Hungary seeks a multidimensional foreign policy

In the light of a weakening European Union and a less reliable NATO, Budapest is reassessing its position in Europe. A more centralised control of domestic politics and a more independent foreign policy are key parts of this strategy, writes Stratfor.


“Hungarian Prime Minister Viktor Orbán was one of the first European leaders to openly discuss the changes underway in the international system, contending that Central and Eastern European countries would have to redefine their foreign policies in accordance with those changes.


Orbán highlighted his prognosis at a meeting with Hungarian diplomats Tuesday, during which he warned of the dangers of Germany and Russia's rapprochement and defended the importance of greater political and economic cooperation with the United States.


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After the 1989 revolutions in Central and Eastern Europe, Budapest reoriented its foreign policy toward NATO, which it joined in 1999, and the European Union, which it joined in 2004. During those years, Hungary opened up its economy to foreign investment and forged close political, economic and military ties with the West. But things have since changed in Europe. The European Union is in the throes of a deep economic and political crisis, and its survival is in doubt. NATO is not the stalwart military and political alliance it was during the Cold War.


Orbán reacted to this new environment in two ways. Domestically, his Fidesz party used its absolute control of the Hungarian parliament to expand the economic and political influence of the central government. Budapest weakened the independence of the central bank and the Supreme Court, nationalised the pension system and applied special taxes to banks and telecommunications companies.


These domestic moves corresponded to Hungarian foreign policy. Orbán criticised the austerity measures advocated by Brussels and supported by Berlin while challenging the European Union's advancement on the sovereignty of its member states. The government alleges that the bloc will infringe on Hungarian sovereignty, and Budapest uses this threat to consolidate power at home.


In the light of a weakening European Union and a less reliable NATO, Budapest is reassessing its position in Europe. A more centralised control of domestic politics and a more independent foreign policy are key parts of this strategy, as is maintaining tense relations with Brussels without forcing a formal break. Neither Brussels nor Budapest is willing to cut ties. The European Union knows that losing a member would only worsen its political crisis, and Hungary depends on the export markets EU membership affords.


The second element of Orbán's strategy is to incorporate more players into the game, which involves pursuing a more multidimensional foreign policy. Between 2011 and 2013, Hungarian and Chinese officials held several meetings to enhance bilateral trade and technical cooperation. But while Hungarian exports to China have almost doubled in the past five years, China is only Hungary's fifteenth most important exports destination, and Chinese investment in Hungary is not arriving as fast as expected.


Hungary is also seeking to improve its relations with Russia and the United States. In late January, Orbán visited Moscow for the first time since 2009, and Russian President Vladimir Putin promised more Russian investment and cooperation with Hungary. Hungary depends on Russia for two-thirds of its natural gas; Russia also supplies oil and nuclear fuel to Hungarian power plants. The Hungarians have not forgotten that only 25 years ago they were dominated by the Soviet Union, but Moscow has three things Brussels does not: money, natural resources and a disinterest in whether or not its partners implement institutional reforms.


Hungary's relationship with the United States is equally complex. The United States was vital to Hungary's economic transition in the 1990s; the Americans lent money and provided technical assistance to promote the development of Hungary's private sector. Investment by American companies was also important in the privatisation process of state-owned companies.


However, as the United States preoccupied itself with the Middle East in the early 2000s (and then with East Asia), Central Europe ceased to be a priority for Washington. Since Orbán's rise to power, the United States has joined EU officials in in criticising the frailty of democratic institutions and the rule of law in Hungary. But Washington has done little else to show any significant interest toward the country.


In this context, Orbá's statements reveal a trend that could become more pronounced in Central and Eastern Europe. With a weakening European Union, alignment with Western Europe is no longer the default foreign policy choice for countries in the region. Russia is still perceived as a significant geopolitical threat, but where there once was only fear, now there is also economic opportunity. If a substantial change of strategy is not to be expected in the medium term, warmer relations with Moscow are no longer a taboo. More important, regional countries consider the United States -- and not necessarily Brussels -- a counterbalance to Russia.


So far Hungary is the most vocal advocate of this strategy, but others, including Poland and Romania could follow.”