Hungary prepares to bypass EU ban on South Stream

By bne IntelliNews October 23, 2014

bne -


Hungary announced on October 22 that it is preparing legislation that would allow it to bypass EU oversight and start building its section of the South Stream gas pipeline. The move will only raise the tension in Budapest's strained relations with Brussels and Washington.

Antal Rogan, head of the ruling Fidesz party’s parliamentary group, told news portal that the economic affairs committee has proposed an amendment to legislation that would allow any company to build pipelines. Currently, only certified transmission system operators (TSO) can construct international routes. However, such companies are subject to international approvals because of the need to harmonise development plans.

"South Stream is going to be built, however, it would be important to enable as many firms as possible to compete for construction of its Hungarian segment," Rogan said in an emailed response to questions from Reuters. "That is because more companies are able to build pipelines than those that can operate pipelines."

The standoff between the West and Russia has provoked the EU to accelerate efforts to diversify away from Russian energy dependence. Brussels has ordered all work halted on South Stream, which is planned to bypass Ukraine's transit network to carry 63bn cubic metres of gas under the Black Sea and on to an Austrian hub. 


The Hungarian move appears purposefully designed to provoke the EU and US, which have recently signalled their anger over Hungary's stance on the Ukraine crisis. After Prime Minister Viktor Orban met Gazprom CEO Alexei Miller on September 22, Hungary promptly halted reverse gas supplies to Ukraine, which is struggling to agree a deal with the Russian state giant following a cut-off in June. Meanwhile, Gazprom agreed to raise supplies to Hungarian storage facilities. 

With winter approaching, Russia has sought to raise the stakes, limiting gas deliveries to Central European states feeding Ukraine and warning that reverse flows go against bilateral contracts. Slovakia, which needed several pushes  before it agreed to help Kyiv, has maintained reverse flows even as its own deliveries from Gazprom have been cut by 50%.

There are some signs that Western countries are finally losing patience with Orban’s increasingly authoritarian rule. A scandal erupted in Hungary in mid-October when Washington announced it had banned six government officials from entering the US because of corruption concerns. It is the only reported instance of a travel ban placed on a Nato ally.

Meanwhile, EU officials and parliamentarians have raised discussion over the state of democracy in Hungary under Orban, and the country's candidate to the new European Commission was rejected earlier this month because of  concern over his role in introducing controversial changes to judicial, media and human rights legislation.

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.