Democracy Digest: Gas, Guns and Graft

Gazprom cuts off gas to Poland and Bulgaria, the Czechs discuss defence cooperation with the US, and Hungary becomes the first target of the EU’s new mechanism to withhold funds from member states that break the rule of law.

Russia has been trying to split the West for years, with populism the main weapon. Donald Trump was a disaster for transatlantic ties. Hungary and Poland have long undermined EU unity. But the invasion of Ukraine is powering a diplomatic frenzy that could help unravel the Kremlin’s web.

Senior Czech officials were on the road this week to help push this newfound unity. Czech relations with Poland have been rough for some time, but the war has illustrated that the pair has powerful mutual interests that overshadow bickering over mining or food.

Those earlier arguments, based on Prague’s plan to play a major role in distributing gas from Russia’s Nord Stream 2 pipeline, derailed the project to build the Stork II gas link between the two countries in 2020. Czech Prime Minister Petr Fiala travelled to Warsaw on Friday to try to resurrect the Stork II pipeline, which is key for landlocked Czechia if it is going to get anywhere close to dumping Russian supplies.

Prague was already planning to try to tap into liquefied natural (LNG) supplies arriving on the Baltic coast of Poland or Germany before the invasion. Stork II – which missed out on EU funding when the project was snuffed out – would be a significant step towards that goal. And the nature of pipelines is to cement friendly relations.

“There are a number of projects that have a chance to move Czech-Polish relations to an even higher level and at the same time ensure a secure energy supply for the Czech Republic,” Fiala said ahead of his trip.

Poland has been driving a strategy to wean itself off Russian energy for some time, building LNG capacity and a pipeline to Norwegian gas fields. It plans to become independent of Russian gas by the end of this year, when its current contract with Gazprom expires.

It was an easy decision by Russia, therefore, to cut gas supplies to Poland on Tuesday to punish it for its support for Ukraine.

“The Russian Federation is aggravating the situation and breaking the existing treaties. This is further proof that we must gradually get rid of our dependence on Russian fossil fuels,” Fiala noted, as he welcomed a visit from Poland’s President Andrzej Duda earlier in the week.

Prague is reportedly already negotiating the resumption of Stork II with the European Commission.

Meanwhile, Prague’s defence and foreign ministers were in Washington to discuss deepening cooperation with NATO, as Czechia considers its own security arrangements. Amid the Kremlin’s threats to “retaliate” against those arming Ukraine, Central and Eastern European countries warn it’s clear that if Putin is not stopped in Ukraine, then his eye will stray further west.

Defence Minister Jana Cernochova spent the week discussing a defence cooperation agreement with the US. The details are set to be hammered out next month, according to reports, but the deal would open the way for Washington to invest in bases that could host US troops in Czechia.

Prague, which has sent many pieces of Soviet-era artillery to Ukraine, would also purchase US arms. “We are committed to cooperation on the modernisation of the Czech Armed Forces. We want to replace the obsolete Soviet-era hardware with new equipment and end dependence on Russia,” the minister said.

Supporters of the deal say that it has been too long in coming, and that Czechia is simply joining NATO peers in the neighbourhood. “They already have a similar situation in Slovakia, Poland, Romania, Germany and 20 other NATO countries. We’re just catching up on what we missed,” wrote Jaroslav Spurny in the liberal weekly Respekt.

The need to “catch up” stems from years of ambiguous foreign policy in the Czech Republic. Over the last 20 or more years, while an EU and NATO member, Czech leaders have cast doubt on the country’s orientation. Vaclav Klaus and Milos Zeman, who have been both prime ministers and presidents over the last three decades, promoted Russian links to their populist electorates during their years in power.

While Russia’s vicious invasion of Ukraine appears to have at least taken the wind out of Zeman’s pro-Kremlin sails, the pair’s populist acolytes are still pushing against Czech unity with the West.

The deal would make Czechia a US puppet voluntarily surrendering its own sovereignty to Washington, they claim, invoking – apparently without irony – memories of the imposition of foreign troops in the country in 1968, when Warsaw Pact forces invaded.

However, the new government has seized on the war in Ukraine to help push its pledge to reassert Czechia’s Western credentials. That effort had Foreign Minister Jan Lipavsky also pressing the flesh in Washington.

Following a meeting with Secretary of State Antony Blinken, Lipavsky told Czech journalists that the US official had “expressed clear support for Czechia in all positions, including the stance on Russia and China.”

“We will keep proceeding together as allies. NATO is our guarantee when it comes to security,” the Czech foreign minister added.

Hungary is EU’s trial balloon for rule-of-law mechanism

The European Commission officially triggered its new rule-of-law mechanism against Hungary on Wednesday – the first time it has activated the process that could ultimately lead to the freezing of EU funds to Hungary.

