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Hungary the Only EU Country to Oppose Global Minimum Tax

The European Parliament urgently addressed the issue of a national veto threatening the global tax agreement on Thursday after Hungary said last week that it did not support the new global tax for the richest companies, reported MTI.

Paolo Gentiloni, the European Commissioner responsible for economic policy, said that the European Commission had tried to come up with a proposal for a directive that would be acceptable for all Member States, but at the last minute, just one, Hungary, refused to support it.

He added that the Hungarian government cited the economic effects of the war in Ukraine as the reason not to accept the proposal.

But the Commissioner pointed out that the war in Ukraine is affecting all EU Member States, which is exactly why measures that generate revenue for the EU to protect its citizens from the effects of the war are needed. “A 15% corporate tax rate would be a huge benefit, so why deprive ourselves of it?” asked Gentiloni.

The initiative is also in line with a OECD framework proposal that has the agreement of 140 countries. As HVG‘s EUologist wrote, its intent is to eliminate tax havens that allow multinationals to avoid paying taxes or significantly lower their tax burdens. In addition, the proposal would generate an extra €48 billion (US $50.5 billion) in annual revenue for the Union.

Representing the current French presidency of the EU, Clément Beaune, France’s state secretary for European affairs, said that even with a Hungarian veto, the EU’s founding treaties allow a group of Member States to commit themselves to certain issues through so-called enhanced cooperation. This means that the other 26 Member States in the EU may decide to introduce a global minimum tax on their own, excluding Hungary. [Magyar Hang]

Hungary to Conditionally Support EU Accession for Ukraine and Moldova

Viktor Orbán took part in a video conference on Monday in preparation for the next EU summit on Thursday and Friday. At the initiative of European Council President Charles Michel, the Hungarian Prime Minister met with the prime ministers of Belgium, Bulgaria, Estonia, Luxembourg and Malta, said Bertalan Havasi, the Prime Minister’s spokesman, to state news agency MTI.

Orbán agreed with the EU proposal to grant European Union candidate status to Ukraine and Moldova. But he added that Hungary and several other member states believe that Georgia and Bosnia should also be offered candidacy for EU membership, and at the same pace as the other two countries.

The European Commission recently declared its support for officially designating Ukraine as a candidate country for European Union membership.

Ukrainians are ready to die for the European perspective. We want them to live with us the European dream.

-wrote European Commission President Ursula von der Leyen on Twitter shortly after the announcement.

While EU candidate status for Ukraine could bring the war-torn country closer to European integration, the European Council, comprised of heads of state and government from EU Member States, also has to give its blessing to any new members to the 27-nation bloc.

The Commission is also proposing candidate status for Moldova, but currently not for Georgia. [Telex]

Navracsics Schmoozing in Brussels to Get EU to Open Up Funds Spigot

Tibor Navracsics, the minister responsible for the use of EU funds, is holding talks in Brussels, where he is trying to convince the representatives of the European Commission that the Hungarian government is serious about the “country-specific recommendations” needed to access EU reconstruction funds.

The EC wants Hungary to crack down on corruption and improve education before it provides the country with any of the recovery money. Navracsics has said that he wanted Hungary to be able to access the money in 2022.

Hungary’s share of the fund is 5.8 trillion Ft. (US $15.2 billion), of which 2.5 trillion Ft. ($6.6 billion) is a non-repayable grant and 2.8 trillion Ft. ($7.4 billion) is a subsidized loan. According to Magyar Hang, Hungary’s request for the loan, which Viktor Orbán originally had rejected, is an indication of the deterioration of the Hungarian economic situation.

European Commission representatives stated that the recent negotiations had produced some results, but the sections on corruption and education were still open.

