Trump sanctions Orbán’s TurkStream gas pipeline dream

Zsolt Németh, Fidesz chairman of the parliamentary committee on foreign affairs claims that there is a “spectacular breakthrough” in US-Hungary relations.  The State Department does not back his statements, in fact, relations seem to have hit another low.   For the first time in fifty years Hungarian companies might be sanctioned by the US law.  One candidate is Eximbank (Hungarian Export-Import Bank Plc.) which provides pipeline financing.  (Read more about Németh and the “spectacular breakthrough”)

Just before Christmas, President Donald Trump signed a law that will impose sanctions on any firm that helps Russia’s state-owned gas company, Gazprom. The sanctions target companies involved in the building of the Nord Stream 2 and TurkStream pipelines that will allow Russia to increase gas exports to the EU. The US considers these projects a security risk.  Both Russia and the EU (including Hungary) have condemned the sanctions.

Congress approved the measures as part of a defense bill since Russia is using gas supplies as a strategic weapon.  Both pipelines bypass Ukraine to deprive that country from badly needed transit revenues. Previous US administrations consistently opposed these transit routes; Presidents Obama and George W. Bush considered the pipelines “tools of coercion” to weaken the EU’s energy security.

Alexey Miller, Gazprom Chairman (left) and Prime Minister Viktor Orbán – close ties.

Brian Whitmore from the Center for European Policy Analysis (CEPA) considers the pipelines “the greatest threats to European security and transatlantic solidarity. It flouts EU laws and regulations—and gets away with it. It’s a guided weapon masquerading as a commercial project.”

Russian Foreign Minister Sergei Lavrov immediately struck a defiant tone, saying the Nord Stream 2 and TurkStream gas pipeline projects will be launched despite U.S. sanctions.  Turkish President Tayyip Erdogan went one step further and said that Ankara would retaliate against the sanctions.  Congress already imposed restrictions on Turkey over its purchase of S-400 defense systems from Russia.

Hungary’s Prime Minister Viktor Orbán is fully behind TurkStream, Foreign Minister Szijjártó reiterated that the project should be completed as soon as possible because Hungary relies on Russian gas and will import 9.8 billion cubic meter gas via the pipeline starting in 2021.

Orbán’s pro-Putin, pro-Erdogan and anti-Ukrainian policies are poisoning US-Hungary relations and Budapest is still paying lip-service for the international calls of energy diversification.  Hungary has also started to exhibit an increasingly anti-American foreign policy attitude.

Nothing good will come out of this, I have a feeling that 2020 will be a bumpy ride in US-Hungary relations.

György Lázár

12 Comments

  1. The American Deep State has gone completely insane. Turk-Stream and Nord-Stream will both be built in spite of American meddling. America’s Hubris is disgraceful.

  2. Nicholas Molnar says:

    Mr. Lazar never managed to write a friendly or approving comment about Hungary and especially the Orban regime

  3. György Lázár says:

    Dear Mr. Molnár,

    Journalistic objectivity is my goal. I write about facts in a nonpartisan way. I encourage you to submit “a friendly or approving comment” about the Orbán regime and I’m sure that the Editor will consider it as an opinion piece.

  4. Hello Mr. Molnar,
    What is there to “approve” about the Orban regime?
    Please list!

    • I can provide a list karl!

      2010, 3.6 million people employed in primary labor market, now 4.3 million.

      One of the fastest-growing economies in the EU since 2013.

      Wage growth one of the fastest as well.

      Debt/GDP set to reach around 66% this year, it was 82% back in 2010.

      R&D spending has been increasing at over 20%/year rate in the past few years.

      FX debt at consumer and government levels have been greatly reduced, making Hungary far less vulnerable to financial crisis.

      Hungary capital is on the rise, with purchases of foreign assets lately, as well as deals, such as the 1,300 railcar deal for Eqypt, won by a Hungarian-Russian consortium.

      Made the right call on the migrant crisis, while most EU leaders made wrong call and were left to scramble to fall in line with what Orban insisted needed to happen all along, namely secure the EU borders.

      Stands up against the abuse of the ethnic Hungarian minority in Ukraine.

      Fertility rate up from 1.24 in 2010-2011, to 1.49 in the past few years.