This new instrument, approved earlier this year, is designed to enable the European Commission to withhold funds from member states that breach the rule of law. The EU can only use the new instrument if it proves that the violations concerned lead to the misuse of its budget. As such, EU officials stressed this week that if Brussels withholds funds from Hungary, this would not constitute sanctions or fines but “measures to protect the budget”.

“We identified issues that might be breaching the rule of law in Hungary and affect the EU budget,” Vera Jourova, vice president of the European Commission said. The Commission cited in its letter systemic irregularities, deficiencies and weaknesses in public procurement procedures, irregular auctioning of state-owned agricultural land, and limitations to effective investigation and prosecution of alleged criminal activity.

The Hungarian government was notified officially about the concerns and has two months to respond. A lengthy process is expected, with no final decision likely before the end of the year. The Commission highlighted that the objective is not to punish Hungary by freezing funds, but “to settle the disputes”.

Hungary is entitled to 43 billion euros in funds from the EU’s 2021-27 budget and another 7 billion euros from the coronavirus recovery fund. Hungary’s “recovery plan”, which outlined how the government expects to spend the recovery funds, is still pending approval from the Commission due to a lack of effective anticorruption measures.

Prime Minister Orban’s chief of staff, Gergely Gulyas, showed some early willingness to compromise: the government will reduce the ratio of one bidder procurements – one of the criticisms of the commission – to under 15 per cent and could also amend a law about delegating cases to certain judges, he said at his Thursday press conference.

Even so, the government largely stuck to its narrative that the EU’s decision to trigger the rule-of-law mechanism is only down to the controversial child-protection legislation Orban’s government passed last summer, and chicanery by leftist parties in the European Parliament and the liberal mainstream in Europe, who can’t tolerate Hungary’s national-conservative course.

The pro-government pseudo-think tank, the Center of Fundamental Rights, reacted with a not-so-subtle threat: “The procedure was launched when preserving the internal unity of the European Union would be paramount,” it wrote in a Facebook post. “With the current decision, the Commission is driving a wedge between the Member States.”

As expected, opposition politicians hailed the decision of the Commission. Klara Dobrev, an MEP from the Democratic Coalition (SD), concluded that “Europe is strong, and Orban lost”. For her, the message is clear: “The Union will no longer fund corrupt, tyrannical regimes like Orban’s.”

Katalin Cseh from the liberal Momentum (Renew) party recalled that, “due to the deepening existential crisis, Hungary has never needed EU money more – and never has it been in a weaker position to bring that money home. If Viktor Orban really cared about representing Hungarian interests, he would not trample on the Hungarian rule of law, but would do everything in his power to obtain EU funds”. Instead, he is intent on enriching himself and family members, she wrote.

On the same day the EU triggered the rule-of-law mechanism, Orban chose to announce further feel-good measures for citizens, including an increase in pensions and the extension of price caps on fuels and basic food products until at least July 1. In order to curb skyrocketing inflation, Hungary froze the prices of petrol and diesel at 480 forints per litre (about 1.3 euros) last November, while prices of basic food items like milk, oil, flour, sugar and chicken breast are also regulated.

The measures had the unfortunate effect of hurting small, privately owned petrol stations, but the bulk of the losses are being incurred by the national oil and gas company Mol Group. Experts warn that the measures, including Orban’s utility price reduction scheme, could lead to a monumental budget deficit this year.

At the same time, the Hungarian government is trying to navigate the mounting gas crisis in Europe. After Gazprom announced that it will stop supplying Bulgaria and Poland, Hungarian Foreign Minister Peter Szijjarto moved quickly to assure people that gas deliveries to Hungary are not at risk. However, it is unclear what would happen should Bulgaria stop Russian gas transiting through the TurkStream pipeline, which also serves Hungary and Serbia.

Hungary signed a 15-year gas supply contract with Gazprom last October with an annual amount of 4.5 billion cubic metres of gas, out of which 3.5 billion cm is delivered from this southern route served by TurkStream.

Government officials emphasise that they see no viable alternative to Russian gas and oil supplies at the moment, and consider Gazprom a reliable partner. But Hungary could find itself at odds with the EU if it was shown that meeting Putin’s demands and championing the “smart” solution of paying in euros that are exchanged to rubles in a Gazprombank account is a breach of EU sanctions.

Poland announces extra sanctions; Boris Johnson’s big mouth

The Polish government announced on Tuesday a list of 50 individuals and companies from Russia and Belarus that would be subject to sanctions – and that’s in addition to the commonly agreed sanctions at an EU level.

