Hungary’s Experience Suggests Greece Will Follow E.U. on Russia – For a Price

If there is one government in the European Union where the new leftist leader of Greece might look for a sympathetic ear, it is probably among his counterparts in Hungary. Both of them have a clear interest in breaking ranks with the E.U. over Russia — as Greek Prime Minister Alexis Tsipras did on his first day in office this week, to the outrage of his E.U. colleagues — and they both built their reputations on standing up to Brussels, especially when it comes to the terms of paying back their loans. (In 2008, Hungary was the first E.U. member to get a bailout amid the global financial crisis, more than a year before the Greek economy had to be rescued.)

But the Hungarians have so far warily regarded Tsipras from a distance, an encouraging sign for the E.U. elites now trying to keep Greece in line. “Our situation was very much like what happened in Greece,” admits Zoltan Kovacs, a spokesman for the Hungarian government. “We were on the brink of financial collapse. Fake financial results were being presented to Brussels.”

No less important, public resentment soared after the Hungarian bailout, not only toward the then-ruling government, but toward the foreign lenders that were trying to impose their own brand of austerity on Hungary. Much like in Greece, that frustration helped bring to power a populist government in 2010, and it’s leader, Prime Minister Viktor Orban, was re-elected to another term last year. But when asked about the new Greek leadership, Orban’s spokesman shifts uncomfortably in his seat. “We would prefer to highlight the contrasts,” says Kovacs.

The contrasts suggest that while the new Greek Prime Minister may seem intent on a disrupting E.U. resolve, especially on the issue of Russia, he will more likely fall back in line if the financial support from Brussels keeps flowing. Europe has been here before. At the start of the conflict in Ukraine last spring, Hungary also questioned the wisdom of the E.U.’s decision to impose sanctions on Russia. Orban even said in August that trying to isolate Russia was like “shooting oneself in the foot,” incidentally the same phrase that Tsipras had used to describe the E.U. sanctions while on a visit to Moscow a few months earlier.

In Orban’s case, the rhetoric did not result in action. “Hungary engaged in a discussion about whether or not they work and their impact, says Jeno Megyesy, a senior adviser to Orban on relations with the U.S., which has led the push for sanctions against Russia. “But when you have equal members of a union, to raise issues does not mean we’re not part of the union. We are part of the union, we voted for every sanction.”

In the coming days, as E.U. leaders prepare to meet on Feb. 12 to debate another round of sanctions against Russia, Greece will have a chance to air its opposition to these measures, and it has already staked out a tough negotiating position. A few hours after the E.U. warned Russia of “swift” new measures on Wednesday in response to an escalation of the conflict in Ukraine, Tsipras’ government came out with a stark rebuttal: “Greece doesn’t consent,” it said in a statement.

But the next day the Greeks backpedaled. “The issue was not whether our new government agrees or not with fresh sanctions on Russia,” the Greek Finance Minister Yanis Varoufakis wrote on his blog. “The issue is whether our view can be taken for granted without even being told of what it is.” Later the same day, Greece did not move to block sanctions on Russia when E.U. foreign ministers held an emergency meeting in Brussels to discuss Russia’s renewed offensive in Ukraine this month.

That is because the Greek government’s priority, much like the Hungarian, is not to help Russia but to keep the support from the E.U. flowing. Over the next six years, for instance, Hungary has more than $25 billion coming its way from the E.U. just to create jobs and drive growth in its food and agriculture industries. That aid package was agreed last fall in spite of E.U.’s harsh criticism of Orban’s record on freedom of speech, minority rights and other issues, as well as their disagreements on Ukraine. Greece has even more at stake. In the coming months, it will seek to renegotiate the terms of its bailout and get the E.U. to forgive a big chunk of its loans, which amount to some 240 billion euros (more than $270 billion).

That will likely get expensive for taxpayers in wealthier E.U. states. But the larger issue for them is the weakness of the E.U.’s options in urging members to agree. The political tools at Brussels’ disposal, such as officially censuring an E.U. government or even suspending its voting rights within the union, “are either ineffective or the relevant actors are unwilling to use them,” says Jan-Werner Mueller, an expert on European politics at Princeton University.

As an example, he cites the E.U.’s failure even to seriously discuss suspending the voting rights of Hungary last summer, when Prime Minister Orban pledged to abandon liberal democracy and create an “illiberal new state” modeled on the successes of Russia, Turkey and China. Instead of punishing Orban’s government, the E.U. moved ahead a few weeks later with its $25 billion package of support for the Hungarian economy, once again favoring the carrot over the stick.

Amid the ongoing confrontation with Russia, this is a choice that the E.U. will face more often and in starker terms. Practically any member state that feels slighted by the E.U. establishment can hit back by merely hinting at an alliance with Moscow, an option that was not available to most E.U. members before the crisis in Ukraine, at least not to the same extent, says Mueller. “It adds another layer of conflicting interests.”

But as long as the E.U., and particularly the German engine of its economy, can meet the financial needs of its poorer allies, they should be able to maintain (or purchase) a level of solidarity. The only question is how much they can afford.

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