Hungary strikes nuclear pact with Iran

Hungary strikes nuclear pact with Iran
Russia has pledged it will follow through on a deal to build and fund the expansion of the Paks nuclear plant.
By Tim Gosling in Budapest February 22, 2016

Hungary has agreed to develop nuclear cooperation with Iran, Foreign Minister Peter Szijjarto said on February 19 after meeting with Ali Akbar Salehi, Tehran's top nuclear official.

The announcement is part of ongoing efforts by Budapest and Tehran to move towards closer cooperation. It also marks Hungary out yet again as an EU maverick, and will raise more suspicion in Brussels and Washington.

Hungary backs efforts to push the EU to help in the training of Iranian nuclear experts, Szijjarto said, according to MTI, while a training scheme for Iranian nuclear experts in Hungary, under the supervision of the International Atomic Energy Agency, is being expanded. Scientific research cooperation will also be developed on the peaceful uses of nuclear energy.

At the same time, talks will be started on the participation of Hungarian companies in the extraction of Iran’s hydrocarbon resources, the foreign minister added. That will inevitably prick up ears at Mol. The oil and gas giant - in which the state holds around 25% - has been pushing to expand its upstream holdings in recent years.

However, the Hungarian side did not appear too keen on a scheme announced by Salehi the previous day that would see the pair design and develop a small nuclear reactor to be produce in the Islamic republic and to be sold across Asia and Africa. Szijjarto made no mention of the proposal.

The deal comes as Iran emerges from isolation after US-led sanctions were lifted. A deal reached last year will allow Iran to inspect its own nuclear facilities, which have been a cause of concern for years. The West suspects Tehran has been using its civil nuclear programme to work on the production of weapon-grade uranium.

Meanwhile, Hungary's Fidesz government has been pushing to deepen ties with countries to the east since it came to power in 2010, noting that Hungary's heavy dependence on exports to the Eurozone is a risk. Prime Minister Viktor Orban visited Tehran late last year.

However, that push has proved a struggle. Efforts to woo China have led to few tangible results, while Budapest's continued approaches to Moscow, despite the chill in relations with the West, have earned it suspicion and chastisement from Brussels and Washington. Orban agreed with President Putin on February 17 to try to boost bilateral trade, while the pair admitted it has dipped significantly.

Orban did, however, secure a pledge from Putin that Russia will follow through on a deal to build and fund the expansion of the Paks nuclear plant. That's despite Moscow's deepening fiscal problems.

While the Russian budget is under pressure due to sanctions and the collapsed oil price, nuclear technology is strategically important for the Kremlin. Despite recent efforts to wean the economy off its huge dependence on hydrocarbon exports, aside from arms, nuclear is Russia's only significant added value export. 

Building a new facility inside the EU would clearly be good PR for the product, while offering the added bonus of annoying the West and handing Moscow further leverage over energy supply. Russia is also keen to support ally Iran's re-emergence. The construction of two more units of the Bushehr nuclear power plant are due to start in the nearest future, the head of Russian state nuclear agency Rosatom announced on February 18.

For Hungary's part, linking up with Iran on nuclear power will only rattle more cages in the West. While Tehran is coming back in from the cold after agreeing a deal on its nuclear facilities last year, it continues to be viewed with suspicion in Washington. Alongside Russia, which remains under Western sanctions because of its annexation of Crimea and role in the war in eastern Ukraine, it is one of the main sponsors helping prop up the regime of Bashar al-Assad in Syria.

Moscow's military action in Syria is also seen as a tactical move to antagonize the migrant crisis tearing at EU unity. It is not the first time Orban has been accused of weakening the bloc.

Indeed, Hungary's foreign minister waxed lyrical about Iran's stability and the role it should play in resolving the conflict. The success of talks between Iran and the international community has significantly improved global security, and the agreement is also important for Europe, Szijjarto claimed. Iran belongs to a region of deepening conflicts, he added, arguing that rational cooperation between Tehran and the international community would lead to major steps forward for stability and security in the Middle East.