In Geopolitics Today - Monday, September 27th
German Elections Bring the Country to the Centre and Hungary Signs Major Gas Deal with Russia's Gazprom
German Elections Bring the Country to the Centre
Early results from the German Federal Election indicate that the Social Democrats (SPD) will narrowly beat the Christian Democratic Union (CDU). With no party securing enough seats for a majority, the weeks ahead will see attempts by both mainstream parties to form a government. While the composition of Germany’s next government is still an unknown, there are already some conclusions that can be drawn from the outcome of the federal election which just took place.
It was not long after polling closed that the leaders of both the SDP and CDU claimed they were ready to take up the chancellorship of Germany. The confidence of both Olaf Scholz and Armin Laschet was justified, both leaders are well-positioned to take up the role. Because preliminary election results show Germany’s two major parties in a close race, support from either the Greens or the Free Democratic Party to either mainstream party would be enough to secure a majority in the Bundestag.
The results so far indicate that the CDU is on track for its worst result since the party’s founding in 1945. The right-wing populist party Alternative for Germany failed to garner enough votes to be part of any discussions over the formation of a new government. The left-wing party Die Linke may end up below the 5 percent threshold needed to sit in the Bundestag, while the Greens appear to have fallen short of their original aim of taking the chancellery. The formational of a new government in Europe’s largest economy will be keenly watched internationally, and may present turns in German policy abroad.
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Hungary Signs Major Gas Deal with Russia's Gazprom
As temperatures fall and natural gas prices surge across Europe, Hungary has sought to secure a long-term energy deal with Russia. The deal was penned at the Hungarian Foreign Ministry, and will see Gazprom supply natural gas to Hungary for the next 15 years. Hungary's foreign minister has described the deal as a flexible one, stating that Hungary may after 10 years exercise the option to change the amount the country purchases.
Hungarian Foreign Minister Peter Szijjarto insisted that the agreement is vital Hungary’s national security. At the same time, Szijjarto accused Ukraine of interfering in Hungarian internal affairs after Kyiv called the deal a "purely political, economically unreasonable decision." The agreement which secures the transit of Russian gas via Ukrainian pipelines is coming to an end, and so Ukraine stands to lose millions in transit payments. Russia has been able to achieve this by shifting the transit of its gas away from Ukraine and to the Nord Stream, Nord Stream 2, and TurkStream pipelines.
Hungary has also made investments in diversifying its energy imports and will be happy to secure gas supplies as prices soar and winter approaches. The deal, going into effect October 1, promises deliveries via Serbia and Austria. While the pricing of gas under the agreement has not been made public, Szijjarto described the price as "much more favourable" than the previous 1996 deal. Russia has been a long-time supplier of gas to Hungary, and the new agreement with Gazprom means that energy relationship is set to continue until at least 2036.
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