Brussels Playbook: Orbán under fire — Energy deal
fudge — MBS reputation rehab
BY SUZANNE
LYNCH AND JAKOB HANKE VELA
July 27,
2022 7:15 am
POLITICO
Brussels Playbook
By SUZANNE
LYNCH and JAKOB HANKE VELA
with ZOYA
SHEFTALOVICH
DRIVING THE DAY: ORBÁN’S NEW LOW
HAS VIKTOR
ORBÁN FINALLY GONE TOO FAR? That’s the question doing the rounds this morning
as criticism continues to pour in over the Hungarian leader’s latest tirade —
this time his claim that Hungary should not become a “mixed race” country.
A step too
far: Even his most loyal advisers seem to have had enough. On Tuesday, Zsuzsa
Hegedüs, a long-standing aide, quit — delivering a scorching repudiation of her
long-time boss, comparing him to a Nazi. “I don’t know how you didn’t notice
that your speech you delivered is a purely Nazi diatribe worthy of Joseph
Goebbels,” Hegedüs said in her resignation letter, a reference to Adolf
Hitler’s propagandist-in-chief.
Public
fight: Within hours, Orbán had published his own letter, claiming to have “a
zero-tolerance policy” toward anti-Semitism and racism, as POLITICO’s Lili
Bayer reports. Hegedüs shot back with a second letter, invoking her parent’s
experiences as Hungarian Holocaust survivors. Others died, she said, because
too many people stayed silent when hate first emerged.
Nazi
reference: The criticism of Orbán’s explosive speech didn’t just stop there.
The head of the Federation of Hungarian Jewish Communities said it “goes
against the practice that gave security to the Jewish communities,” and called
for a meeting with the Hungarian leader.
Bad form:
This isn’t the first time Orbán and his Fidesz party have been linked with
anti-Semitism. The party’s obsessive vendetta against Hungarian-born George
Soros, the pro-democracy philanthropist, has propagated what many see as
anti-Semitic tropes.
Not amused:
Romania, where Orbán delivered the speech on Saturday, has also reacted with
fury, with Foreign Minister Bogdan Aurescu describing the comments as
“unacceptable.” Luxembourg’s Foreign Affairs Minister Jean Asselborn told
POLITICO that Orbán has “committed a breach of civilization by identifying
himself with the ideology of white supremacists.”
Recap: In
case you missed it, here’s what Orbán — one of the EU’s longest-serving leaders
and a fully fledged member of the European Council — said. Arguing that Europeans
mixing with non-Europeans created “mixed race” people, he said: “We are willing
to mix with one another, but we do not want to become peoples of mixed race,”
adding that countries where this happened were “no longer nations.”
Quelle
surprise: When asked by reporters for a response to Orbán’s comments, a
European Commission spokesman said Monday: “We never comment on what European
politicians say,” instead pointing to the values the EU lists in its founding
treaties, including the right not to be discriminated against based on racial
or ethnic origin. The Commission’s side-stepping of the issue is no surprise,
given the EU has turned a blind eye to Orbán’s antics for years.
Getting
bolder: Indeed, in a sign of how emboldened his government has become since
Orbán’s decisive election victory in April, Hungary was — again — the only
country to oppose the gas deal agreed at Tuesday’s Energy Council (more on that
below). It is the latest effort by Budapest to block EU decision-making, having
held up the sixth Russian sanctions package and thrown a last-minute spanner in
the works in negotiations on the minimum corporate tax package.
Leverage:
The EU’s reluctance to take on Orbán is all the more puzzling given it has
significant leverage over Budapest. With Brussels having withheld billions in
pandemic recovery money, Hungary is said to be nearing an agreement to unlock
the funds by addressing rule-of-law concerns. Faced with a weakening currency
and protests over cost-of-living issues, Hungary needs that cash more than
ever.
BRACING FOR
VIKTOR: After his Romanian firestorm, the Hungarian PM is bringing his brand of
European right-wing populism to the U.S., where he is due to address the
Conservative Political Action Conference (CPAC) in Texas early next month.
Orbán is due to take the stage at the Republican event, a mainstay of the U.S.
Conservative calendar, along with former President Donald Trump, the event’s
star attraction.
