Foreign Policy Audit: Ukraine-Hungary

01:38 PM 20-4-2016

The discussion paper was written by Ivan Medynskyi, research fellow at the Institute of World Policy, and Bence Kapcsos, invited Hungarian expert.To download the publication, please, click here.

1. Introduction

The cooperation trends set in the early 1990s have largely determined the dynamics of the Ukraine-Hungary bilateral relations for the past 25 years. In December 1991, Prime Minister of Hungary József Antall and President of Ukraine Leonid Kravchuk signed the Ukrainian-Hungarian bilateral treaty in Kyiv that became the foundation for bilateral relations. It was a fundamental document that outlined the most important commitments of both parties: absence of territorial claims between both countries and guarantees of the mutual protection of minority rights. In fact, the signing of this agreement was a symbolic act for both sides: Budapest demonstrated to the international community that it envisioned relations with its neighbors based on the principles of friendship and respect, whereas Kyiv effectively addressed the question regarding one of its most sizeable ethnic minorities hoping to set an example for Crimea and Bukovyna.

In retrospect, Ukraine and Hungary have followed quite similar historical and geopolitical trajectories as both countries cast away the burden of the past, shared Euro-Atlantic aspirations (although Ukraine occasionally deviated from this path), and positioned themselves as a bridge between the East and the West. Kyiv and Budapest enjoy rather unmarred common history in comparison to the tumultuous periods that each country had with their neighbors. In a sense, there are more things that unite rather than divide the two nations.
At the current stage, however, the bilateral relations are based increasingly on the common interests rather than common history, geographic proximity or aspirations. This trend has become evident in the light of the complex geopolitical situation that followed Russia’s decision to annex Crimea and force a conflict in eastern Ukraine. Not only Ukraine but also Hungary faced a conundrum of how to restructure their economic and energy ties with Russia. While Kyiv pursued the only possible course of action by limiting its dependence on Russian imports and natural resources, Budapest faced a hard choice between the external challenge of a unified EU position on Russia and the internal challenge of securing low gas prices and economic ties. Finding itself between the hammer and the anvil, Hungary opted for a mediatory role between the EU and Russia. Despite the salience of Russian factor in Budapest’s foreign policy, Ukraine will remain a key partner of Hungary as it seeks to strike a balance between two centers of power. Rather than pursuing a normative approach toward Budapest, Kyiv has to work consistently toward ameliorating contentious issues while creating incentives for the support of its own core interests.

For Ukraine, these interests are:
a unified position of the European Union on the Donbas and Crimea-related sanctions on Russia;
reverse gas flows;
improvement of cross-border infrastructure;
adapting the best practices in the spheres of security, democratic transition, small and medium enterprises, energy, and decentralization through the Visegrad Group.

Hungary’s interests toward Ukraine in the modern period can be deciphered through the prism of the well-being of the Hungarian minority in Transcarpathia, support of its integration into Euro-Atlantic structures, and the Eastern Opening policy aimed at finding new markets for Hungarian products.
By and large, the core interests of Ukraine and Hungary are not mutually exclusive, but rather complimentary as both countries are benefiting from the transit and reverse flow of natural gas, improvement of infrastructure and economy of Transcarpathia, visa liberalization and free trade initiative within the EU framework. In fact, cooperation extends to security (Ukraine and Hungary hold joint exercises in the Visegrad Battlegroup) and energy trade with Hungary being the largest importer of Ukrainian electricity. Hungarian businesses have a significant interest in the Ukrainian market, and there are cultural and educational programs that bring both countries closer together.
At the same time, divisive issues appear to be dominating the dialogue of the two countries. Over the past few years, bilateral relations have been tarnished by episodes that could have been avoided by improving communication and intensifying strategic dialogue. Currently, the following areas remain sensitive and, if mismanaged, could negatively affect the bilateral relations.
Sanctions on Russia. Hungary’s rapprochement with Moscow and its (at least in communication) opposing stance on sanctions on Russia endangers Ukraine’s strategic interest to maintain EU unity on this question.
Transcarpathia. It is a top priority for the Hungarian government to support and protect Hungarian communities outside of the country. Ukraine perceives Hungarian intentions (granting citizenship, calls to guarantee minority rights and economic assistance) as a possible threat to its sovereignty.
Lack of mutual understanding between the two nations. There is a shortage of knowledge on both sides about each other’s history, culture, language and national motivations. At the societal level, two nations remain terra incognita for each other in part due to a lack of interest and awareness of issues outside Transcarpathia.
In sum, the bilateral agenda is dominated by issues that are more aligned with Hungary rather than Ukraine. Although such objectives as developing cross-border infrastructure and improving trade balance resonate well with Kyiv, Hungary is taking the lead in shaping the dynamics and direction of their bilateral relations. In a sense, our inquiry reflects the current state of affairs where Hungary has more interests in Ukraine than Ukraine in Hungary. Thus, the primary objective of this paper is to identify elements and opportunities that could pave the way for more balanced relations and deeper and more fruitful cooperation in economy, energy, security and, last but not least, culture. Our aim is to analyze areas that may connect rather than separate the two nations.

This report was conducted within the project of the Institute of World Policy “Ukraine’s Foreign Policy Audit”. This project is implemented with the support the Black Sea Trust for Regional Cooperation of German Marshall Fund and Ukraine National Initiatives to Enhance Reforms (UNITER) program, which is funded by the United States Agency for International Development (USAID) and implemented by Pact Inc.
The contents are those of the Institute of World Policy and do not necessarily reflect the views of GMF, USAID, Pact Inc., and the United States Government.