Hungary is the only EU country that has not had its reconstruction plan accepted by the Commission. Poland’s plan has been accepted but it has not received the funds yet, as the EU believes that the country still needs to remove some key elements of judicial reform that seriously undermine the rule of law.. [Magyar Hang]

Hungary Spent EU Money Intended for Ukraine Refugees on Other Purposes

Although Chancellor Minister Gergely Gulyás said two weeks ago that Hungary had not yet received funding to care for Ukrainian refugees entering the country, a European Commission official wrote to that the REACT-EU fund had already provided the country with €263.2 million (US $279.4 million) out of an expected total of €299.6 million ($318.1 million) for refugee care.

The European Union decided in early April to provide financial assistance to Member States most affected by the Ukrainian refugee crisis through REACT-EU, with a total amount of €3.4 billion ($3.6 billion) allocated for this purpose.

However, REACT-EU was originally intended as an economic recovery program for countries hardest hit by the consequences of the epidemic, but had its mandate expanded for Member States to also spend the money on care for refugees arriving from Ukraine.

It now appears that the Hungarian government spent the REACT-EU funds on their original purposes of economic recovery instead of the refugees. The main problem, according to the official who spoke to the news site, is that it would have been appropriate for Hungary to spend at least part of the €263.2 million on refugees in need.

Officially, the Hungarian government is not supposed to receive any REACT-EU funding at all. Due to the high risk of corruption in the country, Hungary is the only Member State unable to access post-pandemic recovery funds offered by the European Union. [Magyar Hang]

Katarina Barley Wants to Suspend Hungary’s EU Voting Rights

Katarina Barley, Vice President of the European Parliament, wants to take away Hungary’s right to vote in the EU because of the frequent extortion threats by the Orbán government. In an interview with MDR Aktuell, the German Social Democrat politician stated that Hungary was abusing the principle of unanimous consent commonly used in the European Union, writes

Barley believes that Hungary’s right to vote can in principle be suspended due to the country’s rule of law violations, and that it is no longer possible to talk about democratic and constitutional conditions now that the country has gradually fallen into the hands of Viktor Orbán.

She noted that the principle of unanimous consent was adopted when the European Union had only six members, but has become unwieldy for 27 Member States. The problem is that the principle of unanimity can only be resolved through unanimous consent, she said.

The Orbán government recently drew negative attention to itself for repeatedly threatening to veto the sanctions package containing an oil embargo on Russian oil if Patriarch Kirill of Moscow was not removed from the list of sanctioned persons, which eventually happened on Thursday. [Népszava]

Patriarch Kirill Taken Off EU Sanctions List Following Hungarian Pressure

The head of the Russian Orthodox Church was removed from the European Union’s sanctions list after the Hungarian government strenuously objected to his inclusion, writes HVG.

It was reported on Wednesday that the Hungarian government had again rejected the sixth EU sanctions package. This time, it was not related to concerns over the country’s energy security, but because the EU was planning to freeze the assets of Patriarch Kirill, the head of the Russian Orthodox Church.

Brussels accuses Patriarch Kirill of actively supporting Russia’s war against Ukraine. In a sermon, Kirill said Russia had not attacked anyone and did not want a war, but was simply defending its borders.

Viktor Orbán apparently did not say anything about his intentions at the EU summit earlier this week, frustrating diplomats from several countries.

On Twitter, Hungarian government spokesperson Zoltán Kovács wrote that Hungary’s “position on the Patriarch ‘had been known for long,’ and no one in the Brussels summit stood up against it.”

Kovács’ position was not satisfactory for Michael Gahler, Spokesperson on Foreign Affairs for the EPP group in the European Parliament, who tweeted, “Shame on you! One day the Kompromat by which the Russians keep you compliant will be revealed. What an embarrassment for freedom loving Hungary!”

[444, Index]

Manfred Weber Fed Up With Orbán, Wants to End Unanimity in EU Decisions

I’ve honestly had it with Hungary and Orbán constantly blocking sanctions against Russia. We have to get past the principle of unanimity, and let a simple majority be enough.

-Manfred Weber, group leader of the European People’s Party (EPP) in the European Parliament, told Polish daily Gazeta Wyborcza prior to his expected election as party president in Rotterdam on Tuesday.

