Welcome to Wider Europe, RFE/RL's newsletter focusing on the key issues concerning the European Union, NATO, and other institutions and their relationships with the Western Balkans and Europe's Eastern neighborhoods.
I'm RFE/RL Europe Editor Rikard Jozwiak, and this week, both my briefings focus on Hungary and how the country's leaders have managed to irk Brussels all summer long.
Briefing #1: Brussels Is Not Happy With Hungary's Visa Plans
What You Need to Know: Many may have thought that Hungary, which currently holds the six-month rotating presidency of the Council of the European Union until the end of the year, would lay low in August. It's vacation season and, essentially, the Brussels machinery grinds to a halt.
But then, at the end of July, Budapest announced that it would expand its "national card" immigration program to include Belarusians and Russians, as well as citizens from Bosnia-Herzegovina, Moldova, Montenegro, and North Macedonia. (Serbians and Ukrainians were already on the list.)
The card allows holders to work in Hungary for two years and be joined by their immediate family. It is simpler to get hold of than a regular work permit or a business visa. After three years, it can even lead to permanent residency.
The inclusion of Russians and Belarusians has irked Brussels and several member states alike, as it appears to contradict the EU policy toward the two countries. The bloc has imposed visa bans and asset freezes on well over 2,000 citizens from both countries over the ongoing war in Ukraine. It has frozen visa-facilitation agreements and made it harder to travel from Belarus and Russia to the EU's borderless Schengen zone via flight bans and limits on other modes of transport. On top of that, hundreds of Russian diplomats have been expelled from EU member states, many over accusations of espionage.
Deep Background: The main criticism of Hungary's expansion of its "national card" program is that it could lead to undermining security in the Schengen zone and increasing the possibility of Russian spying, as cardholders -- in both theory and practice -- can move freely across most of the bloc.
That critique was the gist of EU Home Affairs Commissioner Ylva Johannsson's August 1 letter to the Hungarian authorities, in which she noted that "there are increasing reports of sabotage and attacks on our critical infrastructure and other hostile acts." In the letter, seen by RFE/RL, she also said that "while the EU member states have the competence of issuing long-stay visas and residence permits, such schemes need to be carefully balanced not to put at risk the integrity of our common area without internal border controls and to duly consider potential security implications."
She also asked Budapest to get back to her on 13 questions, included in an annex to the letter, by August 19. Perhaps the hardest of those questions will concern Hungary's justification for granting "national cards" to citizens of Belarus and Russia, as well as whether or not Budapest conducted a security analysis prior to making the decision.
Johannsson also pressed Budapest on whether it will systematically carry out a search in the Schengen Information System (SIS), a database used by member countries to share security and border data, on Belarusians and Russians applying for the "national card." And, more importantly, she asked what would happen in case someone applying for the card was red-flagged in the SIS.
Other questions relate to how Hungary is ensuring that sanctioned people aren't entering Schengen, and if border checks on Russian and Belarusian travelers are more stringent when compared to other third-country nationals. In the letter, Brussels also asked the Hungarian authorities how many applicants were expected from the two countries and the status (approved, refused, or pending) of those who have already applied.
Drilling Down
- Despite Brussels' indignation on this issue, there is precious little the EU can do. EU officials I have spoken to on background say that Hungary has once again found a loophole in the EU's legal framework. "I am afraid they have the legal arguments on their side," one diplomat with knowledge of the situation told me, adding that on national visas they don't really need to consult with anyone else in the bloc.
- In an internal note, seen by RFE/RL, Hungary tried to reassure the EU member states by noting that "Russian and Belarusian citizens may enter Hungary, and thus the Schengen area, only in possession of a valid visa and may obtain a residence permit only after the procedure laid down by law."
- But if the other member states and the European Commission are still concerned, is there really nothing they can do? First of all, nothing will happen in August; Brussels is simply not up to speed yet on the issue and will want to assess the situation properly when its diplomats and bureaucrats are back from their vacations. Second, while some are calling for Hungary to be kicked out or suspended from the Schengen zone, that is very unlikely to happen. First of all, ejecting Hungary would have to be a unanimous decision, which would be almost impossible to get. After all, Hungary's neighbors in the EU are benefiting from the free movement of people, services, and goods, thus any proposed restrictions would have a negative economic impact if they were implemented. It is also worth noting that it would be unprecedented, as no country has been kicked out of Schengen since it was introduced back in 1985.
- Alternatively, heightened security measures may be implemented at the borders of Hungary's neighboring countries and at airports for flights arriving from Hungary. Given that home-affairs issues, such as this one, are a national competence, it is up to each and every member state to introduce more stringent measures. But they do need to notify Brussels of their moves. Such temporary restrictions were, for example, dusted off during the COVID-19 pandemic, the migration crisis of 2015-16, or with increased terror alerts.
- While Hungary may very well get away with it, there is increased frustration in the bloc about Budapest's behavior. "Momentum for some kind of pushback is growing," one EU official, who preferred to remain anonymous because they do not have the authority to speak on the record, told me, adding that Hungarian Prime Minister Viktor Orban's trips to Moscow and Beijing earlier in the summer, ostensibly to pursue peace in Ukraine, still rankle.
- The nuclear option -- suspending Hungarian voting rights in the Council of the European Union -- is not off the table. The threat is there and has been for years, but is it realistic? So far, there is no appetite, but if France and Germany, the drivers of EU policy, get fed up with Hungary, things could start moving. Unanimity is needed here as well, but Berlin and Paris could cajole others into going ahead. "Until now, they were thinking that they had leverage over Budapest, and that they would act constructively during its presidency," one ambassador told me. It will be interesting to see how much patience diplomats will have with Hungary once they return from the beach.
