Name: Druzhba pipeline row exposes EU division | DW News
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The European Commission has issued a rebuke to Ukraine's President, Volodymyr Zelensky, for the direct and personal threats he's made towards Hungarian Prime Minister Viktor Orban.

The Commission said the Ukrainian president's threat to use physical force against the leader of the EU member state was not acceptable.

Viktor Orban is blocking a 90 billion euro loan to Ukraine, which of course is fighting off Russian invasion.

Here's the Ukrainian president in his own words.

We hope that one person in the European Union will not block the 90 billion euro and that Ukrainian fighters will receive weapons.

Otherwise, we will give this person's address to our guys so they can call him and speak to him in their language.

Okay, well, the rebuke from the European Commission comes at a moment of high tension between Hungary and Ukraine.

The previous week, Hungarian authorities arrested seven Ukrainian nationals who were carrying roughly $82 million in cash and gold.

Ukrainians are suspected of money laundering and Kyiv has accused the Hungarian government of taking them hostage.

According to officials, the detained individuals were employees of Ukraine's state owned Oshad Bank.

They were traveling from Austria to Ukraine in two armored vehicles.

Ukrainian authorities say the cash transport was part of routine operations between state banks.

Oshad bank confirmed that Hungarian Authorities have seized $40 million, 35 million euros and 9 kg of gold.

Kyiv and Budapest are currently locked in a bitter dispute over Hungary's access to Russian oil via a pipeline that runs through Ukrainian territory.

Oil deliveries through the Druzhba pipeline have been halted since late in January.

Ukraine says the stoppage is the result of a Russian drone strike that damaged the pipeline's infrastructure.

Kyiv argues that repairing the damage would put Ukrainian technicians at risk, and

even if it was fixed, the route would still be exposed to future attacks.

They accuse Kyiv of deliberately obstructing the flow of Russian crude oil and they're threatening retaliatory action against Ukraine until the oil starts flowing again.

Well, our Brussels correspondent, Ferenc Gal, was at the briefing when the Commission rebuked the Ukrainian President.

Yes, the Commission's spokesperson made it very clear that they are not happy about President Zelensky's comments.

They said any threat to any EU member state was something that they would not condone.

So this was a very clear point in direct response to the President's statements.

Now, they also called on both sides, meaning Hungary and Ukraine, to dial down the hostile rhetoric, which they said is not conducive at all to finding a solution, which the EU commission says is still their goal.

They said that, you know, the tensions that have really been escalating on a verbal level, especially between these two countries, are really a problem.

And, you know, they are expecting both countries to act in a way that makes it possible to find a solution in this conflict around the pipeline.

Isn't the EU supposed to be reducing its dependence on Russian oil because of Russia's invasion of Ukraine?

So what has been the Hungarian position on that?

So the Hungarian position has been that they claim they are for economic reasons, for infrastructure reasons.

Now, there is a lot of counter arguments, and

most countries have actually managed to get off Russian oil, even though if they were historically dependent on it.

But Hungary has not really made efforts in that direction even after the war started.

The EU's position is very difficult because on the one hand, it is sanctioning Russia, it is taking steps to get off of Russian oil, Russian fossil fuels.

But it then also has to kind of, you know, represent Hungarian interests in a way as a member state in calling on Ukraine to repair the pipeline and get the Russian oil flowing again to.

To an EU member state, which of course, is a slightly ambivalent and difficult position.

Okay, so what options does Brussels have then if Hungary continues to block aid to Ukraine?

It's difficult because on the level of exerting pressure on Hungary, the EU really has used most of the levers it has because most of the EU funds that Hungary would get are already frozen over.

Rule of law issues, mainly corruption, suspicions, these kind of things.

So in this case around the pipeline, it is very likely that the EU would have to kind of give Hungary something that they want in exchange than for Hungary lifting the veto.

One possibility could be, of course, that Ukraine gets the pipeline operational again and then Hungary lifts the veto.

Another option would be that the EU maybe approves a multibillion dollar defense loan for Hungary that they're still waiting for, and

then that could maybe shift Budapest stance in this whole dispute.

But as of now, it's not really clear what path the commission could choose, but

And a word then about all this Ukrainian cash and gold that is now in Hungarian hands.

Yes, so it's easy to understand why that might raise eyebrows.

You know, a truck full of cash and gold crossing an EU country to get to Ukraine.

But it's actually not all that unusual if you think about the fact that A lot of people in Ukraine, for example, like to have their money in harder currencies like euro and dollar, because they are simply more stable and retain their value.

So this bank, which Ukraine claims has just been conducting a regular transport from Vienna to Ukraine.

This bank is in need of cash in euro and in dollar so that people can have their money in these currencies.

So it's not actually necessarily a sign of illicit activities or money laundering.

Now, the Hungarian side, of course, claims that they have suspicion of money laundering.

But it is unclear what they will do with the money in the future.

Okay, you've never heard of it, but Dr. Benjamin L.

Schmidt definitely has served as European Energy Security advisers to the U.S. state Department.

He's currently a Senior Fellow with the Democratic Resilience Program at the center for European Policy Analysis.

And when he's not doing that, he's also a Senior Fellow at the University of Pennsylvania.

People will be so always glad to be here.

So, look, I'm not here to talk about the gold, as you said.

But the Daruzhba pipeline was hit by a Russian strike inside of Ukraine and has resulted in an outage of Russian oil transiting Ukraine to Hungary.

And the Ukrainians are, by all accounts, trying to fix this.

This is energy infrastructure that has once again been targeted by a kinetic overt strike by the Russian Federation.

And by the way, these are the sort of concerns that we've had for many, many years, not only about European dependence on Russian energy resources, things like oil and gas, but

They have the ability to weaponize both things.

And in this case, they actually struck their own, ostensibly their own pipeline, the Russians, and

created this rift between Budapest and Kyiv just at a time that Orban is trying to solidify power and go towards this next election.

Okay, so people are going to be surprised that Ukraine is still allowing Russia to pump oil through its territory while Russia is bombing it.

This is part of an artifact of what the countries in Central and Eastern Europe, a few of them, in this case Hungary, have been pushing for the entire time right there.

As the rest of the continent has phased out Russian oil and has phased out Russian gas, countries like Hungary and Slovakia have pushed back and in fact have used other EU support to Ukraine, whether it be this loan that's currently in question or sanctions packages on the Russian Federation to abstain from supporting Ukraine and instead trying to use that as blackmail to continue Russian oil and in some cases, gas flowing to those countries.

And so, yeah, there is still Russian oil flowing across that.

This shouldn't even be in question, Phil, because the Hungarians should have been going along with the EU and outlawing these large imports of Russian crude oil long time, a long time ago.

Again, as we've entered the fourth year of this conflict.

And so does Ukraine realistically have any chance of shutting this, this, the flow of oil through this pipeline?

Well, I mean, in this case, this was a strike by the Russians on this pipeline.

And the Ukrainians, probably against their judgment, are trying to restore that flow because they realize that they want to be seen as a reliable energy partner and making sure that infrastructure that is supporting going across Ukraine and supporting Europe is well and truly functional.