EU approves Hungary nuclear deal amid Oettinger controversy

Brussels drops infringement case on Hungary’s tender for massive atomic project.

The EU on Thursday closed an infringement case over a landmark nuclear power complex that Hungary is building with Russian contractors and at least €10 billion of Moscow-backed financing.

The timing of the decision is contentious as Günther Oettinger, the EU’s digital commissioner, is under fire for accepting a flight to Hungary in May in the private jet of a prominent German businessman linked to Moscow, Budapest and the Paks II nuclear project.

Oettinger was energy commissioner in 2014 when Hungary announced its decision to team up with Russia to develop Paks II — a facility that will be supplied with Russian nuclear fuel and financed by a Russian loan. It quickly became a test case of whether the EU would be able to challenge Russian dominance of eastern European energy supplies.

In November 2015, after Oettinger left the energy portfolio, the European Commission announced an investigation into the award of work at Paks to a state-owned Russian company without an open tender.

Launching its case, Brussels said that “the Hungarian government has directly awarded the construction of two new reactors and the refurbishment of two additional reactors of the Paks II nuclear power plant without a transparent procedure.”

However, the European Commission closed the case Thursday. Despite the prominence of the Paks investigation, it was left off the day’s news release on key infringement decisions. Notification of the closure of the case can be found in the case register.

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A spokesperson for the Commission said Hungary’s tender was declared legal on the grounds of “technical exclusivity.”

“Moreover, Hungary has committed to ensuring that most of the other parts of the project will be subcontracted respecting transparency, equal treatment and non-discrimination,” the spokesperson added.

Hungarian officials celebrated the green light from Brussels at a press conference in Budapest. The government website quoted János Lázár, the minister heading the prime minister’s office, as saying that “the Commission no longer disputes Hungary’s right to come to an agreement with Russia regarding the power station construction project and a related credit facility.”

In March 2015, the EU pushed Hungary to halve to 10 years the duration of Rosatom’s fuel supply contract.

The only remaining potential pitfall for Paks is an EU investigation into whether the project stands to benefit from illegal state subsidies.

In what would be another big victory for Hungarian Prime Minister Viktor Orbán, Lázár predicted that the state aid investigation would also be concluded shortly. He said the government expected to receive key documentation next week.

Brussels said the case was ongoing and warned that the outcome should not prejudged.

A full green light for the Paks project will focus attention on the relationship between Oettinger from the Commission and German businessman Klaus Mangold.

Hungary’s government says that it pays Mangold, a prominent lobbyist for German business in Russia, as an adviser. He is on the supervisory board of Rothschild, the investment bank, which issued a positive report on the economics of the Paks project.

Oettinger denies any wrongdoing in accepting the flight from Mangold earlier this year, saying there was no way he could have arrived at an event on the digitalization of industry and transport in time if he traveled by a regular flight.

“The Paks II nuclear project was not discussed,” he said.