Austria has slammed Hungary’s decision to suspend a key EU rule that says it must take back asylum seekers who first enter Hungary but travel onto other countries – and warned of “negative” consequences.
“Austria cannot tolerate that,” Foreign Minister Sebastian Kurz told his Hungarian counterpart Peter Szijjarto, a day after Budapest announced it was opting out of the Dublin Regulation.
Hungary has said that it is overburdened by illegal immigration – more than 60,000 people have entered the country illegally this year, according to government officials.
Many try to continue on to other European states but under the EU’s Dublin Regulation those countries can return asylum seekers to Hungary to have their application processed there.
Just days ago Hungary announced it would erect a border fence against migrants.
Kurz said it was “unacceptable” that a neighbouring country should suspend the core principle for handling asylum claims in the EU.
Speaking to Szijjarto on Tuesday evening, he said that he warned him that Hungary’s decision will have “negative consequences”.
The EU has called on the Hungarian government to immediately clarify its position.
“We all wish for a European solution, but we need to protect Hungarian interests and our population,” a spokesman for the Hungarian government told Austrian media.
Austria is the country most affected by Budapest’s move, with most of the migrants on its territory arriving either from Hungary or Italy.
Foreign Minister: Hungary ‘can’t wait any longer’ for solution to the crisis
Number of asylum seekers in Hungary has risen to 54,000 so far this year
Once in Hungary migrants can easily move to Schengen group countries
Preparation work for Hungary’s fence should be completed by next week
Hungary has vowed to erect a 13ft-high fence along its border with Serbia to block immigrants from crossing into the EU.
Foreign Minister Peter Szijjarto announced the 100-mile barricade, saying that Hungary ‘could not wait any longer’ for a solution to the migration crisis.
The number of migrants entering the European Union on the overland route through the Balkans, mostly across the southern Hungarian border with Serbia, has risen markedly.
So far this year, the number of asylum seekers in Hungary has surged to 54,000, up from under 43,000 in 2014 and 2,150 in 2012.
Mr Szijjarto said: ‘Immigration is one of the most serious problem facing the European Union today. ‘The EU’s countries seek a solution… but Hungary cannot afford to wait any longer.’
Preparation work for the fence should be completed by next week, he told a press conference.
The land route through the Balkan states is regarded as a well-established, cheaper and much safer way to reach Europe compared to the journey by sea.
In an increasingly well-worn path migrants arrive in Greece or Bulgaria from Turkey, trek through Macedonia and Serbia, which is not an EU member, into Hungary.
Once in Hungary, which is an EU member state, migrants can easily move into other Schengen group countries and onwards into northern Europe.
Hungary received more refugees per capita than any other EU country, apart from Sweden, last year. Some 95 per cent of them arrive from Serbia.
The total number of migrants crossing into Hungary is likely to reach 130,000 this year.
Hungarian prime minister Viktor Orban warned last week that he was considering ‘all the options’ including the complete closure of his country’s frontier with Serbia.
The government have already attempted to battle the crisis with a negative advertising campaign using slogans such as, ‘If you come to Hungary, you cannot take Hungarians’ jobs.’
A recent report by the EU border chiefs highlighted concerns that militant jihadis could be crossing into Europe overland concealed among migrants.
The border agency Frontex said the number of illegal entries in the Western Balkans region soared by 65 per cent last year to 66,000 from 40,000 with the border with Hungary and Serbia was the main hole in the frontier.
In December 2014, this border section accounted for over half of all illegal border-crossings into the entire EU.
It said: ‘The land route through the Balkan states is regarded as a well-established, cheaper and much safer way to reach Europe compared to the sea travel from Turkey or Greece on board small and usually overcrowded boats.’
It added: ‘Considering the ongoing conflict in Syria and Iraq, which attracts more and more radicalised foreigners, it is possible that such persons transit the region posing as migrants.
