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A European Game of Thrones?
Hungary, Ukraine & Putin's Invisible Curtain

If Vladimir Putin gets his way, we may one day look back on the current crisis in Ukraine as a prelude to a much larger struggle between Russia and the West over the fates of the former Soviet republics. As U.S. and EU diplomats continue to quarrel about niceties around the Maidan, Russia is surreptitiously extending economic and political links to lands ever farther west. Last week, Hungary’s parliament approved a plan for the construction of two new reactors at the country’s only nuclear plant in Paks, which will be financed almost exclusively by a Russian loan of up to $14 billion.

Russia would hardly want to bankroll an expensive project that would allow Hungary to become less dependent on its extensive energy exports, so what gives? What does Russia want in return?

Hungary currently meets the majority of its energy consumption needs through oil and gas imports from Russia. The nuclear plant in Paks meets another 40 percent. While Russia has offered the massive loan at below-market rates, the deal includes a clause that gives Russia a say in the price of electricity generated by the plant once the new reactors go online in 2023. It is not difficult to see why critics fear that this deal will make Hungary, already heavily reliant on Russia for energy, fully dependent on it in the future. Members of Hungary’s parliamentary opposition also complain that the contract was not open to competition, contrary to previous assurances from Prime Minister Viktor Orban, and that the terms of the deal with Rosatom, Russia’s state-owned nuclear corporation, have not been made public. Some have called it a coup d’état.

There are notable parallels between the situation now arising in Hungary and the drama that unfolded in Ukraine. In both cases, Putin displayed his ability to use economic diplomacy to extend his sway across former Soviet republics. In both cases, Western diplomats failed to detect—or appear to be failing to detect—the gathering storm. The warnings of a few Hungarian parliamentarians over the inevitable loss of national sovereignty, just like the small bands of Ukrainian protesters that first appeared in Brussels, were all but ignored by the mainstream media until a full-fledged crisis erupted.

But in many ways it is the differences between the Ukrainian and Hungarian cases that make the latter all the more delicate for the European Union. Unlike Ukraine, Hungary is an EU member state; Russia’s overture is therefore a much more provocative flouting of the union’s integrity. Unlike the situation in Ukraine, the deal in Hungary directly threatens the economic stability and environmental security of the EU. And whereas in Ukraine it was Russian pressure that forced the government to back off a European trade agreement, this time the onus is on the EU to block or approve the Hungarian nuclear deal, potentially forcing a showdown.

Putin has made his intentions quite clear: He wishes to drape an invisible curtain across the European continent, imposing energy and economic dependence on those countries that fall under it. There is nothing in the Hungarian case that should necessarily cause a crisis as bitter and as bloody as the one currently raging in Ukraine. But how Western leaders respond to Putin’s challenge in Hungary will be an even more consequential gut check.

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  • Artur

    Just you wait until Russia starts playing in the Americas… The game is on.

  • Tom

    Pardon me, but when was Hungary a member of the USSR?

  • TommyTwo

    But we don’t want to deal with such atavistic realpolitik, we want to deal with matters such as national health plans, climate change, and peace processes! Why is Putin being such a meanie? It isn’t fair!

  • qet

    The last time a curtain fell across Hungary, it fell without Hungary’s consent and Western leaders were in no position to do anything about it short of prolonging WW2. Today’s curtain seems to be the work of Hungarian sovereignty, and so what exactly does Via Meadia propose? Perhaps interlocking Russia with EU members in this manner will have the long-term effect of integrating Russia with the West. If the EU were better managed financially then perhaps they could have outbid Russia on the loan and aid packages, but they are too busy paying for exorbitant welfare and pension states and now there is a whole new layer of European government that will expect pretty hefty pensions. Nor is the US in any financial condition to out-bribe Russia. And I don’t think any economic power would want to assist Hungary to become independent of whatever that actor was selling it.

  • Dexter Trask

    Gads, I miss the days when Viktor Orbán was a feisty opposition MP. (Of course, I also miss the days when the only significance of the reactor at Paks was for Hungarians to make dreadful puns on it and Tapsi Hapsi [Bugs Bunny]…)

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