The politician from Bavaria’s Christian Social Union (CSU), who apparently spoke to a Polish journalist prior to the new sanctions agreement in Brussels on Tuesday morning, also warned Poles that the Warsaw government must finally understand that violating the rule of law and undermining an independent judiciary is the exact opposite of what the Ukrainians are fighting for.

Weber said that he was taking over the legacy of soon-departing EPP President Donald Tusk, who is returning to domestic politics and has also been also critical of the Hungarian government.

Among the highlights of Tusk’s term as president was “throwing out” Fidesz from the EPP in 2021, although the Hungarian ruling party claims it left on its own accord. [HVG]

Ukrainian Foreign Ministry Welcomes New EU Sanctions, But Disappointed in Hungary’s Position

The Ukrainian Foreign Ministry welcomed the decision by EU leaders to adopt the sixth sanctions package against Russia, but expressed disappointment with Hungary’s position on demanding an exemption from the oil embargo, the ministry said in a statement released on its official website on Tuesday.

The Ministry of Foreign Affairs is disappointed that due to Hungary’s resistance to the oil embargo, the adoption of the sanctions package took too long and made an exception for pipelines. But thanks to the efforts of the partners, especially the leaders of the European Council and the European Commission, an important decision was finally made.

-quoted European Pravda from the ministry’s statement.

Ukrainian Foreign Minister Dmytro Kuleba also said that “the oil embargo is accelerating the countdown to the collapse of the Russian economy and its military machinery.”

The Ukrainian Foreign Ministry calls on the EU to start making preparations right away for a seventh package of sanctions against the Russian Federation, including a ban on more Russian exports and other restrictive measures. The Ukrainian side has already submitted its proposals in this regard.

-read the statement from the Ukrainian Foreign Ministry. [Magyar Hang]

EU Inks Sixth Sanctions Package, With Exemptions for Hungary and Its Neighbors

European Union heads of state and government agreed on the sixth sanctions package against Russia, including an embargo on the country’s oil, shortly before midnight on Monday, writes Népszava‘s correspondent in Brussels.

Under the agreement reached on the first day of the summit, EU Member States who receive oil through the “Friendship” oil pipeline will be exempted from having to stop using Russian oil, which will otherwise be mandatory by the end of the year.

Apart from Hungary, this group includes the Czech Republic, Poland, Germany, and Slovakia.

As Poland and Germany have already announced that they would be weaning themselves off Russian oil within the next six months, the Hungarian, Czechs, and Slovaks, who consume only 10% of Russian imports to the EU, will not have to comply with the new sanctions. This satisfied one of the demands of Viktor Orbán, who insisted that shipments of pipeline-delivered oil be exempted from the embargo.

The final statement adopted at the summit does not specify how long the temporary exemption will be in effect, only stating that leaders will return to discuss the issue as soon as possible. The Hungarian Prime Minister also managed to receive a guarantee that if there is an interruption in the delivery of crude oil in the Friendship pipeline, the European Union will introduce emergency measures to ensure its supply.

As the statement read:

In the event of a sudden interruption of supply, security of supply shall be addressed through emergency solutions.

European Commission President Urusla von der Leyen stated in a press conference that the Adriatic oil pipeline would provide help to Hungary, which could expand its capacity relatively quickly along with converting its refineries to process non-Russian crude oil.

The political agreement on the oil embargo will soon be set in legal form by Member States’ representatives in Brussels, currectly expected to take place next week.

Viktor Orbán Hails Sanctions Agreement

Following the talks, Hungarian Prime Minister Viktor Orbán said, “We have reached an agreement stating that countries that get their oil through pipelines can continue to operate under the old conditions.”

He claimed that “we have defended the utility price cuts, and we have succeeded in beating back the proposal by the European Commission that would have banned the use of Russian oil in Hungary.” [Népszava]

EU Appears to Be Moving Ahead on Sixth Package of Sanctions Without Hungary

The demand by the Orbán government may be met, and the European Union’s agreement on an oil embargo against Russia could give at least Hungary, the Czech Republic and Slovakia permission to continue using the “Friendship” oil pipeline, Reuters said, citing EU sources.