NOW READ
THIS — TEEN TERROR NETWORK: Orbán’s speech comes at a time when anti-Semitism
and neo-Nazism have been resurgent around Europe and in the U.S. In a must-read
out this morning, POLITICO, Welt am Sonntag and Insider reveal that a network
of young neo-Nazis is setting up terrorist cells for the purpose of carrying
out armed attacks. The “Death Weapons” joint investigation, featuring reporting
from Berlin, Brussels, Las Vegas, Munich, New York, Potsdam and Washington,
takes you inside the network.
GAS WOES
EU’S GAS
DEAL FAILS TO CALM MARKETS: If you listened to Europe’s energy ministers as
they exited Tuesday’s emergency summit on EU-wide measures to cut gas use,
you’d have thought they were about to break into “Ode to Joy.”
Sample of
the reactions: German Economy Minister Robert Habeck said, “We oppose Putin’s
attempt to unsettle us with European solidarity and unity. This is of enormous
importance.” Spain’s Minister for the Ecological Transition Teresa Ribera, who
had fought against an original proposal that would have seen mandatory cuts for
all EU countries — largely to bail out Germany — was also laying it on thick:
“We have taken a spectacular step forward which allows us to build on the
European project.”
Markets not
impressed: But if EU ministers were hoping to pull the brake on soaring gas
prices by signaling the 15 percent demand cut, markets didn’t seem to buy it.
Gas prices on Tuesday climbed past the €200 per MWH mark, and continued soaring
in the evening, reaching a record €214 for August futures and €217 for November
futures — almost 10 times more than a year ago.
What’s the
deal? As our colleagues Karl Mathiesen and America Hernandez report, EU
countries vowed to voluntarily cut their gas demand by at least 15 percent
across the next eight months. But compared to the original proposal, ministers
took the power to impose mandatory cuts in an emergency away from the
Commission. Instead, the Council will have to declare an emergency with a
majority vote to trigger mandatory cuts.
Usine a
gaz: Multiple derogations for countries with limited or no connection to the
European gas grid also poked multiple holes in the final savings — making the
entire system complex and sowing doubts about whether it will work — what the
French call “usine a gaz” — or gas works.
Numbers
don’t lie: The deal struck in Brussels may not even be enough for the
Commission to reach its own projected aim of reducing gas by 43 billion cubic
meters, officials said. In fact, accounting for all the loopholes, Tuesday’s
deal yields a gas savings target closer to 10 percent, rather than the original
15 percent. America has the full story.
Start
saving now: Whether it was a win or a defeat for Europe, the hard work of
actually cutting gas use is still to come. That was the message from Commission
Executive Vice President Frans Timmermans on Tuesday. “Gas savings should start
tomorrow,” he urged.
Third way:
Meanwhile, in a letter to Commission chief Ursula von der Leyen, Greek Prime
Minister Kyriakos Mitsotakis proposed an EU-wide mechanism to compensate
industrial users for reducing their gas and electricity use for the coming
winter, arguing the idea “mixes economic and energy efficiency with European
solidarity.”
Incentivizing
instead of penalizing: Mitsotakis says a scheme to use EU money to subsidize
gas reductions “presents a midpoint between the voluntary demand reductions
that we must all identify, and the mandatory reductions that might come in an
emergency. By offering financial incentives, rather than relying on the penalty
of interruptions during an emergency, the proposal is more likely to unlock a
firm and sizable response from industry.”
Building it
up: The Greek premier says this new mechanism would build on already existing
schemes that incentivize short-term consumption cuts, which are used to
stabilize grids. This larger scheme would incentivize longer-term reductions of
several months rather than hours or days. “Ideally, we would blend national and
European resources, demonstrating solidarity and allowing funds to flow to
those most capable of reducing their consumption,” he says.
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UKRAINE LATEST
BLACK SEA
UPDATE: Turkey will hold a ceremony to mark the opening of a new joint
coordination center in Istanbul today — a key strand of the U.N.-brokered grain
deal signed by Russia and Ukraine last Friday. But once again the deal is in
doubt after Kyiv accused Russia of launching more massive missile strikes on the
Black Sea coast.
Questions
remain: Even apart from the volatile situation on the ground, obstacles to the
deal remain, including the issue of insurance, as companies look for more
assurances before they agree to indemnify vessels that will need to navigate
mined waters.
