Hungary threatens to block Bulgaria’s entry into the Schengen area

BUDAPEST (Reuters) – Hungary will veto Bulgaria’s entry into the Schengen area unless it removes a transit tax on Russian gas, Hungary’s foreign ministry said on Saturday.

The threat follows Thursday’s agreement among the 27 member states of the European Union, excluding Hungary, to open accession talks with Ukraine despite the Russian invasion.

Hungarian Prime Minister Viktor Orbán’s opposition in Brussels allowed him to score some points in Moscow, with which his nationalist government maintained regular contacts even during the war in Ukraine and which still supplies landlocked Hungary with most of its gas.

Citing Foreign Minister Peter Szijjártó, the ministry said Hungary had made it clear to Bulgaria that it would veto its entry if the tax on Hungary’s main gas import route was maintained.

“We have made it clear to the Bulgarians that if they maintain this tax for a long time, if they threaten the security of Hungarian energy supplies for a long time, we will veto their entry into the Schengen area,” said Peter Szijjártó.

He added that Hungary would lift its veto once the transit tax was abolished.

While Western European countries made great efforts to wean themselves off Russian gas, Hungary received 4.5 billion cubic meters of gas per year from Russia under an agreement signed in 2021, mainly via Bulgaria and Serbia.

Peter Szijjártó said that Bulgaria’s decision, which he says is in conflict with European regulations, threatens the security of supplies not only in Hungary, but also in Serbia and North Macedonia.

“While the tax aims to reduce profits for Gazprom, which would have to bear the costs under gas supply agreements, it could still lead to transit disruption and/or higher costs for gas-receiving countries,” UniCredit economists said in a note.

(Reporting by Gergely Szakacs; Writing by Alison Williams and Giles Elgood, French version by Benjamin Mallet)