How Hungary keeps holding the EU sanctions against Russia hostage

Good morning.

Today, our Budapest whisperers preview crucial discussions on extending the EU’s Russia sanctions, which may or may not be held up by Hungary. And our Dublin correspondent describes Micheál Martin’s tempestuous process of taking office as Taoiseach, and why the clouds are not set to part yet.

Have a great weekend.

Rollover blues

Hungary has continued to keep other EU members states on their toes about whether it will support a routine extension of the bloc’s sanctions against Russia.

Today, Budapest could finally show its cards when EU ambassadors meet to discuss the review, write Paola Tamma and Marton Dunai.

Context: Hungarian Prime Minister Viktor Orbán has repeatedly called for an end to the Russia sanctions. In December, he indicated he would not approve the twice yearly rollover as he had previously done. The sanctions need to be renewed unanimously before they expire at the end of the month.

Hungary wanted to await any changes in US policy towards Russia after Donald Trump’s inauguration as president, arguing that Europe should take note of such a shift.

But Trump has held the line on Russia, threatening to amp up sanctions if Russian President Vladimir Putin refuses to negotiate a peace deal with Ukraine.

Still, Hungary hasn’t let up. Cabinet affairs minister Gergely Gulyás said yesterday that discussions would be needed before making a decision on renewing the sanctions.

“It’s worth debating this in the new situation,” Gulyás said during a press conference.

He said the sanctions rollover was not “automatic”, but declined to answer whether Orbán would veto it.

“We have always argued to end sanctions politics,” he said. “[With] the new US government, unlike the previous one which has forced sanctions on Europe, there is no such demand yet.”

But some diplomats with knowledge of the considerations believe it’s more noise than substance, saying that Hungary is unlikely to hold up the rollover of the existing 15 sanctions packages, as long as it continues to receive exemptions to import Russian energy.

One EU diplomat said they were confident that the sanctions would be renewed, given that a failure to do so would jeopardise the whole EU and G7 sanctions architecture — a “nuclear” option that many don’t think Orbán will dare pursue.

But discussions could also be pushed to a meeting of EU foreign ministers on Monday, prolonging the suspense.

Chart du jour: Getting out

Sunday’s elections in Belarus are set to cement Alexander Lukashenko’s grip on power, and have been called a “sham” by the European parliament and the US State Department.

New government, same problems

Micheál Martin has returned to the job of Ireland’s Taoiseach as his country battens down the hatches for the arrival of storm Éowyn today.

Just after the new government weathered a parliamentary tempest, fresh clouds are also already brewing over Ireland’s housing policy, writes Jude Webber.

Context: Ireland’s new government looks a lot like the last one. Martin, who leads the centrist Fianna Fáil party and was prime minister from 2020-22, will swap places with outgoing Taoiseach Simon Harris of the centre-right Fine Gael, rotating in late 2027.

But Martin’s return has already been tempestuous. He should have been installed as premier on Wednesday, but was only voted in yesterday after an opposition revolt over his junior coalition partners sparked chaos and shouting matches in parliament.

Just before his election as Taoiseach, the central statistics agency released data on a key policy area the government has pledged to fix: housing.

It found that 30,330 homes were built last year, a drop of 6.7 per cent from 2023, and nearly 10,000 short of the last government’s 40,000 goal.

“The government’s housing plan is in tatters,” said Eoin Ó Broin, housing spokesperson for the main opposition Sinn Féin party.

Rory Hearne, of the Social Democrats, called the fall “far worse than we had feared”.

“It calls into question the [new government’s] commitment . . . to deliver 300,000 homes over the next five years,” Hearne said.

What to watch today

1. EU chief diplomat Kaja Kallas travels to Ankara, holds press conference with Turkish foreign minister Hakan Fidan.

2. European Central Bank president Christine Lagarde and IMF director Kristalina Georgieva speak at the World Economic Forum in Davos.

Now read these