The British news agency writes that the text of the draft agreement on the oil embargo has been finalized, which will be presented to the ambassadors of the member states on Sunday. It specifies that offshore oil transport will be sanctioned, but oil delivered by pipeline will be free from punitive measures for now.

Representatives of the Orbán government, most recently Gergely Gulyás at the Government Information briefing on Thursday, have repeatedly indicated that they would be willing to enter into such a bargain.

Only a quarter of the oil headed to the the European Union, Russia’s largest purchaser of crude oil, reaches the 27 member states through pipelines, according to estimates by the Brueghel Institute in Brussels.

This means that sanctions on maritime oil transport would be a major blow to revenue for Russia, which received about $1 billion a day until the end of April for its energy exports, despite having invaded Ukraine in February.

The oil embargo may be adopted as part of the sixth round of sanctions against Russia at the European Council summit on May 30-31.

Prime Minister Viktor Orbán has repeatedly threatened to veto the sanctions, stating that the oil embargo is equal to an atomic bomb dropped on the Hungarian economy, while Foreign Minister Péter Szijjártó has claimed that Hungarian oil refineries are specifically designed for Russian oil, and that converting them would cost €15-18 billion (US $16.1-19.3 billion). [Népszava]

Germany Open to Moving Ahead on EU Embargo on Russian Oil Without Hungary

Germany would be willing to support imposing an EU embargo on Russian oil without Hungary, said German Vice Chancellor and Minister of Economic Affairs Robert Habeck.

In an interview with Deutschlandfunk, Germany’s national public service radio, the Green politician said he was disappointed with how protracted the oil embargo matter had become.

The European Commission is leading the negotiations on the topic, and if the head of the Brussels-based body says “we will do it with 26 members and without Hungary, then this is a path I would always support,” Habeck said.

However, he said he had not heard such a proposal from the President of the European Commission, and he himself expected that the issue would eventually be resolved “as it always is” in the EU, meaning that “some countries will receive quasi-special rights” such as relief or a deferral, and the EU will devise new sanctions with the participation of all 27 EU member states.

On Saturday, Europen Parliament Vice President Katarina Barley told Deutschlandfunk that the EU may have to decide on a sixth round of Russian sanctions without Hungary, claiming that the Hungarian government was trying to take advantage of the sanctions proposal to “get more money” out of the European Union. [444]

Orbán Holds Talks With European Council President on Solving Sanctions Stalemate

Prime Minister Viktor Orbán and Charles Michel, President of the European Council, helds talks together on a video call, reports MTI. Their discussions focused on the effects that the war in Ukraine is having on the EU, in preparation for the next EU summit scheduled for May 30-31.

In addition to military and food security, the two sides also discussed the planned next round of EU sanctions, which will affect the Russin energy sector. As related by the state news agency, Orbán told the European Council President that a solution to Hungary’s supply concerns needed to be found.

While the government had previously rejected any energy-related sanctions in connection with Russia, Hungary has since voted to ban Russian coal imports, and communication from the government has repeatedly stated that they would also vote for an oil embargo under certain conditions.

However, these conditions are quite steep: a financial package of around €15-18 billion (US $15.9-19.0 billion) to modernize the entire Hungarian energy structure, or an exemption from pipeline oil transportation. [Telex]

“Everyone Knows” Hungary is an “Openly Corrupt Regime,” Says European Parliament VP

Katarina Barley, Vice President of the European Parliament, said that the request by the Hungarian state for billions of euros of aid in exchange for supporting the Russian oil embargo was “brazen.” She thinks that the European Union will have to decide on the sixth round of sanctions against Russia, which includes an embargo on oil, without involving Hungary.

In an interview with Deutschlandfunk, Barley said that there were four countries in the European Union that would be particularly hard hit by the effects of the oil embargo, the Czech Republic, Slovakia, Hungary, and Bulgaria, but she believes the European Union is trying to find a solution to the problem.

