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Prime Minister of Hungary Viktor Orban (retranslated): Good afternoon, ladies and gentlemen, I welcome the President of Russia!

I would like to thank him on behalf of Hungary and the Hungarian people for visiting us. A visit by the President of Russia is always a great honour for us. We held lengthy and very successful talks that prioritised economic issues. Perhaps you know that Hungary strives to maintain transparent, good contacts with Russia. Once a year we discuss the state of bilateral affairs. Last year, I visited Moscow at the invitation of the President, and we are grateful to him for making a visit in return.

We stated that both sides have fulfilled the promises that were made two years ago, a year ago. We signed regional cooperation documents. Hungary opened its General Consulate in Kazan and we signed a plan of consultations at the level of foreign ministries.

We thank the President for the fact that our previous gas supply agreements were modified and gas supplies were therefore guaranteed for us through 2021. Today we took the decision to ask our officials to begin negotiations on gas supplies beyond 2021.

We also addressed nuclear energy cooperation. We agreed that we have already eliminated the majority of obstacles. One issue remains open and we are waiting for an EU decision on it. We are convinced that our agreements are fully in compliance with EU requirements and we very much hope that this year we will be able to begin preparations and go ahead with construction in 2018.

The results of our economic cooperation are especially valuable since we achieved these results in a particularly difficult international situation. As you can see, anti-Russia rhetoric has become trendy on the continent, in its western part. And under these conditions we had to uphold our economic contacts and preserve everything we could. It makes me sad to say that despite all our efforts, unfortunately, we have lost a lot in trade between our countries: $6.5 billion is the damage that was caused to our economies.

Hungary continues to maintain that non-economic problems cannot be resolved by economic means. Other conflicts should not be moved to the economic area because this will hurt everyone. This is why we hope that in the near future we will be able to welcome new, good relations between Russia and the European Union. It is very difficult to live if we do not have open, productive and intensive forms of cooperation with the powers that be.

Many of our expectations in cultural and humanitarian areas were also met. We agreed on student exchanges. Hungary also took the decision to finance the renovation of four Orthodox parishes.

I am convinced that one of the most important results of our cooperation is that over the past two years, pursuant to the agreements with the Russian President, we have carried out investment projects in the food industry. This is very important for the Hungarian economy, and we would like to move on from agriculture and provide investment opportunities also to Hungarian companies in the water industry. Hungary has world-class technology and this will be a major breakthrough also in terms of foreign trade between our countries.

We know very well that open discussions are ongoing in the European Union on a wide range of foreign policy issues. We also discussed them. We sought to preserve and save everything from Russian-Hungary contacts that we could, and when the world returns to the sound logic of cooperation, the Hungarian economy will have a head start in developing the Russian market.

This leads me to the conclusion that from the economic and economic-political perspective, our talks were successful, for which I thank you, Mr President.

President of Russia Vladimir Putin: Mr Prime Minister, ladies and gentlemen,

Let me start by thanking Prime Minister Orban and all of our Hungarian colleagues for the invitation and the chance to continue our practice of exchanging views at the highest level.

We discussed practically the full range of bilateral relations, and of course, as the Prime Minister said just now, we focused particularly on supporting, developing, and finding new opportunities for economic cooperation.

We value the Hungarian government’s desire to steadily develop mutually advantageous cooperation with Russia. Hungary is, without doubt, one of Russia’s important and reliable partners in Europe. Our countries conduct a regular political dialogue, our foreign ministries have close contacts, and our Intergovernmental Commission on Economic Issues is working effectively.

During today’s talks, as I said, we gave priority attention to economic cooperation matters. The objective figures show, regrettably, that bilateral trade has nearly halved over the last three years. The investment sector reflects this same negative trend. Last year, mutual investment fell nearly by half.

No one can be happy with this situation, of course. In this context, we discussed and outlined concrete measures to activate our reciprocal trade and investment. The Prime Minister spoke just now about one of the possibilities in this area – to expand mutual investment and put it to use for both economies’ benefit.