But the erection of such a permanent structure is likely to be seen as controversial. The Pope voiced his opposition to such measures during his general audience this morning saying governments must welcome refugees.
He said: ‘We must all ask for God’s pardon for the people and the authorities that have closed the door to these people who seek a family who seek to be looked after.’
Hungary says that it will build a fence along its border with Serbia to keep out migrants.
Foreign Minister Peter Szijjarto said that officials had been told to prepare a plan for a barrier along the frontier, stretching 175km (109 miles).
He added that Hungary could not afford to wait for the EU to find a solution to immigration.
There has been a sharp rise in the number of migrants and asylum seekers entering Hungary.
The government said about 54,000 migrants entered the country so far this year, compared to 43,000 people in 2014.
Police registered 10,000 people illegally going over the border in January alone.
However, tens of thousands of Hungarians have also been leaving the country.
“Immigration is one of the most serious problems facing the European Union today,” Mr Szijjarto told a press conference on Wednesday.
“We are talking about a stretch of border 175 km long, whose physical closure can happen with a four-metre high fence. The interior minister received an instruction to prepare that.”
Mr Szijjarto said that the fence will not contravene any of Hungary’s international obligations and that the plan will be prepared by next week.
Critics say that that the announcement is the latest anti-immigrant rhetoric from the Hungarian government.
A recent government billboard campaign with messages such as “If you come to Hungary, don’t take the jobs of Hungarians!” has caused controversy – and prompted the UN to prepare its own billboards highlighting refugees who have successfully integrated into Hungarian society.
The poster campaign is part of the government’s efforts to win public support for tough new immigration laws that are expected soon.
Hungarian officials have said that the billboards were part of a voter survey on immigration that was sent to eight million Hungarians.
The immigration questionnaire asked people whether they agreed that immigrants endangered their livelihoods and spread terrorism.
Serbian Prime Minister Aleksandar Vucic says he is “surprised and shocked” by the Hungarian government’s plan to close the border with Serbia and erect a fence along the shared border to keep out illegal migrants.
“I am surprised and shocked. We will discuss this decision with our Hungarian colleagues,” Vucic told Serbian state TV during a visit to Oslo.
Earlier on June 17, Foreign Minister Peter Szijjarto said the government instructed the Interior Ministry to “begin preparation work for a 4-meter-high fence along the length” of the 175-kilometer border.
“Immigration is one of the most serious problem facing the European Union today,” Szijjarto told journalists. “The EU’s countries seek a solution, but Hungary cannot afford to wait any longer.”
The number of migrants and asylum seekers entering Hungary, mostly across the southern border with Serbia, has sky-rocketed since the second half of 2014.
Officials said that so far this year, some 54,000 migrants had entered Hungary, up from 43,000 in 2014 and 2,150 in 2012.
BUDAPEST (Reuters) – Its currency is wounded and its economy besieged by sanctions, yet Russia still has money to spare for potential allies overseas. Even as it scrabbles for foreign funds, Moscow is poised to make a 10 billion euro ($10.8 billion) loan to Hungary, one of the European Union members most sympathetic to it.
Budapest plans to draw on the first tranche of the loan this year, a Hungarian government commissioner told Reuters.
Officially the loan is to finance the expansion of the Paks nuclear power plant, Hungary’s only atomic power station, which supplies about 40 percent of the country’s electricity. But critics say there is another motive as well: Russia buying favor with a European Union (EU) government.
“This Paks deal is camouflage,” said Zoltan Illes, a former lawmaker in the ruling Fidesz party who was a state secretary for the environment until 2014. “This is a financial transaction, and for the Russians this is buying influence.”
Illes, who opposes the use of nuclear energy, believes the deal is more about pumping money into the economy of Hungary, where Prime Minister Viktor Orban faces re-election in 2018, than providing electricity.
For years, Moscow has used commercial relationships – in particular gas sales – to exert influence across Europe. Now those methods are coming under closer scrutiny after the United States and EU imposed tough economic sanctions on Russia for annexing Crimea and supporting separatist fighters in the east of Ukraine.
