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Energy company signs agreement on South Stream pipeline

December 14th, 2013

As the Hungarian state run energy company reaches agreement with Gazprom on plans for the South Stream pipeline, a leading left-wing daily contends that, in the dispute over the pipeline, PM Orbán has to find a delicate balance between Russia and the EU.

Népszabadság reported that on Wednesday, Gazprom head Alexei Miller held secret negotiations with PM Orbán in Hungary. On the same day, Mr. Miller signed an agreement with the MVM Hungarian Electricity Ltd. on preparing the construction plans of the Hungarian section of the South Stream pipeline. Although the Russian press reported the two meetings were connected, Népszabadság has learned that the two events were scheduled for the same day by mere coincidence. Népszabadság also recalled that the week before the European Commission announced that previous agreements between Russia and the respective EU member states violate EU law, inasmuch as they give Gazprom exclusive access to the pipeline, and thus they should be renegotiated, or, if that is not possible, EU member states signing such treaties should simply forgo them.

PM Orbán is in a delicate situation, Népszabadság writes in a front page editorial. The left-wing daily points out that it is not unusual for governments to offer special treatment for representatives of influential energy giants. The current legal disputes about previous agreements on the South Stream pipeline between Russia and EU member states including Hungary, however, create a rather peculiar situation, Népszabadság adds. The Russian government wanted to create the impression that the South Stream project was supported by PM Orbán despite the negative stance of the European Commission. Népszabadság suggests that in the current dispute about the pipeline, PM Orbán “must serve two lords”: as Premier of an EU member state, he has to comply with EU law, but on the other hand he needs to maintain good relations with a country which provides 80 per cent of Hungary’s energy.

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