Hungary’s High-Stakes Gamble in Russia’s War

“There is war and devastation for a year. Europe’s economy suffers for a year. We are paying the price of this war, for a year. But Brussels has no plan for peace. It’s not sanctions but peace talks that will bring an end to this war!” This quotation is from one of the Hungarian government’s “public information” campaigns that echoed across the country on the first anniversary of Russia’s war against Ukraine: February 24, 2023. It’s a masterpiece of 21st century illiberal propaganda: it sounds rational, but it’s a lie. It’s not Hungarians that are suffering terribly from the war, but rather Ukrainians, who are fighting for their independence against an aggressor. 

The government of Hungary’s prime minister, Viktor Orbán, is an outlier in the EU when it calls for “peace.” Orbán knows well that Europe has next to no influence over Russia. His proposal, thus, suggests that the European Union should push Ukraine to the negotiating table, and that Kyiv should comply, regardless of Russia’s willingness to compromise.  

 What drives Orbán’s pro-Russia view? Orbán’s Russia-friendliness is relatively new. “Oil might come from the east, but freedom always comes from the West,” Orbán said in 2007. In 2008 when Russia attacked Georgia, he strongly condemned Russia and reminded Hungarians of the moral obligation to stand by a country fighting for sovereignty. ”Let’s speak clearly,” he said, “military aggression is military aggression.”

The new paradigm: Eastern Opening 

Following the 2008 economic crisis, he concluded that the dominance of the West was on the decline. ”Now the star of the east is shining,” Orbán said. He started to court Russia, Turkey, and China to create extensive economic relations in order to position Hungary as the leading power of the new Central European core. Only two years after calling Russia an aggressor, he stated that the countries of Central Europe must learn how to tune in to Russia.

This tap-dance politics between western Europe and the east was a radical U-turn of Hungary’s twodecades of foreign policy, which saw the country’s sovereignty and development guaranteed in the transatlantic Western alliance. The post-crisis international turmoil offered Orbán ample room for manouvering. Instead of multinational organisations, he focused on bilateral relations to maximize opportunities from western alliances and Eastern relations alike.

Turning towards Russia was the centrepiece of Orban’s so-called Eastern Opening. In 2010-2014, Orbán’s government nationalized several foreign-owned energy companies and reprivatized them to business actors close to the government. This way Orbán gained control over energy-source commerce involving Russia and negotiated new deals involving its own political interests in Russia. In 2014 Orbán made a secret agreement with Russia to build a nuclear plant using a Russian loan, creating further financial dependencies. Hungary intensified its cooperation to build a new gas pipeline to circumvent Ukraine: TurkStream opened in 2021. The same year, Hungary made a new 15-year gas deal with Russia. The government joined the controversial, Russia-based International Investment Bank, which put its headquarters in Budapest. The bank received diplomatic status, and thus generated worries about national security. By 2021, Hungary was more dependent on Russia than any time since the 1990-es.  

Since 2010, Orbán met with Putin eleven times. The cordial relationship between the Hungarian and Russian governments became a sensitive topic after 2014 when Russia annexed the Crimean Peninsula in Ukraine, and Russian troops entered eastern Ukraine. Orbán tried to strike a balance. As a gesture to the Russians, he protested noisily against European sanctions against the country, but in the European Council he repeatedly voted for them. Hungary also confronted Ukraine, claiming that the Ukrainian minority language law curtailed rights of the hundred thousand ethnic Hungarian population living in Ukraine.  

Over the years, as Orbán diverted ever more often from the EU’s path, he faced criticism in Europe and the US alike. But Orbán believes that conflict is a natural feature of international relations. Along with the other countries in Central Europe, Hungary’s economy grew significantly in the 2010s. State investments financed from EU transfers and FDI flowing to the region resulted in 4 to 5 percent growth, and Central Europe was catching up to the EU average. Orbán’s government served multinational companies with hefty state subsidies to have them settle in the country and bought significant military equipment from Western European partners to lubricate business relations. Hungary complied with all the NATO responsibilities, and in important issues the government voted together with other EU and NATO leaders. Despite Orbán’s untransparent Eastern Opening’ and autocratic politicsin Hungary, these steps helped him to remain acceptable to Western partners.

