Germany now considers Hungary a security threat and is preparing to take tough action

Átlátszó’s sources close to the new German government indicate that Berlin is setting aside its economic interests and pushing for tough measures against the Hungarian government, as it views Viktor Orbán’s anti-Ukrainian policy as a threat to security. According to our sources, Hungary’s continued stance against European unity on the issue of Russian invasion of Ukraine can lead to further deterioration in bilateral relations and further proceedings at EU level, including the loss of voting rights and €43 billion in EU funds.

“The new German government is once again reaching out to Budapest. But it expects them to take the necessary steps in return,” Johann Wadephul said just a few weeks before his appointment as foreign minister. So, right after the elections but before the government was formed, the coalition of the conservative CDU/CSU and the social democratic SPD sent a clear message to Hungary about what kind of relationship they expect.

But even before the early elections, it was clear that the CDU, led by Friedrich Merz, wanted to support Ukraine much more strongly in its war with Russia. And to this end it wanted to create a renewed, unified European response, led, of course, by Germany. The biggest opponent of this plan is Hungarian Prime Minister Viktor Orbán.

This was obviously not news to the Hungarian side either, and it was no coincidence that they threw their weight behind the AfD,

which had been considered a red line until then, even before the elections. The support for Alice Weidel, hailed as Germany’s only hope, naturally caused the CDU/CSU to blow a fuse, but this is by no means the main cause for concern in Berlin.

However, the Hungarian government knew that if it wanted to continue its anti-Ukrainian policy—and with the elections approaching, it could hardly talk about anything else—it could not count on flourishing relations with its former German sister party. With the economic situation deteriorating and public services in ruins, the only topic it can throw into the already heated campaign is scaremongering about Ukraine.

Wadephul, one of Merz’s closest confidants, considers Ukraine to be his top priority, so he was not speaking off the cuff in the above interview, but rather conveying the chancellor’s message.

According to our information, this interview was not the only way to draw the Hungarian government’s attention to the seriousness of the situation. A brief one-on-one conversation also took place between the two heads of government on May 16 in Tirana, at the European Political Community summit. At the time, Viktor Orbán commented that he and Merz did not agree on the issue of Ukraine. The German side did not comment on this conversation publicly, but we learned that even then, it had already drawn the Hungarian prime minister’s attention to the need for unified EU action against Moscow.

Unofficial German visit to Budapest

The message was also conveyed in a more official manner. According to our information from German government circles, the German Secretary for Foreign Affairs, Géza Andreas von Geyr, arrived in Budapest on July 14 and held private talks with, among others, Gergely Gulyás, Tibor Navracsics, János Bóka, and Péter Sztáray, State Secretary for Security Policy at the Ministry of Foreign Affairs.

At these meetings, the German government also conveyed its message to the Hungarian side that, although Berlin is seeking pragmatic cooperation with Budapest, a prerequisite for improving bilateral relations is that the Hungarian government change its policy on Ukraine and not undermine joint EU action in support of Ukraine and against Russia.

We contacted the Hungarian government officials mentioned above separately to confirm our information about what was said at the face-to-face meetings. According to the Prime Minister’s Press Office, apart from the fact that the head of the Prime Minister’s Office (not Orbán, but his deputy Gergely Gulyás) met with Géza Andreas von Geyr, the statements and assumptions contained in the questions are unfounded. According to the office of Tibor Navracsics, Minister of Public Administration and Regional Development, it was a friendly conversation between the two parties. Despite this, he confirmed that no information will be released about the meeting. Other participants did not respond to our request for comment.

Problems to be dealt at EU-level

In addition to the further deterioration of bilateral relations, the German government would deal with the “Hungarian problem” at EU level.

It is precisely the German government that has so far urged restraint in dealing with Hungary because of its economic investments in the country.

However, the new leadership in Berlin has made security policy a priority, which takes precedence over economic interests.

John Morijn, professor of international law and politics at the University of Groningen, spoke to our newspaper about this. According to Morijn, the problem is no longer just the rule of law, which hinders economic cooperation and cross-border trade, but also security, which operates according to a completely different logic. The problem, according to Morijn, is that almost every security decision requires unanimity in Brussels, which gives Orbán and the Hungarian government maximum room for maneuver.

