📩 Fico's bluff

DEAR READER,

As everyone is bracing for the January 20 inauguration, there’s a lot going on in Central and Eastern Europe. While last week’s big thing was the renewed Kursk offensive, we haven’t heard much about any advancements. However, Ukraine is still in the spotlight, as both Trump and Mike Waltz suggested talks with Putin could happen soon. Waltz said that a ceasefire must be the first step, but it makes us think of a number of ceasefires that were breached by Russia since 2014. Maybe we should bring the word “naïveté” back from last week’s edition.

For our main story, we are going to Slovakia. Starting this year, Ukraine stopped all gas transits from Russia, and this has not been met well by Robert Fico. We asked Jakub Ferenčík, a journalist at Radio Prague International to give us an overview on what’s going on and how the EU has responded.

Also, if you are in Krakow this weekend, make sure to join our protest in support of Georgia on Saturday, January 18 at 16:00. You can find the event here. Not in Krakow? Feel free to share it with your friends who would like to attend.

Lastly, while the Talk Eastern Europe team takes a break, do check out the VoiCEE podcast below — highly recommended by us!

Enjoy reading this week’s “brief”!

— Giorgi Beroshvili, Editor

Slovak Prime Minister Robert Fico’s position on Ukraine’s planned decision to not renew its contract with Gazprom in 2025 has not been a secret. For weeks now, and especially since his secret trip to Moscow, Fico has made his stance crystal clear: he will do anything – even meet with the Russian president and, more recently, threaten to halt electricity exports to Ukraine – to signal to Western partners that he is unwilling to budge.

In a recent video he made for his social media pages, Fico defended the trip to Russia, stating that Ukraine’s decision “emphatically financially hurts Slovakia and the EU.” The truth is that, as most analysts argue, the decision not to renew the contract with Gazprom will not harm the EU or the gas storage of land-locked EU countries that were dependent on it before. According to data from Gas Infrastructure Europe, Slovakia's reserves are over 75% full, exceeding the seasonal average, while Hungary's reserves are at approximately 68%.

That said, Slovakia will be losing tens of millions of euros in transit fees. To be fair, this will cause some economic loss since Slovakia is a transit country, and to a small extent relies on transit fees. But the loss is far from disastrous, or unexpected. The GLOBSEC economist Vladimír Vaňo said that Slovakia has been preparing for this moment since the beginning of the full-scale invasion. Similarly, Ukraine also benefited from transfer fees. While Russia has made billions of euros in revenue since the full-scale invasion through the pipeline, estimates claim that Ukraine has made close to a billion in transit fees. Yet, Ukrainian leadership can make that trade-off, while Fico seemingly can’t.

Ukraine has given Slovakia time and opportunity to gain its energy resources from other neighboring nations. Volodymyr Zelensky also offered to compensate Fico for his losses. And, indeed, the EU has made it abundantly clear that it is ready to help Austria, Hungary, and Slovakia – three countries that have been more vocally opposed to Ukraine’s move – in the months and years to come as the bloc transitions from Russian energy supplies. For example, Germany agreed to waive transit fees for the neighboring land-locked countries. Czech Minister of Industry and Trade Lukáš Vlček offered to help to overcome any difficulties if they arose: “If Slovakia needs assistance, Czechia, with its gas infrastructure, is ready to help.”

Still, it should not come as a complete surprise that Fico is looking to profit wherever he can. At the same time, Fico needs resources from the EU. So, the EU can demonstrate to Slovakia that a close partnership with Russia, rather than with the EU, is far less beneficial. On January 1, the EU announced its decision to withhold 1 billion euros in structural funds for Hungary “due to rule of law breaches.” This is the first time the EU has enforced such strong measures. With its economic woes, Slovakia cannot afford to make the same mistakes as its Visegrád neighbor.

— Jakub Ferenčík, Journalist at Radio Prague International

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