In return, Russia is striving to retain ties, commercially and diplomatically, from the Baltic states to Europe’s southern rim. The loan to Hungary, agreed last year, is seen by some as part of that undeclared struggle for influence.
Government spokesman Zoltan Kovacs rejected such claims. “The rationale of the Paks investment is not about election campaigns and chances. It serves the country’s long-term energy security,” he said. He added that Russia was helping to build reactors in other countries and that Russia had less economic influence in Hungary than in other Western European states.
Officials in Moscow and Budapest say the nuclear deal was concluded purely on commercial and energy grounds and was good for both countries.
Hungarian Foreign Minister Peter Szijjarto told Reuters the deal was “the business (transaction) of the century.” Rosatom, the Russian state nuclear firm, and the Russian finance ministry responsible for the loan to Hungary did not respond to requests for comment.
Hungary had initially planned to put the contract to expand Paks out to tender, and some Western firms showed interest, along with Rosatom. But Reuters found that Hungary abruptly dropped the idea of a tender.
Specialists in the Development Ministry who had worked on plans to expand the Paks plant were sidelined, said two people familiar with Hungary’s energy sector. Instead, a small group close to Prime Minister Orban chose to award the contract to Rosatom. Russia offered a loan as part of the deal.
Kovacs, the government spokesman, said: “The whole project is being carried out with very serious professional preparations. Decisions of a political nature are naturally made by politicians.”
Since the agreement was struck, Orban has appeared much more friendly towards the Kremlin than his EU peers have done. He has said Europe was shooting itself in the foot by imposing sanctions on Russia, though he did not go so far as blocking sanctions. Orban is also leading a push for a new pipeline to take Russian gas to southeast Europe, bypassing Ukraine.
Last month, Orban hosted Putin in Budapest. He is the only EU leader to invite the Russian president on an official bilateral visit since Malaysian airliner MH17 was shot down over Ukraine in July 2014. Western officials say the plane was most likely brought down by a Russian missile; Russia denies any responsibility.
Standing alongside Putin in the Hungarian parliament, Orban adopted a conciliatory approach to Moscow. He said EU governments were “chasing ghosts” if they believed they could get by without cooperating with Russia.
Asked whether Hungary was being more friendly towards Russia because of the Paks loan, Kovacs said: “Russia is important from an energy aspect, what’s more, it is a strategic partner … But this is not a question of ‘friendship.'”
Orban regularly flouts EU rules with policies that critics label populist. Since he was elected with a two-thirds parliamentary majority in 2010, Orban has imposed windfall taxes on banks, telecoms companies and retail firms to keep the budget deficit in check.
He’s clashed with Brussels over curbs on the media. And he has consolidated his power with measures that critics say weakened democratic checks and balances – an allegation the government denies.
At the same time, he is not a natural Kremlin ally. As a young student in 1989, he burst onto the political scene with an impassioned speech demanding the withdrawal of Soviet forces from Hungary. He and Putin appear to have little personal affinity; at their Feb. 17 meeting in Budapest, their body language was stiff.
However, people who know Orban say he is a pragmatist. “I think power is incredibly important to him per se,” said John Alderdice, who was a leading member along with Orban of an organization called Liberal International, a global network promoting liberalism. “The issue (for him) is: ‘How can I get into power, and hold onto power.'”
In November 2010, soon after he was elected, Orban met Putin in Moscow for talks on economic issues, including further cooperation at the Paks plant. The plant is a huge concrete structure built in the 1970s by Soviet technicians on a floodplain next to the Danube River. Orban was looking to spur growth in Hungary’s economy, and Russia could help him achieve that.
The two men talked for hours, including over lunch, said a source familiar with the discussions. But no decision was taken on the Paks project.
Instead, a team of energy specialists at the Development Ministry in Budapest prepared for an open tender for a contract to expand the plant, according to a former energy official.