In particular, we agreed to develop our energy sector cooperation. We place great importance on the construction, carried out by Rosatom, of two new power units at the Paks nuclear power station, a project that is worth 12 billion euros. This nuclear power station has been operating for a long time in Hungary and today produces close to 40 percent of all electricity produced in that country. The launch of the two new units will make it possible to double electricity production and satisfy the demand for electricity that is essential in order to develop new production facilities in Hungary. The project will also create new jobs, around 10,000 jobs.

There are good prospects for developing cooperation in the oil and gas sector. Russia supplies a substantial share of the hydrocarbons used in Hungary. Furthermore, Hungary is a reliable link in the transit chain for Russian energy supplies destined for Western Europe.

Hungary is taking part with good results in developing hydrocarbon reserves in Russia. Hungarian energy company MOL is developing oil fields in Western Siberia and plans to increase production. MOL’s subsidiary is already producing 590,000 tonnes of oil a year in Russia.

During the talks, we agreed to work more intensively on bolstering industrial cooperation, including in high-tech and science-intensive sectors. Let me note that production of passenger buses using Russian composite materials has begun in Hungary. Russian technology is also being used to modernise the Budapest metro’s rolling stock. We have plans for joint production and supply of railway cars to other countries’ markets. Hungarian companies are active in the Russian pharmaceuticals industry and agriculture.

We have established close partnership ties between all 19 Hungarian regions and more than 50 of Russia’s regions. We will continue to give our full support to the regions’ desire for direct cooperation, and, as you know, today, we will approve the comprehensive programme for developing regional cooperation for 2017–2022.

Our bilateral cultural and humanitarian ties are developing successfully, and we are expanding our ties in education. It is pleasing to see the renewed interest for studying the Russian language in Hungary. Of course, we are very grateful to Mr Orban and to all of our Hungarian friends for the support they give to teaching Russian and to developing humanitarian ties, including the restoration and repair of religious buildings and institutions, which is being carried out at the Hungarian government’s initiative.

During the talks, we also discussed in detail current issues on the European and global agendas. I briefed our colleagues in detail on our view regarding events in eastern Ukraine, and in the Middle East, including in Syria. On this matter, at least, we definitely share a common position, namely, that we must join forces to combat international terrorism. Political settlement in Syria and other Middle Eastern countries, and the entire region’s return to normal life as soon as possible, would certainly help to ease the serious migration crisis in Europe in general.

I hope very much for active cooperation with our Hungarian partners in all of these areas. In conclusion, I want to thank our Hungarian partners and Prime Minister Orban for the warm reception and the substantive and productive talks.

We have further talks ahead and we will now continue these discussions together with our ministers. That said, the initial work in narrow format already shows that we have a common desire to achieve concrete results.

Thank you for your attention.

Question (retranslated): A question for Mr Viktor Orban. How do you view the international space for future cooperation between Russia and Hungary? Do you see any changes?

Viktor Orban: Of course, along with national pride, we need to realise that Russia and Hungary move in different dimensions concerning military, geopolitical, and foreign policy issues. But I think it is best when you know your place and you take on a role and set goals that correspond to your country’s weight, size and influence. President Putin briefed us on the situation in Syria. We can join in only those peacekeeping missions that will protect the Christian community, because we consider it very important to protect Christian communities around the world. In other words, Hungary can take part in helping to settle international issues even in places where it does not play a major part. We are very grateful to Mr Putin for the information we received.

As for the international stage, we can all feel the atmosphere today, and we see that serious changes are taking place in the world. We think that the changes underway today will create more favourable conditions for cooperation between Europe and Russia, including between Hungary and Russia, which will be better than before. I am optimistic about the future and I believe that balanced contacts between Russia and the European Union are essential for peace in Europe.

Question (retranslated): The media said before the talks that the discussion will focus on energy issues. Did you discuss whether the Nord Stream will be linked to Hungary in any way, and whether there will be new talks on the Paks loan?