Finally, when in 2021 Orbán threatened to veto the EU budget and the Covid-19-related resilience and reconstruction fund, even his closest allies, like the German Christian democrats (CDU), broke ties with him. Over time, trust evaporated and it became clear that Orbán’s Eastern Opening could work only at the expense of the Western alliance.  

War against Ukraine 

Russia’s war against Ukraine changed everything. European countries realised that a revisionist Russia poses a permanent security risk for the continent. In February 2022, Orbán had two choices: to walk a middle course between east and West or join the Western bloc. 

In March 2022, there was a high-stakes election campaign in Hungary, and the war created high-risk momentum for Orbán’s party.  Its main concern was how to stop the pro-Ukrainian opposition. To win uncertain voters, the communication machinery of Orban’s party quickly produced a narrative: “We should stay out of this war,” and accused the opposition of wanting “to mix Hungary up in the war.” This tactic proved highly successful and Fidesz won the elections, for the fourth time since 2010.  

Orbán believed he was strong enough to continue his tap-dance between Moscow and the Western alliance. But he had other concerns as well. First, the growing energy prices blasted a huge hole in Hungary’s budget in 2022. The extensive dependency on Russian energy sources made the Hungarian government desperate to acquire gas for a reasonable price for the winter. Orbán sent his foreign minister Péter Szíjjártó to meet his Russian counterpart Lavrov in July 2022 to negotiate concessions. Second, Orbán’s state-sponsored political and economic circles had vested interest in giant state investments implemented together with Russian state companies. Worsening relations with Russia threatened to block the lucrative gas trade business, railway constructions, and multi-billion-euro nuclear power development. Third, after the Hungarian elections the EU launched the rule of law conditionality procedure against Hungary. The European Commission required significant anti-corruption legislation and the restoration of the independency of the judiciary as a condition to grant €7.5 billion in post-Covid recovery funds to Hungary. For the government, which navigated the country into over 20 percent inflation, these funds were critical for the financing of the state.  

Orbán prepared for tough negotiations with the EU. In December 2022, the Hungarian government was ready to threaten to veto the €18 billion aid package to Ukraine in order to keep the European Council under pressure. Orbán’s “non-aligned” position in the war was operationalized as a tool to access EU financial transfers.  

Orbán's opportunistic political calculations

Orbán has other opportunist political calculations as well. He is aware that supporting Ukraine has very high price for the EU and its people. He knows that there are political parties in Europe which, though not in power, share his views and could win elections with the “peace narrative.” He calculates that diverging strategic and economic interests among EU member states, or the possible election of a Trumpist president in the US in 2024, may change the course, and support for Ukraine could dry up. Orbán is taking huge risks hoping that once the war ends his “sensible peace politics” will reward him. During the migration crisis in 2015, a similar radical strategy catapulted him to the position of one of the most influential leaders in Europe.   

In a recent speech, Orban expressed his will to make Hungary a middle-size European power. This, he said, is only possible if Hungary maintains a manoeuvring position between the Western alliances and the eastern partners. He rejects the recreation of geopolitical blocs because he worries that it boxes out countries on the periphery.  

Orbán is not pro-Putin. Orbán is pro-Orbán.  Hungary has no influence on the outcome of this war. His words will not be listened to at any future negotiating table. But as in every crisis, he sees an opportunity to take advantage of it. Ironically, with Russia’s war Central Europe is emerging as a new focus for Europe as Orbán had long hoped. But will Orbán’s Hungary have any power in this new core of Europe, or has he played all of his cards, most probably turning Hungary into an isolated bubble between east and west?