She stated, however, that Hungary was taking advantage of this situation to “get more money,” since recovery funds to Hungary have been blocked “because of the lack of the rule of law.”

The money should now be provided to Hungary in a different way, which will land in the pockets of Orbán’s family and his organization.

-said Barley, adding that the other three countries were willing to cooperate.

The Vice President pointed out that Foreign Minister Péter Szijjártó said that it would cost €15-18 billion (US $15.9-19.0 billion) for Hungary to develop its infrastructure to exclude the use of Russian oil. “It would be nice to know how they came up with this bill,” she added.

Just this month, we saw that the expansion and development of the entire highway system was once again given to Orbán’s best school friend, Mr. Mészaros, who is a plumber and the richest man in Hungary today.

-she stated, although Lőrinc Mészáros was in fact a gas-fitter before he became enriched by government contracts since Viktor Orbán came to power for the second time in 2010.

Barley noted that the highway tender was for 35 years and worth €14.4 billion ($15.2 billion), “so it is really an openly corrupt system. Everyone in Hungary knows this, and everyone in the EU knows it too.”

I find it brazen that they want €15-18 billion now, so that everyone knows where the money is going and who will be winning the tenders.

-she added. [Index]

“It’s Difficult for Us Because We’re EU Members,” Orbán Tells Serbian President

Viktor Orbán visited Serbia to attend the opening of the 89th Novi Sad International Agricultural Fair. “It is up to us rural people make sure the country and the land is cultivated,” he said, although HVG points out that the Hungarian Prime Minister, a lifelong politician, has never worked in the agricultural sector.

Speaking in the company of Serbian president Aleksandar Vučić, Orbán said that “these two countries are safe, whether we’re talking about natural gas or food products.” He added that “Serbia is well-prepared for the winter,” and “we are well on our way, but there are some decisions we still have to make.”

He then turned to Vučić and said, “it is difficult for you because you are not a member of the [European] Union, while it is difficult for us because we are members.” Orbán apparently did not provide any specifics as to why he found being a part of the EU “difficult.”

The Prime Minister reaffirmed that Hungary would not accept another round of sanctions against Russia, claiming that they would ruin the Hungarian economy. [HVG]

Hungary to Get €21M in Emergency Aid from EU

The European Commission is preparing €21.1 million (US $22.3 million) in emergency aid to Hungary for refugees fleeing Ukraine, writes Népszava.

The emergency aid will come from the EU’s home affairs fund, and a resolution stipulates that 30% of the funds sent to government agencies must be channeled to NGOs, as well as local and regional governments involved in the care of refugees in Ukraine.

The government will have to show the European Commission what it intends to spend the money on, and the Brussels-based body will check afterwards to determine whether the funds were actually spent as intended and in accordance with the rules, according to the news site. [HVG]

EU May Put Off Russian Oil Embargo Due to Hungarian Opposition

Some EU member states are already suggesting that new sanctions on Russian oil be postponed due to Hungarian opposition, and that other punitive measures against Russia be set up in the meantime, writes Bloomberg. Implementing any sanctions requires the consent of all 27 Member States.

Hungary argues that the move would do too much damage to the economy, making the idea of postponing the oil export ban increasingly popular. However, a diplomat claims that some countries are worried that putting off an oil embargo would be a sign of weakness.

The EU wants a ban on the purchase of Russian oil in Member States within the next six months, and on refined petroleum products by early January next year.

However, states heavily dependent on Russian oil would get a temporary exemption from the ban: the Czech Republic would be exempt until June 2024, while Hungary and Slovakia would receive an exemption until the end of the year.

The article states the President of the European Commission, Ursula von der Leyen, would have a video call with Viktor Orbán and other leaders in the region, but that it had been postponed and no new date has been set for it yet. [Magyar Hang]

Two-Thirds of Hungarians Want to Reduce Russian Energy Dependency as Soon as Possible

67% of Hungarians think that the EU should reduce its oil and gas dependency on Russia as soon as possible, reports Átlátszó. However, this was still far below the EU average of 85%, a new poll shows.