Viktor Orban: Regarding the final question, no, we did not discuss this. Of course, Hungary’s financial situation in the international economic environment has improved of late, and we have a good agreement with Russia. We do not want to risk it, and we seek to have it go ahead. We are waiting for the construction work to finally begin, because – what kind of nuclear power station is it that everyone is talking about but no one has seen? They haven’t even dug the first hole yet. We are waiting for work to start. A review of the agreement is not currently on the agenda. We want to go ahead with what I and President Putin signed earlier.

With regard to gas supplies, we cannot ignore the issue of stability of gas supplies across Ukraine. This is the key issue. We are aware of a great deal of issues that cause uncertainty, so we have always stood for diversifying our supply lines. The European Union has blocked something that would have served the interests of Hungary. That is, we are in the midst of a kind of stagnation, but we are interested in bringing that issue back on the agenda. We have the necessary capabilities in the north as well, which we aren’t using yet, but if need be, and national economic interests require us to do so, we will buy gas from Russia via the northern route.

Vladimir Putin: I will add a couple of words to that. We discussed the South Stream, a project, which, unfortunately, no longer exists. We covered the Nord Stream as well. Regarding Nord Stream-2, there is, indeed, the technical capability for Hungary to receive Russian gas via Nord Stream-2. This can be done via Slovakia or Austria – this is quite a feasible project. Russian gas can also be moved via the Turkish Stream. There are other options as well.

By the way, we do not have any political goals when it comes to gas transit through Ukraine. If it is economically viable and safe, we do not rule out the possibility of moving some gas through Ukraine as well. The issue is about diversification and the economic viability of these routes. We are exploring all possibilities. One thing is certain: Russian gas supplies to the Hungarian market will be reliable, that is a 100-percent guarantee.

Regarding other projects, for example, Paks nuclear power station, I mentioned that this project costs 12 billion, 80 percent of which was supposed to come from a Russian loan. I apprised the Prime Minister of other options. We are prepared to finance 100 percent of it, but then the terms and conditions of the agreement should be slightly different. We can do this as well.

Please note also that, as I mentioned earlier, it is also about creating 10,000 new well-paying high-tech jobs. This will, of course, improve reliability and grow the Hungarian economy in general.

Question: I have a question about Ukraine.

Mr President, your position on the conflict in Donbass is known. I would like you to clarify the following: why did this flare-up occur at this particular moment?

Since we are in Hungary, I would like to ask Mr Orban the following question: What do you think about the situation in Ukraine, especially since there is a Hungarian minority residing in Transcarpathia? Can you influence Kiev in any way, so that there is no discrimination against the Hungarian population?

Vladimir Putin: With regard to the current flare-up, we stated that it is already happening. Our position is, in fact, known: it was provoked by the Ukrainian side. Actual fighting began last Friday. On Sunday, the so-called Ukrainian voluntary units captured an opposition stronghold and moved 200 metres into the territory controlled by the militias. On Sunday, they were driven out of there.

Why is this happening now? I believe there are several reasons for that. First, the Ukrainian leadership needs money, and the best way to drum up some money is to go to the European Union, individual countries of Europe, the United States, or international financial institutions, posing as a victim of aggression. This is my first point.

Second, as we all know, during the presidential campaign in the United States, the Ukrainian government adopted a unilateral position in favour of one candidate. More than that, certain oligarchs, certainly with the approval of the political leadership, funded this candidate, or female candidate, to be more precise. Now they need to improve relations with the current administration, and using a conflict to do so is always a better, easier way to draw the incumbent administration into addressing Ukrainian problems and thus establish a dialogue.

The third reason is related to domestic politics. In the wake of the utter failure of economic and social policies, the internal opposition has stepped up its activities and needs to be shut up. It is also necessary to rally the people around the current leaders. This issue can also be resolved more easily if the conflict resumes.