The list includes Russian state gas company Gazprom – something which is thought to be the spark that led to the cutting off of Russian gas supplies to Poland on Wednesday – companies linked to the Belarusian regime of Aleksander Lukashenko, as well as companies previously involved in the import of Russian coal into Poland. Individuals on the list include billionaires Oleg Deripaska and Mikhail Fridman.

The companies and individuals will face measures such as a ban on entry to Poland and participation in public tenders as well as the freezing of any assets in the country. Those breaking the sanctions can be fined up to 5 billion euros, according to the Polish law that created the legal framework for the sanctions.

“The Polish sanctions list is a supplement to the EU list,” Interior Minister Mariusz Kaminski explained. “It applies to Russian entities and oligarchs with real interests in our country.”

Meanwhile, Waldemar Skrzypczak, a former head of the Polish army, said British Prime Minister Boris Johnson was “tempting evil” when disclosing that Ukrainian soldiers were training in Poland, which Johnson did while on a trip to India last week.

Johnson had said that Ukrainians were being taught in Poland how to use British anti-aircraft missiles before returning with the weapons to Ukraine.

“The prime minister may not be aware of it, but with such statements he puts the success of the entire military operation at risk, as well as the safety of the soldiers,” Skrzypczak told the Polish tabloid Fakt.

Russian leader Vladimir Putin has threatened quick retaliation if countries were seen to be interfering with its aggression in Ukraine. “If someone intends to intervene in the ongoing events from the outside, and create strategic threats for Russia that are unacceptable to us, they should know that our retaliatory strikes will be lightning fast,” Putin said on Wednesday in a speech to the Russian parliament.

“We have all the tools for this, things no one else can boast of having now. And we will not boast, we will use them if necessary. And I want everyone to know that,” he warned.

Fico in a pickle; Slovakia a big help to Ukraine

Former Slovak prime minister Robert Fico, who faces several charges including the establishment and being part of an organised crime group, reached out to European leaders this week in a desperate attempt to avoid being arrested by police.

In a letter sent to European leaders, the longest-serving premier in Slovak history first listed his political achievements before slandering Slovakia, its government and institutions for what he called an “abuse of criminal law”, the Sme daily reported.

“It has nothing to do with democracy, the rule of law, and it is a gross trampling of the principles on which the EU stands,” Fico wrote.

No European leader responded to Fico’s rant, giving the leader of the populist SMER-SD party a continent-wide cold shoulder, the Slovak Spectator pointed out. A group of Slovak MEPs publicly refuted Fico’s written statements, while Czech MEP Tomas Zdechovsky said of Fico’s letter: “It’s funny. It seems to me that he is now criticising the situation in Slovakia because it’s about him.”

Fico has since been voicing his anger over the charges to anyone who will listen. Addressing journalists outside a police station where the former premier was supposed to have his case heard, Fico smirked that the reporters were “smelling the blood of a SMER politician”.

In the end, Fico refused to speak to the police, claiming that he, a formerly registered attorney, did not understand the charges. He also claimed that investigators had failed to explain the accusations.

President Zuzana Caputova criticised Fico’s outburst, calling it a “political attack”. “The last thing law enforcement needs today is pressure from politicians,” she added.

Fico responded to Caputova’s comments with paranoid ramblings that he is being monitored by military intelligence. Defence Minister Jaroslav Nad denied that.

The Mandate and Immunity Parliamentary Committee meanwhile recommended lawmakers lift Fico’s parliamentary immunity so that law enforcement could prosecute him. Fico labelled the committee’s session “a political process that is unbelievable and insane”. The parliament started discussing the possibility of Fico’s criminal prosecution on Thursday, but is not expected to vote on the matter until next week.

Meanwhile, Slovakia came fourth out of 31 Western countries in a ranking of the biggest supporters and arms suppliers of Ukraine based on the country’s economic output. The list, compiled by the Kiel Institute for the World Economy in Germany, was topped by Estonia, Poland and Lithuania.

“Geographic proximity to Ukraine seems to play a major role in the engagement of Eastern European countries,” research director Christoph Trebesch said.

On top of military aid, Slovakia is likely to be the source of high-level personnel sent to Ukraine, too, personified by US ambassador to Slovakia Bridget Brink, who has been nominated by President Joe Biden to serve as the new US ambassador to Ukraine, the White House informed.

Elsewhere, Slovakia’s operator of the natural gas transmission network, EUSTREAM, revealed that it has not recorded any problems with the supply of Russian gas, as news emerged of Poland and Bulgaria being cut off by Gazprom. Gas transport from Russia to Slovakia via Ukraine has been lower than usual in recent weeks, EUSTREAM conceded, but the drop-off was in line with customer requirements, the operator said.

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