure on Hungary over its relationship with Moscow. What kind of pressure is that? And, also, how much influence does the U.S. has over EU policies?

ZK: In the relationship with the U.S. we have some political differences, recently, but as our economic and military, security partnership is on a very high level, it’s outstanding. We believe that this is going to be sorted out. We have bumped into and came across, say, issue of sanctions, and Hungary’s outspokenness on the issue, but we believe, we have cleared this out, actually, with the U.S. officials in the recent weeks. So, again, as just recently Ms Nuland has announced, Hungary and basically all of the European member-states have sticked to the common European decision and that’s going to remain a European policy, we believe.

SS: So, I’ve been reading up on Western press, okay, so your prime minister is kind of being crucified there. He’s often called “authoritarian” or “pro-Kremlin”, U.S. Senator John McCain called your Prime Minister “a neo-fascist dictator”, so I’m just wondering - does contact with Russia automatically makes you a villain in the eyes of the West? I just really want to get your personal opinion on that.

ZK: I don’t have a personal opinion, obviously, I’ll tell you government’s opinion, and that is that the kind of emotionally-generated expressions that we have witnessed - we have to step over them, and that is we believe that we are representing Hungarian national interests. I’m not only trying to be diplomatic, but also, I mean, we have to switch, if you like, perspectives. When somebody’s trying to push Hungary into a position which we are not in, and that is representing any other nation’s or any other government’s interest - is simply wrong. We’re just trying to represent our own national interest, and as I said earlier, we do have a partnership with Russia that cannot be avoided. We are basically dependent on natural gas and we dependent on the Russian oil - and that is a fact, and that is a fact that nobody can disregard. I mean, if, Europe is coming up with any kind of other alternative suggestion, the EU also has to keep in mind that this is unavoidable circumstance.

SS: Okay. So let’s talk a little bit more about the national interests and the deal that Hungary struck with Russia with a nuclear energy plant, just recently. It obviously, right away, came under EU’s criticism - so the EU regulators can even block the deal, from what I understand, or impose a fine, or veto the project. What will Budapest do in this case?

ZK: We don’t speculate about these things, we proceed and go on with a project as we agreed with our Russian partner. AS you know, we are in the early phase, actually of the project. We have established the financial framework in which it is going to work. We have basically the basic agreements with the Russian partner. The Hungarian Parliament earlier on has sanctioned, has basically approved the deal, and we believe that atomic energy should be on an equal footing, and it is on an equal footing within the European Union as a source of energy. We believe that it is impossible without atomic energy to establish cheap energy in Europe, and Hungary, if you’re talking about Hungarian national interests is basically in no position to have investments like Germany had in regarding or considering alternative resources. So, for us, atomic energy is a strategic investment that is contributing to the future of energy supply for the country, and we believe that this is one major step, actually, towards establishing low energy prices not only for the population but also for enterprises.

SS: Sure, but my question is: do you think the EU can veto that? And I’m not talking about speculation, I am talking about taking precautions when it comes to a strategically important project, like this one?

ZK: We are in connection, we are in continuous dialog with the European Commission and all the European agencies that are concerned. We believe that the project can be and should be compared to other projects going on in the EU: that is new nuclear plant being built in the UK, there’s an ongoing project involving or including Russian partners in Finland, so we believe that the Hungarian project does not stand out in any way, so it should be regarded in the same manner. We comply with all of the EU’s requirements and we believe that we have already supplied and we are going to supply all necessary information regarding the project.

SS: But it does stand out just because it is a deal that you’ve struck with Russia? I mean, you, out of all people understand that. So, do you think you could encounter problems?

ZK: No, no, we don’t. We don’t believe that simply having a deal with Russia, including or using Russian technology should be a problem. There are over 50 projects going on around the world, two dozen of them including Russian technology; we believe that all technological issues should be separate from any other political or other kinds of considerations.

SS: Hungary has been EU member for over a decade. Why isn’t it in a hurry to join with the single currency?

ZK: Under the treaty, we have an obligation to join euro, but we have to come up to different kind of criteria to be able to enter. In terms of economic growth, in terms and figures of other economic criteria, we are, basically, ready to enter the European currency. We have one major obstacle, and that is the high level of the national debt that is the sovereign debt. We are working on it, actually. We managed to decrease it from somewhere 85% to 77% by the end of the last year...it is going to take time. Also, you have to keep in mind that there’s ongoing debate about the future of the European currency, there are a lot of issues moving around, considering how many countries are involved, whether it is going to work for all economies among the certain circumstances. We’re monitoring that continuously and that’s why we haven’t set out a date for joining the euro at the moment. As a matter of fact, under the first Orban government, back in 1998-2002, at the end of that term we were very close, actually, to the criteria that would have made it possible for Hungary to join the euro. At the moment, that’s true, we are enjoying some of the advantages of having our own, if you like, monetary policy, including taxation policies. So, again, this is one aspect or one element that we have to keep in mind.

SS: On a different topic, speaking of the conflict in Ukraine, your PM said: “Ukraine’s ethnic Hungarian population should be granted autonomy”. They are concentrated in an area close to the Hungarian border, actually. How that sit with Kiev and Brussels?

ZK: We’ve been in the focus of remarks and debate consider our standing out for the rights of the Hungarian minority in Ukraine, but we’ve been very consequential on that: we’ve been stepping up for the rights of Hungarians living across the borders, basically in whole Carpathian basin, for historical reasons, over one third of Hungarian population was detached during the last century from Hungary. We always have to keep in mind, from national perspective their rights. We have never called for and we will never going to call for more that is being provided in any other part of Europe: that is some kind of self-governance and establishing the framework in which Hungarian national minority will find its own ways and means to be member of sovereign Ukraine. So that’s the meaning of out PM’s calling for the kind of self-governance and internal autonomy within Ukraine.

SS: Also, NATO is expanding its presence in Eastern Europe, with new bases, thousands of additional troops stationed there. Host countries hailed the move as “insurance” against the Russian threat. Would Hungary like an insurance policy like this, does Hungary feel threatened?

ZK: No, we don’t feel threatened. We believe, and that’s historical truth, that Central-European countries have a common historical perspective, if you like, a legacy, which sticks to their minds, but also there are different perspectives on the ongoing crisis. We do understand the different perspectives: at the moment Hungary hasn’t asked for any kind of troops or reinforcement of the ties and of the framework that is being provided by NATO membership.

SS: The president of the European Commission, Jean-Claude Juncker has proposed creating a “united EU army”; I want to have your take on this. Can the EU afford an army of its own right now?

ZK: There are already some established forms and frameworks of military cooperation within the European Union, since most of the members states are members of NATO - we believe that it is already providing a form and framework in which military cooperation is possible. We haven’t seen any specific suggestions, actually, on behalf of the Commission regarding common European army. So, we are looking forward to see the specifics.

SS: Thank you so much for interview. We were talking to Zoltán Kovács, spokesman for the Hungarian government, talking about his country's role in the EU, why Budapest is coming under fire for its relations with Russia, and the difficulties of a common EU foreign policy. That’s it for this edition of Sophie&Co, I will see you next time.