There is another consideration. I think that the current Ukrainian government is not at all willing to implement the Minsk agreements and is just looking for an excuse not to do so. The resumption of the conflict would serve that purpose. I very much hope that sensible people in Ukraine, as well as those who are interested in addressing such issues through political means, will not allow the situation in southeastern Ukraine to follow the worst-case scenario, but will instead concentrate all their attention and efforts on complying with the Minsk agreements.

Viktor Orban: The Ukrainian Prime Minister recently visited Hungary. We had productive talks and signed several agreements. Ukraine was a topic of our talks today, as it is our common neighbour. Hungary is interested in having the Minsk agreements fulfilled unconditionally. We do not see any other solution, and Hungary, with its modest means, is doing everything possible to encourage compliance with the Minsk agreements. I want to say it loud and clear that Hungary is interested in Ukraine becoming a stable and successful country. We will do our best as part of Hungary-Ukraine cooperation to create a stable Ukraine. However, peace is the starting point and peace is only possible on the basis of the Minsk agreements.

It is in our interest to see the Minsk agreements implemented, because this will not only stabilise the situation in these two regions, but also take care of other issues, such as providing democratic rights to ethnic minorities, as the current discussions about the language of instruction in Ukraine are far from beneficial for the Hungarian minority. Hungary is interested in an economically stable and prosperous Ukraine, and we will do our best in that regard.

Question: This question is for the Prime Minister. I would like to follow up on the critical issue of energy supplies. I would like to hear more specifics from you. This is really an important issue, and the numbers are very impressive. We are aware of the fact that Hungary receives 75 percent of its oil and 60 percent of its gas from Russia. However, we also remember that Hungary wasn’t too enthusiastic about expanding Nord Stream, but was quite interested in implementing South Stream. As we now know, there is no South Stream, but there is Turkish Stream now. I would like to know your plans regarding interaction in this sphere.

Viktor Orban: The President of Russia said an important thing, and I want to say it again. It is important for us to get Russian oil and gas to Hungary. This is what we agreed upon between ourselves, and the President guaranteed it to us. Compared with that, all other issues are technical matters. Most importantly, we have reached an agreement. The Russian President gave his word to the effect that Hungary, no matter what, will receive the necessary amount of oil and gas which our country needs to function properly. South Stream would serve our interests well, but it is beyond our control.

We are interested in Turkish Stream. We will be pleased to participate in it. If there is such an opportunity we will take advantage of it. And natural gas supplies from the north are also in our interest if we do not get gas from other sources. I should tell you that Hungary is not in a very friendly environment. We have neighbours in the European Union. We are members of the European Union. Hungary has built its capacities in the direction of both Croatia and Romania, from where we could receive alternative supplies, but neither Croatia nor Romania – nor the European Union, if you will – has for its part built these capacities so that we could provide reverse flow supplies and also receive supplies from there. In other words, Hungary is blocked from the south.

This is why a key issue from Hungary’s perspective is that the President of Russia says that Hungary will receive the necessary gas and oil in one way or another, even if in a roundabout way. This is a very important statement for us. We gratefully thank the President for this. Diversification is a good thing, but if we are the only party that does it while other countries do not, then unilateral contacts remain.

To reiterate, the arrangement with the President and the agreement that we have signed is of key importance to Hungary.

Vladimir Putin: I can only add to what has been said. Indeed, we are doing all we can to ensure supplies to Hungary. Hungary is a reliable, solvent and stable partner. We are interested in supplying our raw materials to the Hungarian market and we will search for any ways to carry out these plans. We will definitely find them.

I would like to set the record straight. We absolutely do not politicise these issues. It is a purely economic matter, above all, a matter of economic expediency. No routes can be ruled out here. We are ready to revisit anything. We are not going to take offence at Bulgaria or other countries for failing in their time to summon enough courage to stand up to European Commission’s decisions. If they are ready to revisit that, we are also ready for it, but we need guarantees. We are no longer able or willing to sustain losses. Our companies cannot and will not sustain losses for ill-considered decisions. If we move together down this path, including in dialogue with Brussels, then everyone will surely be happy, and this will benefit the development of both bilateral relations and the energy security of the continent as a whole.

Thank you.