In addition to Rosatom, French company Areva expressed interest in bidding, as did U.S. firm Westinghouse, according to three people with knowledge of the preparations.
In early 2013, the plans for a tender were still on track, according to comments by the chief executive of MVM, a Hungarian state-owned energy group, published in the journal of the Paks power station. Bidders were told then that a tender would go ahead, according to a diplomatic source in Hungary.
Late that year the international context changed. In November 2013, then Ukrainian President Viktor Yanukovich rejected an association agreement with the EU and instead signed an aid deal with Moscow.
Thousands of pro-Western protesters camped out in Kiev’s central square, determined to make Yanukovich stick with the EU agreement or give up power. The stage was set for the biggest standoff between Russia and the West since the Cold War.
In Budapest, too, there was a change of tack. On Dec. 17, the parliament’s economy committee was convened at one day’s notice. Antal Rogan, a lawmaker with the ruling Fidesz party and head of the committee, called the meeting.
Orban’s chief of staff, Janos Lazar, told the committee that the government was in advanced talks with Russia on extending the life of the Paks plant. “It was sudden,” said Bernadett Szel, an opposition lawmaker.
Pal Kovacs, who at the time was state secretary for energy and had a leading role in preparations for the Paks tender, had not been told the tender was being scrapped, according to a person with links to Hungary’s state energy sector. The source said the deal with Russia was concluded by members of the prime minister’s inner circle.
Government spokesman Zoltan Kovacs said parliament’s approval of the deal showed it had broad political support.
Asked about the decision to scrap the tender and award the contract to Rosatom, Westinghouse said the decision was “abrupt.” Areva declined to comment. Government spokesman Kovacs said: “Of course, the agreement on concrete conditions was made at a given point of time, but it would be a mistake to say it was ‘abrupt.'”
Attila Aszodi, the state commissioner in charge of the Paks expansion, said the Rosatom deal stood out because the Russians had offered long-term financing for the entire construction project, something he said the other prospective bidders would not provide. He told Reuters in a December interview that a tender is “a good tool; however, it is not the silver bullet.”
The Hungarian government has also pointed out that the existing reactors at Paks were built with Soviet nuclear expertise.
Critics say the deal’s terms are generous. Hungary will begin repayments on the loan only once the new reactors are up and running in 2026 and will repay the loan over 21 years. Until 2026 the interest rate will be just under 4 percent, rising to 4.5 percent afterwards and 4.8 to 4.95 percent in the final 14 years.
The terms compare well to market rates for financing, although conditions in every debt deal are different. The Russian loan finally agreed will cover 80 percent of the construction costs, and Hungary will put up the rest. Hungary plans to start drawing on the loan this year to finance planning work for the new reactors, Aszodi told Reuters.
Moscow has voiced its happiness with Hungary’s recent support for Russia. In November last year, Russian Foreign Minister Sergei Lavrov said that Hungary – unlike other ex-Communist states in the EU – conducts itself “responsibly” and does not succumb to “Russophobic approaches.” At a Kremlin ceremony, Putin called Hungary one of Russia’s most important partners.
Orban’s invitation last month added to the mutual appreciation. During the visit, Putin and Orban agreed that Russia would give Hungary several years’ grace to pay for gas that Budapest had committed to buy but never used.
For Orban, though, the cost of staying close to Russia has gone up as the Ukraine crisis has deepened. Some EU governments are uncomfortable with what they see as a drift by Hungary into the Kremlin’s orbit. The United States has also criticized some of Orban’s policies towards Russia, and one U.S. diplomat said there had been a lack of transparency in granting the Paks contract.
Illes, the former environment secretary, said the Paks deal was typical of Orban’s pragmatic style of governing. In the short term he reaped domestic political benefits against opponents, and in the medium term the project will generate jobs.
But for Orban, he said, “long-term considerations, they don’t exist.”
