Bilateral ties between Hungary and the UK have become of a different order of magnitude following Brexit, UK Ambassador to Hungary Paul Fox tells Diplomacy &Trade. Despite political differences over the war in Ukraine and Sweden’s NATO accession, the two countries are enjoying a more direct relationship and economic cooperation is growing dynamically.
The Ambassador took up his current posting over two and half years ago, during which time he has travelled to all corners of Hungary. “Being stuck in the capital all the time is not how one gets to know Hungary. One of my predecessors used to say that Budapest is not Hungary, and Hungary is not Budapest. This definitely has a ring of truth to it. I have travelled throughout the country to understand what Hungary is really like, that is one of the practical ways of achieving my mission here,” he says in an interview.
A deep love for the region
Paul Fox has represented the UK in several countries, some in this region. In fact, his previous post before coming to Budapest was Moscow where he worked as Minister Councilor. “It was a difficult posting as it was right after the attack on British citizens by members of the Russian intelligence services and bilateral relations were at a difficult point,” the Ambassador remembers. He also served as Deputy Ambassador in Poland and many years ago, as Deputy Ambassador in Azerbaijan, not long after the collapse of the Soviet Union. “I have quite a strong feel for this region. It really started at university; at Oxford, I did a Masters in Russian and Eastern European studies and I did a doctorate in Russian history. There is a deep love in me for this region that goes back many years. Given all that experience, I view Hungary in a regional context, as part of Central Europe. Even though each country in the region is very different, there are common themes and being able to place Hungary within this regional context is very important.”
As part of efforts to foster an even deeper dialogue between the UK and Hungary, the Embassy helped bring to life the Chain Bridge Forum in April. It was the first UK-Hungary bilateral forum, organized jointly by the Hungarian Institute of International Affairs and the British Embassy Budapest in partnership with the UK’s Royal United Services Institute and the British Council. It served as a great opportunity for representatives of government, civil society, and think tanks to exchange ideas and best practices. “We focused on three main areas: security, especially regional security in light of the war in Ukraine, prosperity where we looked at ways in which the private sectors of the two countries could work together to improve prosperity. And thirdly, people-to-people relations, where we primarily focused on how we could improve educational ties, which has become a bit of a challenge since the UK left the European Union,” Paul Fox says. As the UK is no longer a member of the Erasmus program and Hungarian students cannot travel as freely to the UK as before, the two sides need to come up with solutions to overcome these challenges. Participants also looked at various ways for civil society organizations to work together. As part of the Roma Outreach initiative, for instance, people from the UK who are dealing with their own Roma communities compared and exchanged experiences with Hungarian counterparts. “I see the bolstering of relations between the civil societies of the two countries as a growth area,” the Ambassador adds.
Brexit and points of difference
With the UK’s departure from the European Union, the country’s role within Europe has changed dramatically, Paul Fox says. “Even though what I am going to say may sound as a cliché, it has the merit of being true: We left the EU but we did not leave Europe. We are still a European power and Europe is still our continent,” the Ambassador stresses. As the UK is no longer member of the single market and the customs union and limitations on the freedom of movement of people have come into play, “a degree of friction” has emerged that needs to be overcome. “What we are trying to do is to remove as much friction as possible, whether it be in terms of commercial or people-to-people relationships while respecting the decision of the British people to leave the EU,” Ambassador Fox says.
As a practical manifestation of these changes, bilateral relationships have become more important. “We no longer meet and discuss business in Brussels, as we used to do; we do that now in the various capitals. Our bilateral relations with Hungary are of a different order of magnitude. It’s a thicker, more complex, more energetic relationship as a result of the UK leaving the EU.” Nevertheless, contentious issues do arise, among which the two countries’ differing approach to the war in Ukraine and obstacles to the expansion NATO take center stage.
“The most immediate issue we have is over NATO because the UK wants to see Sweden join as soon as possible and Hungary is one of two countries not having ratified Sweden’s accession to NATO. We want to encourage the Hungarian government to ratify this as soon as possible, certainly, before the NATO summit in Vilnius scheduled for July,” the Ambassador says.
The war in Ukraine is yet another area where the two countries do not see eye to eye. “The United Kingdom is a very staunch supporter of Ukraine and we will continue to be a staunch supporter of Ukraine. Hungary has taken a different approach. Being so close to Ukraine and worried about escalation, Hungary has advocated a peace narrative, which involves an immediate ceasefire. We are going to disagree on that as we see things from a different perspective. However, this will not undermine the entire relationship,” Paul Fox notes.
The UK wants to ensure that Ukraine is “in the strongest possible position when things come to a settlement” and an immediate ceasefire now would not guarantee that as Russia is in possession of 20% of the country. “We do not see this conflict as a war between Russia and the West or a proxy war between NATO and the Russian armed forces. This is simply a case of a sovereign country whose sovereignty has been infringed through unprovoked aggression. Hungary has, of course, a different interpretation.”
Dynamic economic relations
The value of trade between the UK and Hungary amounts to roughly GBP 6 billion a year and this has increased to GBP 7 billion in 2022. A large array of UK companies have operations in Hungary, such as Tesco, GlaxoSmithKline, Unilever, BT, and Diageo, securing employment to about 55,000 Hungarians. Naturally, there are Hungarian companies established in the UK, WizzAir and property developer Cordia being the most noteworthy. “Overall, it’s a vibrant economic relationship that is growing, but there is room for more growth. Energy is one area that could definitely boost bilateral economic ties as Hungary is keen to diversify its energy supply in order to improve energy security,” Paul Fox says. For instance, the Ambassador has been active in helping Rolls Royce explain its offer for small-module reactors, which are mini nuclear power plants, to the Hungarian side. Health care as well as defense and security are further areas where cooperation could be deepened, according to the top diplomat.
“The challenge is raising Hungary’s profile because exporters in the UK are still going for the obvious targets: Ireland, France, and Germany, countries that are close and have large markets. However, there are huge opportunities, not only in Hungary but in the eastern flank of the continent in general.”
Freedom of movement limitations
Ambassador Fox concedes that moving to the UK for study or employment is “definitely not as easy as it was” for Hungarians in the aftermath of Brexit. “My job is to keep on promoting people-to-people relationships and keep bolstering them through the work of the British Council and various cultural exchanges,” the ambassador notes.
Tourism does not seem to have taken a hit from the UK’s departure from the EU, as there are about 700,000 British people visiting Hungary every year and large numbers of Hungarians are travelling to the UK. “My country remains keen on attracting the right kind of skills into the local economy; in that sense we remain open to getting talent from this part of the world into the country,” Paul Fox concludes.
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