Russia gains nuclear foothold in EU despite concern in Brussels
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Russian President Vladimir Putin has met Hungary's nationalist Prime Minister Viktor Orban for trade and energy talks. The pair, who met twice in 2018, have held talks at least annually over the last five years, unsettling Western powers worried about Putin's proximity to the leader of an EU and NATO member state.
Critics say that Russia is investing in nuclear power plants as a way of increasing Kremlin influence inside the European Union.
In 2014 Putin signed the 10-billion euro loan deal with Orban to build two reactors at the Paks II facility, about one hundred kilometers south of Budapest.
And Putin’s visit to Hungary may see an expansion of that deal.
“It did not want to tender this out as required under EU legislation, but it granted it directly to Rosatom, the Russian nuclear company founded by Putin himself, under the condition that the Russians would give a 10-billion Euro loan.
"The penalties on default of repayment of the loan are quite negative, and one of our concerns is that if this plant is built and Hungary should be in an economically more difficult state it might not be able to repay the loan."
An older nuclear plant, the PAKS I, built by the Russians in the 1980s, came dangerously close to disaster in 2003. Daily News Hungary quotes a report by the Hungarian Atomic Energy Authority which blames the French nuclear company Framatome for "an inadequate cooling device which resulted in overheated fuel rods, almost causing a Chernobyl-like disaster." The rods were eventually transported to Russia to be neutralised.
In 2014, Hungary and Russia agreed to enhance the project with Moscow delivering two new reactors, a project to be funded up to 80 percent by that 10-million Euro Russian loan.
But according to World Nuclear News report of 23 October, Framatome-Siemens have signed an agreement to manufacture control systems for the PAKS plant after competitive tender. Does this Russian-European cooperation have a future under the current EU-Moscow tensions?
“They are a result of the Moscow-EU tensions,” says Haverkamp. Because the EU Commission was concerned about the grip that Russia would get on the Hungarian economy with such a large project and one of the conditions was that non-Rosatom entities should participate.
The EU’s concerns about growing Russian influence are illustrated by discussions surrounding gas pipelines, the North Stream, North Stream II and South Stream, where the EU Commission wants to see clear conditions that ensure that countries using the facilities will not become too dependent on Russia.
“We see at this moment the dependence, because of that, slowly decreasing.” Still, with Denmark’s approval of a part of North Stream II on 30 October, Europe’s dependency on Russian gas if far from over. But the focus seems about to shift to the nuclear sector.
“Our assessment is that the Kremlin tries to use nuclear power now to regain some of that lost influence,” says Haverkamp, mentioning Russian nuclear power projects in Finland, the Czech Republic and Bulgaria.
“We see Rosatom being very eager to buy up nuclear companies in Europe, where they try to get a participation in order to get a solid nuclear foothold inside the EU."
In their nuclear expansion into Europe, the Russians are more aggressive than the Chinese Belt and Road Initiative, which is more profit-oriented.
“The Chinese are very pragmatic in this, they don’t want to make large losses. Russia does that differently, Rosatom is taking very large risks, which also dictates speed, because the amount of capital they have is limited. But what they have they want to push in. The urge for the Russian side to gain political influence here is playing a larger role than for the Chinese,” Haverkamp says.
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