View Full Version : Hungary Risks Wider Russian Trade Gap, Szijjarto Says

04-22-2013, 02:34 PM
Hungary plans to boost its energy ties with Russia, threatening to widen the central European country’s trade gap with its second-biggest trading partner, according to Hungarian State Secretary Peter Szijjarto.

“If we didn’t do anything to balance this out,” the deficit “would increase in the near future as the already diverse energy cooperation between Hungary and Russia is expected to widen,” Szijjarto said in Moscow today at the opening of the country’s trading mission, formed to help exporters break into the Russian market.

Hungary wants to boost its exports to Russia to prevent the existing $5 billion annual trade gap from deteriorating, Szijjarto said. Hungary relies on Russia for most of its natural gas imports, tilting the trade balance in Moscow’s favor.
Hungarian Prime Minister Viktor Orban is seeking to boost exports and investments as part of his “eastern opening” strategy to help lift the economy out of its second recession in four years. Last October, Russian gas exporter OAO Gazprom signed an agreement with Hungary’s state-owned energy company MVM Zrt. to build the 600 million-euro ($783 million) Hungarian section of the South Stream pipeline.

The former communist country wants to increase its agricultural and food exports to Russia and seeks to help Hungarian companies win tenders for the Sochi 2014 Winter Olympics, the 2018 soccer World Cup and regional development projects, Szijjarto said.

To contact the reporter on this story: Zoltan Simon in Moscow at [email protected]
To contact the editor responsible for this story: Balazs Penz at [email protected]

04-22-2013, 02:45 PM
this is very naive view, if you export more to a country than you import youre more dependent than the opposite. Since the other country can minimize the trade with protectionism or if the country has bad economics and then imports less. This is especially true if you export manufacturing like germany because you need to organize your wages around the country you sell your products to.

04-22-2013, 02:49 PM
Having some deficit with a few countries is not bad per se. The problem is when that gap becomes very wide, like it happens with China and other Africa, SE Asian or South American economies.

When that is the case, a lot of wealth is factually leaving the country and decreasing the amount of resources that are reinvested in the national agriculture/industry/services.

It's true that the Hungarians cannot put any faith in the Atlanticist side, but as this note from Bloomberg shows, they cannot simply turn around and expect miracles from approaching Russia. They have to do so in a smart way.

And again, their own economy should be the primary goal.