Hungary is interested in seeing a normalisation of Europe-Russia ties, Prime Minister Viktor Orbán said, meeting Russian President Vladimir Putin in Moscow.
At the talks held in Putin's residence, at which journalists were present in the first few minutes, Orbán thanked Putin for efforts which "in difficult times he has made in the interest of Russian-Hungarian friendship". "Perhaps it sounds immodest to say so, but we can say that what is good in our ties is something that we have achieved, and what is not good is not down to us," the Hungarian premier said.
Putin said he was "satisfied" with the quality of Hungary-Russia ties. He noted that bilateral trade between the two countries has declined. "We are satisfied despite the known problems and the drop in trade," Putin said. "Hungary is a very old and trusted partner of ours" he added. According to preliminary information released by the Kremlin, the possibility of strengthening bilateral cooperation will be discussed, including the further development of trade and economic ties, advancing joint projects in energy and high-tech, and cultural cooperation.
Long-term Russia-Hungary gas supply contracts have been extended to the end of 2019, Russian news agency TASS reported, citing documents prepared for Hungarian Prime Minister Viktor Orbán's meeting with Russian President Vladimir Putin. According to the documents, the volume of accumulated Russian investments in the Hungarian economy is USD 1.5 billion, the volume of Hungarian investments into the Russian economy is USD 2 billion.
The largest Hungarian investors in the Russian economy are OTP Bank, Gedeon Richter pharmaceutical company and oil and gas concern Mol.
By the end of 2015, the bilateral trade turnover decreased by 40% to USD 4.7 billion. Over the last two years the turnover decreased by almost 50%.
According to the documents, the parties are drawing up measures during the bilateral talks that would serve the maintenance and reinforcement of trade and economic relations in a period when the European Union is keeping sanctions in place against Russia, the forex markets and the world economy in general are volatile.
Orbán also said that during the course of the year European sanctions against Russia may not be automatically extended, and a discussion about these is necessary. In his view, the European Union needs to find ways for economic co-operation with Russia as soon as possible, otherwise it will fall behind in world economic competition. Growth in the EU is slow therefore the bloc cannot afford itself the luxury of not co-operation with everyone that could help its economy grow more dynamically.
The other important issue was the expansion of Hungary's Paks nuclear power plant, for which two new reactors are to be built by a Russian contractor from an EUR 10 billion Russian loan. Both parties underlined that their co-operation in this area did not change and Rosatom will continue the project despite international criticism. Putin stressed the project will contribute to Hungary's electricity independence.
As regards the Paks 2 project, Orbán noted that this is the agreement and business of the century. He stressed that the international dispute about the expansion project is unjustified because the two countries have been working together in this area since the 1960s and they have not done anything else but extending this co-operation.
We should thank Russia for being ready to do that, the PM said. Putin added that Russia is ready to fully deliver its commitments to expanding the Paks NPP.
Orbán said Hungarian-Russian relations are developing in the right direction, underlining that without effective economic co-operation the Hungarian industry would not be competitive.
"Russia is not an enemy but a partner for Hungary [and] both parties are interested in strengthening European security," Orbán said.
Hungary has not shown that it can recoup the costs of the Paks II investment, the Energiaklub climate policy institute said in its assessment of the project sent to the European Commission. Energiaklub said the state had failed to conduct a detailed study before taking the decision to expand the nuclear plant. Furthermore, it did not take into account risks and it considered no other alternatives, the institute added. The EC said last November that it had launched an in-depth investigation into Hungary's plan to provide financing for the upgrade of the Paks nuclear power plant. In the framework of the probe, interested third parties had until February 12, 2016 to send their comments on the planned investment to Brussels.
Energiaklub said that according to its calculations, the government would also have to finance the operation of the plant and not just the implementation of the investment itself. This is why, the institute said, it is important for the EC to investigate the investment, because the repayment of the loan from Russia alone would place considerable burdens on the taxpayer. If the EC were to find that the project involves government funding, it would have to determine whether that funding is in line with EU rules, Energiaklub noted. The institute said it believes that the government's planned financing of the upgrade is incompatible with EU laws.
Last Updated on Wednesday, 17 February 2016 21:18