The European Commission conducted a comprehensive poll among EU citizens in April on support for EU responses to Russia’s aggression against Ukraine. The Portuguese were most in favor of cutting off Russian gas and oil, with nearly 100% of those surveyed believing that ending energy dependency on Russia was urgent. But a very high proportion of the population (over 90%) thought the same in Malta, Finland, the Netherlands, and Poland.

Comparatively, many fewer Hungarians were in support of the idea, which perhaps shouldn’t be a suprise when the Hungarian Prime Minister makes statements such as “it won’t help if we shut off Russian oil and gas and the Hungarian economy grinds to a halt three or four days later.”

Support for reducing Russia’s energy dependency was only lower than Hungary in Bulgaria and Slovakia, with 63% of the population of the former favoring the idea, and only 59% of the latter. [Átlátszó]

Refuting Orbán, Scientists Say EU Climate Policies Did Not Cause Energy Prices to Rise

Neither wind energy production nor EU climate policy raised market prices for natural gas or electricity, claim PhD economists Enikő Kácsor, András Mezősi and László Szabó from Corvinus University’s Regional Energy Economic Research Center (REKK) in Budapest.

By the end of 2021, the price of natural gas had increased more than ten times, while coal was four times higher compared to January 2020. In addition, the carbon dioxide quota had tripled during this period, and the price of electricity on the Hungarian stock exchange was four and a half times higher.

However, the REKK researchers cite a slowdown in Russian gas deliveries, which Moscow began even before the start of the war, as the primary and most important factor in the rise in gas prices. At the same time, they believe that Russia’s aggression in Ukraine will prevent prices from going back down.

Among reasons for higher natural gas and electricity prices are the post-Covid economic boom, increased global demand for liquefied natural gas, and the shutdown of gas extraction in the Dutch gas fields due to man-made earthquakes, the group noted.

Although the research institute did not directly criticize the Orbán government in its study, except in relation to the utility price cut policy, its findings appear to refute some of the main theories by the Fidesz government as to why energy prices have increased so much, particularly in regards to the European ETS carbon dioxide quota exchange system and the decrease in production by wind farms. [Népszava]

Is Huxit Party Orbán’s Way of Testing Hungarian Public Opinion on Leaving EU?

444 has an interesting theory as to what may be behind yesterday’s news of the tiny Volner Party changing its name to the “Huxit Party” and declaring Hungary’s departure from the European Union as its main goal.

According to experts the news site spoke to, “it communicates that Viktor Orbán is now openly testing how receptive the Hungarian public is to leaving the EU.”

This doesn’t mean that the Prime Minister is already heading for the exits, writes the site, but it does “float the subject on the horizon, and bring it one step closer to the world of theoretical possibilities.” [444]

Szijjártó: We Won’t Vote for Latest Russian Sanctions

“We will not be voting on another round of sanctions in Brussels until there is a solution to Hungary’s energy security,” wrote Minister of Foreign Affairs and Foreign Trade Péter Szijjártó on social media on Sunday.

Szijjártó wrote that he had spoken by phone with Abdulla Shahid, the President of the UN General Assembly. The Hungarian Foreign Minister called on Shahid to continue to use the prestige of the United Nations for a ceasefire and peace-building, as “it is in the interests of us Hungarians for there to be peace as soon as possible.”

We also talked about the new sanctions package from Brussels. Shahid is well aware that we have voted in favor of all the sanctions packages so far, but this latest one would destroy the security of Hungary’s energy supply, which has been on solid footing until now. Until there is a solution to the problem posed by the Brussels proposal, we will not vote in favor of this package.

-wrote Péter Szijjártó on Facebook.

On Friday morning, Prime Minister Viktor Orbán called the latest sanctions an “economic atomic bomb” for his country. [Index]