bne IntelliNews -

Chancellor Angela Merkel attempted to shore up Hungary's wavering support for the European Union's stance towards Russia during a half-day visit to Budapest on February 2, but also criticised Prime Minister Viktor Orban's increasingly authoritarian rule. 

Facing the media after more than an hour of talks, both leaders firmly ruled out supporting any military solution to the conflict raging in the more distant regions of Hungary's eastern neighbour. "Germany does not support a military solution, it is not possible," Merkel answered in response to a journalist's question. Orban's response was a curt "No!"

Speaking of the conflict in Ukraine, he stressed that "200,000 [ethnic] Hungarians" live in the country, and Hungary was dependent on the gas transmission pipelines across its territory.

"Both homes and industry are dependent on gas: our reliance in this respect is much greater than that of Germany, ... and our gas supply contract expires this year. This is the biggest problem of the year, and must be solved, or households and industry won't function," Orban said. The Hungarian premier has been lukewarm in his backing for sanctions on Russia and has strengthened his country's energy dependence on Russia. 

The chancellor noted that Germany itself relied on Russia for 30% of its gas, but she welcomed and supported Hungary's need to diversify supplies, while stressing the importance of Hungary's reverse gas flow facility to supply gas to Ukraine.

Flanked by tricolours of their respective nations - EU flags were noticeably absent - Orban welcomed "not just the German, but a European leader", insisting that Hungary had "finished its homework set in 2010" by setting its economy to rights, and was grateful for the considerable help from German investment on the way.

"Some 6,000 German companies provide 300,000 workplaces directly in Hungary," while hitting a 22-year record in terms of employment, Orban said.

Merkel, after praising Hungary for its "milestone" role in opening its borders in 1989, along with its economic progress, emphasised the need for predictable conditions for investment, in a clear reference to Orban's populist measures against foreign banks,  utilities, telecoms and retailers. She underlined  that "loyal investors" were the result of a "stable and predictable" environment.

Most controversially, she strongly hinted that all was not well with democracy, the role of civil society  and the rule of law in Hungary, clearly pointing to concerns about Orban's governance since taking power in elections in 2010. Merkel's CDU is joined with Orban's Fidesz in the European People's Party in the European Parliament, and has been conspicuously silent on this issue up to now.

"Even with as large a majority as the Hungarian prime minister has, it is important to see the role of the opposition, civil society and media. This is [the case] in Germany, and Hungary should follow this kind of model," she said.

Responding to a question on the meaning of "illiberal democracy", a phrase used by Orban, Merkel said she was flummoxed that the two words went together, and appeared shocked at Orban's retort that "not every democracy is liberal".

Merkel said democracy, and her CDU party was based on liberalism. Germany and her party, the CDU  "have three roots: Christianity, social-liberalism and conservativism. This is what makes us a people's party," she said.

To this, Orban responded with: "The Hungarian point of view, my point of view, and I always hold to this, is that not every democracy is necessarily liberal. If somebody wants to say that democracy has to be liberal, then he is demanding a privilege for a certain ideology, which we cannot give," he said.

As the website index.hu commented, Merkel's face in reaction to that comment probably meant it was a good idea to end the press conference at that point.

While the government side played down the rift, stressing the successes of  German-Hungarian cooperation, opposition politicans pointed to the differences as evidence that Germany, like the United States, had deep concerns about the state of Hungary's democracy under Orban.

Jozsef Tobias, the Socialist party president, said in a statement that Merkel and Hungary's leftwing had "identical opinions" on democracy, while Orban had again rejected a social system built on basic human rights.

Orban should take note of Merkel, said Bernadett Szel, of the green LMP, because his take on "illiberal democracy" was not universally accepted.

But Peter Kreko, an analyst with Political Capital, a Budapest think tank, played down concerns about Hungary's internal political problems, saying the primary reason for the visit was the need for a common stance on Russia and its aggression in Ukraine.

"It was a pretty tense press conference, especially at the end, with quite some disagreement, .. but 
the most important point for her visit is the Russian-Ukrainian situation, and Merkel is trying to guarantee that no member state will veto a decision on the sanctions in the future," Kreko told bne IntelliNews.

He said it was certain that issues with German companies hit by Orban's erratic legislative decisions - including the heavy taxes levied on companies in energy, telecoms and media - "were on the table, behind closed doors", during the discussions, but "by far" the most important issue was how to deal with Russia.

"Merkel wants Orban to present the minimum needed, and this is not to break the consensus [in the European Union," Kreko said.