Hungary could get into trouble because of its energy dependence on the Russians
The news arrived Thursday morning that Russia had attacked Ukraine. With this, the war officially started, masses of civilians tried to leave Kiev, get cash, and even according to our exclusive speakers, many are already fleeing Transcarpathia to Hungary. There is no question that the first line of unfortunate consequences is affecting the Ukrainian population, but we must not forget that the Russian attack could bring about significant economic and geopolitical changes around the world, and could have a direct impact on the lives of the Hungarian people.
As previously reported, the news of the war has seen major declines in world stock markets, and the forint has started to weaken sharply. Zoltán Pogátsa According to the economist, although the Polish currency, the zloty, has since collapsed, for the first time in the region, only the forint was torn to such an extent. According to him, this is a good indication that “investors thought that Hungary’s relations with Russia were of a different quality than those of other countries in the region.” He sees this is why the conflict could affect us sensitively, despite the fact that Poland and Slovakia are also front countries. As you said:
“It is not ruled out that the forint will weaken further, it is a lasting war – and all indications are”.
The expert also talks about the short- and medium-term effects of the war, which could fundamentally overwhelm the current economic, energy and geopolitical system. He mentioned the start of the refugees and the further rise in gas and oil prices as one of the most significant factors. He added that in addition to the Paks Nuclear Power Plant, it also imports refrigerants and other technological equipment from Russia, so
Hungary is completely dependent on Russia for energy.
“This situation shows that it is not possible to rely on such a single country and such a problematic country,” he explained. According to him, the whole Paks project is being called into question by this, meaning that he now sees a much lower chance of building Paks with Russian technology2.
Zoltán Pogátsa also drew attention to the fact that the Hungarian government wants to achieve a sustainable transition with gas and nuclear energy, but unfortunately it is becoming problematic in this unstable situation. “The decentralized sustainable energy transition in Hungary is gaining momentum as a result of the war, which means that the whole energy situation is very suddenly in a different perspective,” he said, pointing out that anti-nuclear voices within the European Union may be stronger. He noted that this could even have positive benefits in the long run. He believes he is independent of the long Russian expert
Russian gas supplies to Hungary could also be jeopardized by the war,
and the Hungarian people can feel all this on their own skin in a very short time, weeks or days. Especially that Vladimir Putin continues to threaten rising gas and oil prices.
Among the banks, the share price of OTP, which has significant Russian and Ukrainian interests, also plummeted after the war. We were wondering to what extent this could affect the finances of Hungarian support. To this, the expert put it this way, “European investment insurance up to a hundred thousand euros is still in operation, so those with an OTP deposit account have nothing to worry about, investor insurance protects them”. As he said, in this case, shareholders may be really worried. Despite all this, Zoltán Pogátsa emphasized that we only have close energy relations with Russia, so the effects of the war will be felt most on energy supplies and energy prices.
(Featured image: The Paks Nuclear Power Plant on June 22, 2018. Photo: Tamás Sóki / MTI)