The German attitude towards Hungary is therefore changing at EU level, and Viktor Orbán’s repeated vetoes on the Russian issue have already annoyed enough member states, prompting Brussels to work hard to neutralize the Hungarian government’s veto policy.

Kim Lane Scheppele, a former researcher at the Hungarian Constitutional Court and current professor at Princeton University, told us that Orbán’s vetoes on Ukrainian issues can be circumvented by creating separate contractual agreements, and that the EU’s legal framework is flexible enough to prevent the Hungarian government’s resistance from becoming a serious obstacle on key issues.

As she points out, the best example of this is the response to the 2007-2008 budget crisis, in which eurozone member states concluded an agreement outside the treaties without the consent of all non-eurozone member states. In addition, the Schengen Agreement is also a separate, non-treaty agreement that does not require all Member States to join, thus allowing the abolition of internal borders between those willing to do so (even non-EU members). Similar forms of EU defense cooperation can still be established between “willing countries,” including Ukraine.

All EU funds allocated to Hungary could be frozen

In preparing this article, we spoke with sources familiar with the work of the European Commission, who say that the situation is not so simple. Bypassing the Hungarian government in the current sensitive situation would not be the right tactic on the part of the EU, as clear and unified communication is now needed with both Kyiv and Moscow, and the EU must present a united front to the outside world. The political will to take tougher action against the Hungarian government already exists, as it is undermining the unity of the EU by vetoing issues related to security policy.

Our sources have unanimously stated that there are plans to freeze all EU funds currently allocated to Hungary, possibly as early as this fall.

According to the Commission and the member states, this is the most effective action to take against the Hungarian prime minister, who only understands and speaks the language of money. Currently, 55% of the recovery fund and three operational programs are frozen, but it is worth remembering that at the EU summit on Ukraine’s accession, €10 billion in EU funds were released to Viktor Orbán’s government in exchange for a certain coffee break (so that he would not veto the decision).

From the approximately €43 billion budget (this is the seven-year budget and the amount of funds allocated to Hungary from the recovery fund), they could freeze tens of billions of euros more, including all agricultural subsidies, which would be a disaster for the Hungarian economy. According to our sources, there is now political will on the part of both the Commission and the member states to do so.

Parallel to the possibility of freezing EU funds, there is also a chance that the Article 7 procedure will be continued, which could ultimately result in Hungary losing its voting rights. This procedure has been dragging on for years without any progress, and one of the reasons for this was Germany. However, the new German government has put this issue back on the agenda, and the current Polish government would no longer stand in the way of such action against the Orbán government.

According to our sources, the problem here could be posed by Slovakia, Romania, and Bulgaria, small countries that would be wary of similar action being taken against them in connection with concerns about the rule of law, and would therefore be reluctant to vote against Hungary, given that a unanimous decision is required to suspend voting rights.

However, a solution would also be worked out for this, whereby once it has been established that a member state is persistently violating the rule of law, its voting rights in a given area, in this case security policy, could be restricted by a separate decision, not unanimously, but by a qualified majority. This would be politically easier to sell to those member states that fear they may be next in line, because

the withdrawal of Hungary’s voting rights would be applied exclusively in relation to the Ukrainian issue.

With its pro-Russian and anti-Ukrainian policy, the Hungarian government has thus already managed to anger our largest economic partner, Germany, which is preparing to take tough measures against Hungary in these times of war and danger.

In addition to Germany, more and more member states are losing patience with the Hungarian government’s idiosyncratic veto policy. The autumn months may therefore bring not only new political conflicts but also concrete financial consequences. If Orbán and his allies are unable to reach an agreement with Merz soon, this could have catastrophic economic and security policy consequences for Hungary. The issue is no longer solely about the rule of law, but also about the functioning of EU decision-making and the unity of European security policy. The Hungarian government’s next steps could therefore have a fundamental impact not only on the fate of funds, but also on Hungary’s wiggle room within the European Union.