      The list could go on. Certainly much better leadership than the 2002-2010 fiasco, where Hungary was left to choke on piles of debt at government and consumer levels, with much of it being toxic FX debt. It led to hundreds of thousands of desperate people emigrating, for lack of prospects in Hungary for years to come. Emigration flow that was only stopped in the past few years as the economy recovered. There were voices suggesting that Hungary might never recover again, including on Bloomberg and so on. It was thought that Hungary will become another Argentina, in almost perpetual financial crisis for decades to come. Yet, here it is, recovered and thriving. But according to the likes of you, Hungary would be better served by returning to the leadership that nearly brought its destruction.

  5. “Orbán’s pro-Putin, pro-Erdogan and anti-Ukrainian policies are poisoning US-Hungary relations”

    Wow! According to EU, it is this unfriendly, cynical and arrogant US move that is poisoning EU-US relations.

    https://www.rferl.org/a/european-commission-president-criticizes-u-s-sanctions-on-nord-stream/30347898.html

    Orban is acting in the interests of Hungary here. Ukraine is not a reliable transit country. Germany, Netherlands, Austria and others don’t want to be reliant on it either, which is why they are behind Nord Stream 2. Twice gas flow was stopped because they were refusing to pay for the gas they were using, and simply stealing it from the pipeline. With this deal, Hungary is not only enhancing its energy security, it is also going to profit from gas transit fees.

    The US is pursuing its interests as well, but in a very cynical fashion, which amounts to economic war against the EU, which is supposed to be an ally. It wants to sell more expensive LNG to the EU, which few EU customers are eager to buy. Both Nord Stream 2 and Turkstream will be finished. The offshore section of Turkstream is already finished Not sure how sanctions would affect Hungarian business, because the sanctions only target the building of the offshore section of these pipelines, which as far as I know Hungary has no involvement in it.

    Once more this particular author engages in a weird twisting of facts, in order to arrive to an equally twisted conclusion.

  6. Andrew Gollner says:

    @Joe (a.k.a. Zoltán Kovács’s troll farm manager)

    You remind me of those high spirited Yankee carpetbaggers during the so called “roaring twenties” in America, just before the worst economic collapse set in in 1929 and shook the entire world to its foundations. Hungary is as fragile, and close to the brink as a consequence of its crooked robber baron autocrat’s dim witted political economic policies as the US is under that artificial blond bomber in the White House.

    Trollster ! You and your master will be chased from your truth defying thrones by the people with pitchforks. Can’t hear hear the street people talkin’ ? It’s not going to be a pretty sight.

    • Sorry Gollner, but down here on the troll farm, we need things to actually make sense factually speaking. You are asserting that Hungary is like US before 1929. But 1929 was the result of financial excess. Hungary’s government debt/gdp declined, from 82% in 2010, to about 66% as of the end of 2019. Consumer debt/gdp declined from over 40% in 2010, to just 17.5% currently. Not to mention that most of the toxic FX debt was flushed out of the system. It is more like the 2002-2010 period was like the roaring 20’s in Hungary. That was when the financial excess occurred, almost drowning Hungary’s economy.

      In Canada by comparison, Government debt/gdp increased from 81% in 2010, to 90% in 2018. Consumer debt/gdp went from 92% in 2010, to over 102% in the same period. It seems to me it is Canadians who are drowning in debt, not Hungarians. You might want to re-consider that roaring 20’s analogy, and readjust the location where it best fits, based on the facts, not on ideological wishful thinking.

  7. Andrew Gollner says:

    @ Mr Lázár:

    The only problem I have with this otherwise fine piece is that it assumes American foreign policy is on a rational path under Donald Trump and reflcet’s American national interests. Nothing could be further from the truth.

    Trump is in bed with the entire criminal class in the world, especially the one that rules Hungary, Turkey and Russia, and the head of the State Department is his best cover. His good buddy Cornstein in Budapest is his back-channel to the thieves he trades favour with in the East, and Orbán’s “girl friday”, Réka Szemerkényi is in charge of CEPA after replacing Wes Mitchell at Orbán’s and Trump’s request. The foxes are in among the chickens.

  8. György Lázár says:

    Dear Joe, The US is pursuing energy diversification and does not necessarily wants to sell LNG to the EU… The US has never objected Qatar or Oman selling significant amounts of LNG in Europe, which is happening right now. Previous US administrations had the same policy… they just wanted less reliance on Russian gas.

    • And what business do they have dictating to EU countries where they should get their gas from?

      US does not object to LNG from other countries, because it is Cheaper Russian gas that is keeping all LNG sales to EU at minimal levels.

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