Spotlight: Putin warmly received in Hungary amid heightened EU sanctions

Despite heightened European Union (EU) sanctions on Moscow over the Ukraine crisis, Russian President Vladimir Putin found warm welcome when he paid a brief visit to Hungary on Tuesday and agreed to a deal on keeping supplying gas to the country.

Putin, who had not been on a bilateral visit to any European country since June last year, held hours-long talks with Hungarian Prime Minister Viktor Orban, which testified to the closeness between Moscow and Budapest.

GAS DEAL

During their talks, Putin and Orban agreed to extend a gas supply contract that will expire this year, with additional negotiations on some technical issues promised for later.

In earlier statements, Orban had underlined Hungary's need to renew or extend the contract. According to Putin, 85 percent of Hungary's gas and 75 percent of its oil came from Russia.

The two leaders also said they would back a successor to the defunct South Stream Project, a gas pipeline designed to transfer Russian gas under the Black Sea to southern Europe. Putin blamed the EU for the project's failure.

The Russian president said the joint venture established between Russian and Hungarian companies for South Stream could however continue to operate for the Turkish project Russia planned in lieu of South Stream.

Putin said he had no objection to the pipeline extending from Turkey through Greece and/or Bulgaria as had been envisaged for the South Stream project.

In the meantime, Russia's nuclear giant Rosatom indicated that it was following through on a contract signed last year to build two new nuclear reactors for Hungary. Putin called the contract "a very good deal" for Hungary.

EU SANCTIONS

The visit also came on the heels of new EU sanctions that took effect on Monday. Moscow has been hurt by a series of EU sanctions, the first of which are almost a year old.

Orban reiterated that sanctions against Russia were not in anyone's best interests. Instead, it was in the interests of all Europe to resolve the relationship between Russia and the European Union in a rational way.

"Isolating Russia from the EU is not rational," he said. While Hungary respected the sanctions, Orban said, they were damaging and what was really needed was economic cooperation. Peace, he said, is not an absence of conflict but the management of differences.

"Whoever thinks that Europe can be competitive, that the European economy can be competitive without economic cooperation with Russia, whoever thinks that energy security can exist in Europe without the energy that comes from Russia, is chasing ghosts," Orban said.

Talking about the ceasefire in Ukraine at a news conference in Budapest on Tuesday evening, Putin said he was optimistic that the ceasefire would hold.

Orban called the ceasefire a good point of departure and said that since Hungary borders Ukraine and with 200,000 ethnic Hungarians living there, his country is committed to the peace process.

The latest peace accord was reached after negotiations between leaders of Ukraine, Russia, Germany and France Thursday in Minsk, aimed at ending the Ukraine conflict which has claimed more than 5,300 lives. Endi