Russia defies EU: Rosatom continues Paks 2 project despite CJEU ruling

Russia, through nuclear giant Rosatom, announced late last week that it is not stopping the Paks 2 project in Hungary, according to press reports in Budapest and Moscow, despite Thursday's ruling by the Court of Justice of the European Union, which annulled the European Commission's 2017 approval for the financing and construction of the two new nuclear reactors.

In an official statement quoted by the Hungarian website Mandiner and the Russian publication Kommersant, Rosatom stressed that the project is moving forward, being considered essential for Hungary's energy security and reducing its dependence on imports, and promised to comply with the highest international safety standards. The announcement also confirms the line already announced last month by Rosatom Director General Aleksei Likhachov, who spoke of starting work in November, after several Russian banks were removed from the sanctions list, thus creating space for financing the 10 billion euro investment.

The CJEU ruling, delivered on Thursday, following the complaint filed by Austria, represents a major blow to the government led by Viktor Orban. The court established that Brussels erred in approving the project without reservations, without analyzing whether the direct award of the contract to the Russian company Nizhny Novgorod Engineering complies with European legislation on transparency and competition. By annulling this approval, the European legitimacy that Budapest has relied on until now disappears, and Hungary is forced to resume the authorization process and answer uncomfortable questions related to public procurement, sources of financing and its strategic relationship with Moscow.

For the Hungarian government, the verdict comes as a bitter surprise, especially after Foreign Minister Peter Szijjarto celebrated a favorable decision by the EU Court of Justice in 2022 as a huge victory and proof that the project had European legitimacy. That legitimacy has now been shattered, and Budapest finds itself caught in an increasingly visible tension between Brussels and Moscow. The CJEU warned that the lack of a transparent procurement procedure could affect both the investment costs and the characteristics of the infrastructure, raising suspicions of unjustified advantages granted to a single supplier. Moreover, the bilateral agreement between Hungary and Russia is not limited to the construction of the reactors, but also includes a state loan provided by Moscow, which deepens fears of financial dependence and geopolitical risks.

Faced with this situation, expert Vladimir Demidov told Kommersant that the European Union wants to force Hungary to change its nuclear fuel supplier, switching to Canadian or American ones, but such a change is extremely difficult and would take at least three to four years, during which time Budapest would not have the capacity to cover its energy needs.

From a geographical and logistical point of view, Hungary has limited access to alternative sources, and the current infrastructure does not allow for massive imports from other directions. Under these conditions, Paks 2 is seen by the Budapest government as the only solution for maintaining relative energy independence, even if this is built on a controversial relationship with Russia.

Thus, what is emerging is not just a legal dispute, but a full-fledged geopolitical conflict: Brussels is trying to limit Moscow's influence and impose strict rules on transparency and competition, while Hungary chooses to defend its right to decide on its own energy future, even at the cost of isolation within the European Union. Paks 2 becomes, through Thursday's decision and Rosatom's immediate reaction, the symbol of a major confrontation that will define not only Budapest's relationship with Brussels and Moscow, but also the rules according to which major nuclear projects will be carried out throughout the European Union.