Putin’s
visitors: Turkish President Recep Tayyip Erdoğan confirmed that he will meet
Russian leader Vladimir Putin in Sochi on August 5. But the Russian president
may see a friendly face before then: Former German Chancellor Gerhard Schröder
is reportedly in Moscow.
Who needs
the Riviera? While most Europeans head to the coast for the summer break, or
even some hill walking in the Alps, the 78-year-old former chancellor has
packed his bags and headed to that well-known summer holiday destination —
Moscow.
When asked
if he would meet Putin … German broadcaster RTL quoted Schröder, who was
instrumental in forging the gas inter-relationship between Germany and Russia,
as saying: “I’m on holiday here for a few days. Moscow is a beautiful city.”
RUSSIA’S
ECONOMIC RESILIENCE: In news that will dismay many in Brussels, data published
by Russian daily Vedomosti indicates that while Western sanctions are hurting
Russia’s economy, the Kremlin’s war chest is still brimming with cash thanks to
soaring commodity prices. POLITICO’s Victor Jack and Sarah Anne Aarup have the
details.
Right on
cue: The IMF also said Tuesday that Russia’s economy was holding up much better
than expected, despite sanctions. In its World Economic Outlook, the IMF
upgraded Russia’s GDP estimate by 2.5 percent (though it still expects its
economy to contract by 6 percent), mainly due to high oil prices.
Miscalculation:
Conversely, Europe is doing worse that expected, with the IMF downgrading its
growth forecast for the eurozone to 2.6 percent from 2.9 percent. So much for
the EU’s mantra over the past few months as it refined its sanctions packages —
that they must hurt Russia more than the EU. POLITICO’s Paola Tamma has more
here.
SHIPS IN
THE NIGHT: Meanwhile, as Russian Foreign Minister Sergey Lavrov continued his
visit to Africa, French President Emmanuel Macron was also in the neighborhood,
visiting Cameroon, Benin and Guinea-Bissau.
Info wars:
Speaking in Yaoundé, Cameroon, Macron admitted that Russian propaganda’s sway
was a worry. “This hybrid Russian presence — which involves disinformation,
militias and … complicity with weakened political powers or even totally
illegitimate ones when they are military juntas — is a concern,” he said. As
POLITICO reported this week, the European Union is struggling to counter the
impact of Russia’s disinformation in Africa, particularly when it comes to
Russia’s war in Ukraine.
Wagner
still active: Meanwhile, the top U.S. general overseeing operations in Africa
said Tuesday that Russian mercenary group Wagner still has a big footprint in
the continent, despite the Kremlin pulling some mercenaries out to fight in
Ukraine. Outgoing Africa Command leader Gen. Stephen Townsend said the group is
“doing President Putin’s bidding” in Libya, Mali and the Central African
Republic, our U.S. colleagues report.
MBS REPUTATION REHAB
WILL MACRON
HOST MBS? Speaking of meetings with accused murderers: Emmanuel Macron will
host Saudi Crown Prince Mohammed Bin Salman in the Elysée Palace — according to
Saudi state media. The Saudi Royal Court said in a statement that MBS would
meet the leaders of Greece and France in a trip to both countries, starting
with a visit to Athens on Tuesday.
Presidential
silence: The Elysée has neither confirmed nor denied the meeting in Paris,
despite repeated questions on Tuesday evening by news agencies and press,
including POLITICO.
Don’t
forget Khashoggi: Most Western leaders have shied away from meeting MBS, who
stands accused of having ordered the brutal assassination of journalist Jamal
Khashoggi in 2018. But Macron visited him last December; then U.S. President
Joe Biden traveled to Jeddah and gave him a fist bump earlier this month. It’s
part of efforts led by the U.S. to convince Saudi Arabia to increase oil
production to fight inflation.
Will Macron
mention Khashoggi? Biden said he told MBS during their face-to-face meeting
that he held him personally responsible for the assassination — a bar Macron
will be measured against.
All about
the cheap hydrogen: Meanwhile, Greece and Saudi Arabia will sign an agreement
on renewable energy today. “We can provide Greece and Southwest Europe through
Greece with much cheaper renewable energy,” the Saudi leader said on Tuesday,
sitting alongside the Greek PM. MBS added that the two countries were working
on a project that would make “Greece a hub for Europe in terms of hydrogen.”
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