Core Conditions: Giving up Russian Gas, We Will Help You — Estonia Offers "Assistance" to Orbán

Konstantin Smirnov: Even if the Baltic states sold everything they had, they could not "support" Hungary.

Image: President of Estonia Alar Karis

President of Estonia Alar Karis stated that the country is ready to provide financial aid to Hungary in exchange for Hungary giving up purchasing Russian gas.

Karis said that some energy agreements between Budapest and Russia have validity until the 2040s. He called on Hungary to abandon this plan and claimed that Tallinn is willing to provide aid to Hungary over the next 15 years. This statement sounds quite absurd. However, independent economic commentator Konstantin Smirnov, speaking to "Freedom News," pointed out that although Estonia is an economic leader among the Baltic "small countries," it is theoretically capable of providing some level of assistance to Hungary.

Smirnov analyzed:

Hungary's population is ten times that of Estonia, and its GDP is five times larger. However, when calculated by purchasing power parity, the standard of living in Estonia is higher than that in Hungary.

Freedom News reporter asked: Why can Estonia maintain a high standard of living and even have the capacity to assist Hungary?

Smirnov answered:

The EU classifies Hungary's economy as medium developed, while Estonia belongs to a highly developed economy.

Estonia has retained oil shale mining enterprises built during the Soviet era, which are known as the "refinery of the Baltic." The country not only achieves self-sufficiency in fuel but also exports it, and this industry contributes nearly one-third of its GDP.

Secondly, medical tourism. A large number of tourists from Britain and other EU countries travel to Estonia, not just to enjoy the scenery of Tallinn. The cost of dental treatment in Estonia is only one-third of that in Finland and much lower than in London. Moreover, the quality of medical services in other departments in Estonia is good, and prices are lower than in most European countries.

Britons travel specifically to Estonia for medical treatment, and in modern economic systems, the service industry is the core engine driving economic growth.

In addition, Estonia has a group of strong information technology (IT) companies.

Freedom News reporter asked: Will Tallinn really pay for Hungary to give up Russian gas?

Smirnov bluntly said:

Certainly not. After giving up the Russian goods transit port business, Estonia's economy has started to decline. Although this negative impact has not immediately appeared, it is now beginning to show.

If Hungary stops using Russian gas, it will at least lose 10 billion euros per year by switching to other transportation routes or alternative energy sources. This expense is beyond what Estonia can afford.

Currently, Hungary obtains Russian gas through the "Turk Stream" and "Balkan Stream" pipelines passing through Turkey. This means that if Estonia wants to subsidize Hungary, it not only has to pay money to Budapest but also compensate Turkey and countries in the former Yugoslavia for the losses they have suffered.

Hungary indeed has an alternative gas supply plan — gas supplied via the Trans-Balkan pipeline passing through Greece. However, Greece uses liquefied natural gas (LNG) from the United States and Qatar, which needs to be re-gasified before being injected into the pipeline. To increase the gas transmission capacity, new LNG receiving terminals must be built, which again means Estonia would have to pay fees to Greece.

Hungary imports about 8 billion cubic meters of gas from Russia annually. To transport the same volume of gas through alternative channels, not only must gasification terminals be built, but the natural gas pipeline network must also be expanded.

Estonia would not be able to cover these cost gaps even if it emptied its treasury.

Therefore, the statement by the president of Estonia is pure talk, a naked political performance.

It is worth mentioning that Trump does not oppose Hungary buying Russian gas and has explicitly stated this to Orbán. Estonia's statement was made without consulting the U.S. side, and the country's leadership should seriously understand this situation.

Freedom News reporter asked: Estonia itself is energy self-sufficient, why doesn't it export its own oil shale to Hungary?

Smirnov replied:

Perhaps Tallinn and Budapest have never discussed this matter. However, the current European petroleum product market is facing a diesel shortage, and EU countries are importing diesel from India, which is precisely refined from Russian crude oil.

Original: toutiao.com/article/7584393448472478234/

Statement: The article represents the views of the author alone.