(Additional reporting by Christian Lowe in Warsaw, Karolin Schaps and Nina Chestney in London, Barbara Lewis in Brussels, Geert de Clercq in Paris, and Vladimir Soldatkin and Maria Tsvetkova in Moscow. Editing by Richard Woods and Philippa Fletcher)
The opposition Együtt (Together) party said that the victims of the Quaestor brokerage scandal should be compensated up to 6 million forints (EUR 19.770) per capita from the funds of the central bank.
Deputy party leader Levente Pápa responded to central bank deputy governor László Windisch’s announcement that the bank would initiate compensating investors who subscribed “fictitious bonds” issued by a member of the Quaestor group from the Investment Protection Fund (Beva).
Levente Pápa said the announcement demonstrated that central bank governor György Matolcsy shifted responsibility for his mistakes and Quaestor CEO Csaba Tarsoly’s crimes to decent, law-abiding and well-functioning businesses in the capital market while spending 300 billion forints (EU 988m) on his foundations and “other fairy tales”.
The green opposition LMP said the government and ruling Fidesz were only pretending that they were tough on those who commit financial fraud and in reality “they are cleaning up Quaestor in front of our eyes”.
Party lawmaker Erzsébet Schmuck and economic policy expert László Heltai said that money was still being rescued from Quaestor despite the fact that two weeks have passed since the scandal broke out.
According to LMP, the Quaestor group had many links with the Orbán government and it was central bank governor György Matolcsy’s responsibility that the financial supervisory authority allowed the issuance of uncovered bonds for years.
The National Bank of Hungary (MNB) said it would initiate with the Investment Protection Fund (BEVA) the compensation of investors who subscribed “fictitious bonds” issued by a member of the Quaestor group, László Windisch, the bank’s deputy governor, said.
In an investigation conducted earlier in March, the MNB, in its capacity as financial market watchdog, found that Quaestor had sold 150 billion forints (EUR 455m) worth of securities over the approved limit in a 70 billion forint bond issue programme.
In the course of a legal analysis, the central bank found that because client money was transferred in the framework of an investment service, it “qualifies as an activity insured by Beva”, Windisch said.
Central bank governor György Matolcsy said that recent scandals at brokerages Quaestor and Buda-Cash were not on a scale that would present systemic risk to Hungary’s financial sector.
Meanwhile the opposition Socialists (MSZP) have called on the Foreign Ministry to make public its assessment reports made in preparation for a decision to withdraw the investments of the National Trading House from Quaestor.
In a letter written to Foreign Minister Péter Szijjártó, Attila Mesterházy, a Socialist member of Parliament’s foreign affairs committee, said that the ministry could this way demonstrate that “their money was not rescued on the basis of insider information from friends”.
He added that it was important to know whether the ministry was hiding vital information from the public when the National Trading House had cancelled its account at Quaestor just four days before the company announced bankruptcy.
The Foreign Ministry said that neither the ministry nor institutions linked to it had been in possession of insider information on Quaestor’s financial situation and they were not hiding any such information.
The Ministry could not see in advance that Quaestor would file for bankruptcy but the management of the National Trading House noted that clients’ confidence was shaken in brokerages after the bankruptcy of Buda-Cash and Hungária Securities and a significant part of Quaestor’s clients were withdrawing their money.
In reaction, the trading house’s management decided that it was safest to withdraw the trading house’s funds from Quaestor.
NATO Ally Shows Willingness to Mend Bridges as Hostilities Continue Between Ukraine and Russia
Hungary’s foreign minister has extended an olive branch to the U.S., saying his country is ready to start mending bridges weakened recently by Washington’s corruption allegations, which Budapest firmly rejects.
“In the current situation, when there is a military conflict under way in a neighboring country, cooperation with our ally gains ever greater significance,” he said. “We are hoping that our friend, the U.S., will present signs that this situation could come to a close.”
