Hungary gives financial support to the Bosnian Serbs and opposes sanctions against their leader Milorad Dodik, Prime Minister Viktor Orban said in response to a question from BIRN at a three-hour-long press conference in Budapest, a rare occasion on which he took critical questions.

Orban described Serbia and Bosnia’s Serb-dominated entity Republika Srpska as “key to the stability of the Western Balkans” and urged the new German government to integrate the region into the EU rather than punish it, which “could lead to even bigger problems”.

Orban threw his full support behind the Bosnian Serb leader, calling him a democratically-elected politician and warning Western powers that the “exorcism of Dodik”, who has repeatedly threatened to secede from Bosnia and Herzegovina, would be dangerous.

“Let me point out that the Bosnian border is only 70 to 80 kilometres from our southern border, and any conflict could spill over to Hungary,” he said.

In response to BIRN’s question, Orban confirmed that the Hungarian government provides 100 million euros in financial assistance to Republika Srpska as part of Hungary’s Responsible Neighbourhood policy to enhance stability in the region.

The money is intended to be used to fund small and medium-sized companies in the country. Radio Free Europe has reported that analysts in the region fear that the money will be used to help Dodik’s political aims.

Orban, whose government paid little attention to Bosnia for years, has intensified ties with Dodik since 2019.

The Hungarian prime minister paid a surprise visit to Republik Srpska in mid-November, in the middle of a crisis caused by Dodik’s threats to pull the entity out of Bosnia’s state-level military, judicial and tax system.

Orban also invited Dodik, a pariah for many Western European governments, to attend the 4th Demographic Summit in Budapest in September, an event that has turned into an annual get-together of illiberal leaders and far-right forces from the region and Western Europe.

Orban’s November visit to Banja Luka and to Dodik’s hometown of Laktasi triggered speculation about Hungary’s agenda. Some experts wondered whether besides being an ally of Russian President Vladimir Putin and Serbian President Alexandar Vucic, the Hungarian leadership has secret business interests in Bosnia or whether Orban is seeking more political clients in the region.

Orban’s comments echoed Hungarian Foreign Minister Peter Szijjarto, who has already threatened to veto any EU sanctions against Dodik. The move is also seen as a direct challenge to the new German government, which wants to abolish the requirement for unanimity in EU foreign policy decisions.

Szijjarto’s warning came five days after the EU’s foreign ministers’ meeting on December 13, where Germany’s new Foreign Minister, Annalena Baerbock, called for sanctions against Dodik over his moves towards secession.

Baerbock said that Bosnian Serb “efforts to break away [from Bosnia] are unacceptable, and this means, too – and I have lobbied for this here — that the existing sanctions regime should also be used against Dodik”. Baerbock’s predecessor Heiko Maas, had already called for sanctions in November.

Szijjarto later responded: “Hungary will not give its support to any sanctions against the leader of the Bosnian Serb, Milorad Dodik. If there is such a proposal, we will veto it in the European Council.”

At present, unanimity is needed in EU foreign policy decisions, and it is unlikely that a proposal to sanction Dodik would be approved by all 27 EU member states.

But the new German government is pushing for a change to qualified majority voting. This would strip individual countries of their veto rights, a tool often used by Hungary to block joint EU positions.