Hungary strikes raft of deals during visit of Russian foreign minister

By bne IntelliNews May 25, 2016

Hungary has announced it brokered several deals to "increase regional cooperation with Russia and incentivize investments by Hungarian businesses in the country," during the visit of Russian Foreign Minister Sergei Lavrov to Budapest on May 25.

Prime Minister Viktor Orban has repeatedly provoked criticism from Brussels and Washington over over his high profile meetings with Russian politicians, including President Putin, over the past couple of years. The Hungarian leader insists he owes no apology for striking deals on nuclear power and gas. that he says are in the interests of the country. The meeting with Lavrov and announced deals came as the EU prepares to extend sanctions against Moscow.

In step with the US, the EU imposed economic sanctions on Russia over its annexation of Crimea and support for separatists in eastern Ukraine. The issue is back on the table as the current sanctions are due to end in July. Hungary made clear in March that it objects the “automatic” extension of the sanctions.

Hungarian Foreign Minister Peter Szijjarto claimed, however, that "nobody should be worried about” Lavrov’s visit, as it serves Hungarian, Russian and also European interests. Szijjarto pointed out that Hungarian-Russian trade flows fell by 47% last year and has fallen by a further 25% this year. Hungarian businesses have suffered export losses of $4.5bn, he also complained.

“Hungary’s and Russia’s common goal is to slow and eventually stop the rate of reduction of bilateral trade flow,” Szijjarto said. 

The official announced Hungary has agreed four regional co-operation deals with Russia, but provided few details. He added that Hungary aims to provide incentives for investments by Hungarian companies in Russia.

A Hungarian meat processing plant will be opened near Moscow, financed by loans from Hungary’s Eximbank. Meanwhile, an unnamed Hungarian company will participate in the construction of one of the stadiums for the 2018 FIFA World Cup in Russia. Hungarian pharmaceuticals manufacturer Richter "is ready to begin a full production process in Russia," Szijjarto added.

On the same day, local press reported that the Russian minister of industry confirmed that Moscow is considering the establishment of a joint Hungarian-Russian airline. Hungary was reported in February to be in negotiations with Russian aircraft manufacturer Sukhoi over plans to launch a new national air carrier.

Related Articles

Explosion at Austrian gas hub interrupts supplies to Italy, Hungary and Slovenia

An explosion at the site of Austrian OMV’s Baumgarten natural gas hub has interrupted gas transit to Italy, Slovenia and Hungary, the Austrian government’s electricity and gas markets regulator ... more

Hungary planning to strike fair deal on INA, says Orban

Hungary is ready to strike a "fair deal to end the poisonous dispute" surrounding MOL and Croatian energy company INA, Hungarian PM Viktor Orban said after he met his Croatian counterpart Andrej ... more

Hungary gets ready for China-CEE “16+1” summit

The Hungarian government will join the China-Central and Eastern Europe Investment Cooperation Fund, a private equity fund organised by the Export-Import Bank of China, by investing €50mn, ... more