Mr. Szijjarto dismissed such allegations and said the U.S. needs to present evidence of wrongdoing by Hungarian officials. The U.S. has said it may not name those on its visa-ban list, but has presented some documents to the Hungarian government, which were dismissed by it as irrelevant.
“If we were speaking about corruption in earnest, the Hungarian government’s initiatives and measures do deserve acknowledgment,” Mr. Szijjarto said.
The foreign minister also said he was troubled by remarks made by Sarah Sewall, Under Secretary of State, who said in December that U.S. “embassies in two dozen countries in Central and Eastern Europe are currently drafting action plans for supporting and cooperating on anticorruption reform in their host country.”
Mr. Szijjarto said the comment came close to meddling in Hungary’s internal affairs.
“If someone has a self-declared action plan about another country, it is only acceptable if it is coordinated and carried out with our involvement,” he said.
“I do acknowledge the U.S.’s commitment to democratic values and spreading its values, but one of the most important democratic value is sovereignty. The Hungarian people made an unequivocal decision in 2010 and 2014 as well, which is only proper to respect,” Mr. Szijjarto added.
The Fidesz party won parliamentary elections convincingly in 2010 and was re-elected in 2014, giving the government of Viktor Orban a two-third majority each time.
Public support for Fidesz has fallen sharply since the most recent vote in April last year, but the party continues to lead in the polls, despite the protests.
Mr. Szijjarto said Hungary was sharply criticized during his visit to Washington last year “over every single measure” in its current legal framework, which he rejected, saying the country’s laws comply with those of the 28-nation European Union, which it joined in 2004.
While walking tightrope between the EU and Russia, Hungary has stood out in Central Europe during the crisis in Ukraine by pursuing closer business ties with the Kremlin.
Last year, it agreed to expand its nuclear plant in partnership with Russia’s state-owned Rosatom. It has been far less critical of Moscow and its actions in Ukraine than some of its regional peers.
Still, Mr. Szijjarto said attempts to reduce the EU’s dependence on Russian energy resources should continue.
Hungary is highly dependent on Russian natural gas, with more than 80% of its imports coming through a pipeline from Russia via Ukraine. The country would favor the diversification of its sources for gas, or at least the routes for access.
Since Russia scrapped the plan for the South Stream gas pipeline through the Black Sea, a link that would have crossed Hungary, it has to seek other opportunities and Mr. Szijjarto said the European Commission in Brussels, the bloc’s executive arm, should help in that process.
One such opportunity could be a gas pipeline from Azerbaijan, another a connection to the planned Russian gas hub in Turkey, or a line allowing it to receive liquefied natural gas from Qatar or the U.S., the minister said.
He urged the construction of an LNG terminal in Croatia, which would allow gas supplies to be delivered by ships in the Mediterranean Sea.
Serbian Foreign Minister Ivica Dacic and his Hungarian counterpart Peter Szijjarto have agreed that the South Stream gas pipeline is a project of mutual interest for the two countries.
Speaking after Friday’s meeting with his Serbian counterpart, Szijjarto called on Russia and the European Union to resume a dialogue on the South Stream project aimed at ensuring that the investment was compatible with EU rules.
Dacic emphasized that infrastructure projects such as Pan-European Transport Corridor #10, the Belgrad-Budapest railway line, and the South Stream gas pipeline project were points of mutual interest for Hungary and Serbia.
Szijjarto, as cited by Tanjug and the Bulgarian Telegraph Agency, argued that Hungary was convinced that the South Stream gas pipeline would substantially increase the security ofgas supply to Central Europe, meaning that the project was important for the whole of Europe.
Dacic reminded that the cost of the construction works for the Serbian section of the South Stream gas pipeline amounted to over EUR 2 B, while Serbia was expected to receive hundreds of millions of euro a year from transit fees.
Commenting on the dispute over the compatibility of the South Stream gas pipeline with the EU’s Third Energy Package, Dacic insisted that the EU had to treat all projects equally and refrain from applying double standards.
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