Briefing #2: Budapest Wants To Import More Russian Oil
What You Need to Know: Although Hungary (and to a lesser extent Slovakia) have been a thorn in Brussels' side on a number of issues and have been frequently criticized, particularly by Ursula von der Leyen's European Commission, this hasn't stopped Budapest and Bratislava from recently asking for the EU executive's assistance in getting Russian oil flowing in larger volumes to the two landlocked Central European countries.
Both countries have since mid-July complained that the recently imposed Ukrainian sanctions on the Russian oil firm LUKoil have resulted in stopping the flow of pipeline crude sold by the Moscow company. They sent a joint letter to the commission, asking for emergency consultations with Kyiv, saying that Ukraine had breached both the spirit and the letter of the Association Agreement it had signed with the EU in 2014.
Yet, it appears that Hungary and Slovakia haven't managed to get their way. In a letter to their foreign ministers, sent by Valdis Dombrovskis, vice president of the European Commission and Brussels' trade supremo, it was noted that "the commission services have preliminary concluded that urgent consultation does not appear to be warranted as there is no current indication of an immediate risk to the security of supply."
The August 1 letter, seen by RFE/RL, also states that "according to the information at our disposal and in line with commission analysis, it appears that the sanctions imposed by Ukraine on LUKoil do not affect the ongoing oil transit operations via [the] Druzhba [pipeline from Russia to Central and Eastern Europe] carried out by trading companies as long as LUKoil is not the formal trader of the oil."
Deep Background: Some 5.5 million metric tons of oil were shipped via the Druzhba pipeline in the first half of 2024, of which half was sold by LUKoil. The remaining oil was transited by smaller Russian producers that aren't yet sanctioned by Ukraine.
It is worth pointing out that Hungary and Slovakia are still allowed to import crude oil from Russia. They, along with Bulgaria, the Czech Republic, and Poland, got exemptions from EU-imposed sanctions on pipelined Russian oil imports into the bloc that were agreed in 2022 and entered into force a year later.
There is a difference with Hungary and Slovakia, though. Both Bulgaria and Poland have now completely cut Russian pipeline imports, and the Czech Republic is working hard to do the same in the near future. When these exemptions were granted, there was an understanding that the member states should actively work to find alternative supplies in order to minimize dependence on Russian energy imports.
Drilling Down
- Hungary has actually increased its reliance on Russia, with the country importing 56 percent more Russian crude in 2024 than it did before the Kremlin's full-scale invasion of Ukraine in early 2022. Slovakia's oil imports from Russia have decreased somewhat since 2022 but still amount to over 50 percent of its total imports.
- The need for Hungary and Slovakia to diversify was also hammered home by Dombrovskis in his letter: "A significant number of member state representatives asked about the availability of alternative supply routes in addition to the Druzhba pipeline for the import of crude oil and questioned why Hungary and Slovakia had apparently not yet explored alternatives so far."
- One of those member-state representatives was Croatian Prime Minister Andrej Plenkovic, who wrote a letter to European Commission President von der Leyen on July 31, a day before Dombrovskis' missive to Bratislava and Budapest. The letter, seen by RFE/RL, notes that "the alternative options that Croatia can offer...have so far been underutilized."
- Plenkovic is a close ally of von der Leyen and a stalwart of the center-right European People's Party (EPP), the largest group in the European Parliament, which the Hungarian ruling party Fidesz belonged to before quitting under pressure in 2021. The EPP also recently admitted Hungary's main opposition challenger, Peter Magyar and his newly formed Tisza party, to its ranks.
- Needless to say, the Croatian premier is also sensing a potential business opportunity. His letter points out that "Croatia, with its robust oil infrastructure -- including the Omisalj terminal, the Sisak storage tanks, the Urinj refinery near the port of Rijeka, and the JANAF Adriatic pipeline --possesses capacities that far exceed national needs."
- According to Plenkovic, the JANAF pipeline could be the solution for both Hungary and Slovakia, as it can "guarantee the transport of 14.3 mtpa (million tons of crude oil per annum) from the Omisalj terminal, on the island of Krk, to Hungary and Slovakia, and beyond."
- He noted that JANAF had already struck a deal earlier this year with the Hungarian oil company MOL for 2.2 mtpa for the rest of 2024, but this only represents some 15 percent of the transport capacity available. The letter concludes by stating that "in light of the recent circumstances and in the spirit of European solidarity, JANAF is willing to negotiate long-term contracts involving larger volumes to ensure energy supply security and reduce dependence."
- The question is whether Hungary is interested. Its foreign minister, Peter Szijjarto, brushed away Zagreb's offer by noting that "Croatia is simply not a reliable country for transit" and adding that Croatia had increased oil transit prices fivefold since the outbreak of the Ukraine war.
- This prompted JANAF to respond, noting that "the statement regarding JANAF raising fees over the last three years is completely untrue. The methodology applied to calculate the fees takes into consideration the distance and the level of capacity utilization for a specific pipeline section, as well as the negotiation process, and is not related to the legal entity [of JANAF] ."
- This issue is likely to come up when EU foreign ministers gather for the first time after the summer break on August 29 -- a meeting that was originally supposed to be hosted by Budapest but was moved after several EU member states complained about Orban's trips to Moscow and Beijing.
Looking Ahead
While the EU and NATO are still mostly hibernating for the holidays, Eurostat, the bloc's official statistical office, is up and running. On August 14, it will publish its estimate of gross domestic product (GDP) growth and unemployment rates across the eurozone -- the countries that have adopted the euro -- and the EU. The statistics release is expected to show that an estimated 6 percent of the bloc's workforce is unemployed and there has only been 1 percent of GDP growth.
That's all for this week! Feel free to reach out to me on any of these issues on Twitter, @RikardJozwiak, or by e-mail at jozwiakr@rferl.org.
Until next time,
Rikard Jozwiak
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