EU uneasy about Hungary’s closeness to Russia

November 19, 2014

Hungary's PM Orban arrives at an EU leaders summit in Brussels

After Germany’s foreign minister saw “no reason for optimism” after talks in Moscow on Tuesday, today Hungary’s Peter Szijjarto meets Russian Foreign Minister Sergei Lavrov. Violence is on the rise again in eastern Ukraine and tougher sanctions against Russia remain a live possibility although EU foreign ministers limited themselves to targeting a few more Ukrainian separatists earlier this week.

There is some disquiet in the bloc about Hungary cosying up to Russia but no obvious way to stop it.

Budapest has signed a 10 billion euro deal with Russia to build a nuclear power plant in Hungary, committed to build the Russian-backed South Stream gas pipeline despite opposition from Brussels and stopped shipping gas to Ukraine that was helping Kiev evade a Russian energy blockade. Viktor Orban’s government says it is merely being pragmatic.

NATO’s supreme commander in Europe, General Breedlove, visits Estonia today. The Western alliance has recently reported increased levels of Russian military activity in the skies above the Baltic Sea. British Foreign Secretary Philip Hammond will visit neighbouring Latvia which, like Ukraine, is home to many ethnic Russians. Moscow has long complained about their rights.

Security forces entered Iraq’s largest refinery for the first time on Tuesday after months of battling Islamic State militants who had surrounded it. There is still resistance but complete recovery of the Baiji facility could provide critical momentum for government forces charged with restoring stability.

The Bank of England publishes minutes of its last meeting. The odds are that the vote will have remain split 7-2 against tightening policy but that obscures the fact that the timing of a first interest rate rise from a record low 0.5 percent is heading further over the horizon.

Inflation edged up to 1.3 percent in October but remains well below the Bank’s 2 percent target. That, an absence of wage growth and the struggles of Britain’s main trade destination – the euro zone – are combining to push back the likely timing of a rate rise deep into next year.

Sweden’s parliament votes on Ireland’s plan to refinance IMF debt. Sweden is the last country to ratify the plan and Dublin will go to the market as soon as it gets assent.

Ghana’s finance minister will present his 2015 budget to parliament at a more than tricky time. The government is battling a high budget deficit, rising inflation and a currency the central bank said fell 31.2 percent in the first 10 months of the year. Accra and the are also holding a final round of talks over a possible 3-year loan programme.

Serbia produces its November inflation report after the central bank unexpectedly lowered its benchmark rate by 50 basis points to 8 percent and a day before talks with the IMF over a new loan deal are due to wind up.

After outbreaks of the H5N8 strain of bird flu in European poultry, an Egyptian woman died on Tuesday of the far more lethal H5N1 strain after coming into contact with infected birds, the second death from the disease in two days and the third in the country this year.

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