Hungary threatened to veto Bulgaria's entry into the EU's passport-free Schengen Zone if Sofia does not scrap its transit tax on Russian gas, Reuters reported on Dec. 16, citing Hungarian Foreign Minister Peter Szijjarto.
Budapest is known for its amicable stances toward Moscow, and the majority of Hungarian gas supplies come from Russia.
Bulgaria imposed a transit tax on Russian gas in October, threatening to increase the prices of Hungarian imports flowing via the Turkish Stream pipeline.
"We have made it clear to the Bulgarians that if they keep this in place for long, if they jeopardize the safety of Hungary's energy supply for long, then we will veto their Schengen entry," Szijjarto said.
Hungary's top diplomat promised that the veto would be lifted as soon as the tax is removed.
In a bid to enter the much-desired Schengen Zone, the Bulgarian ruling coalition decided to suspend the tax earlier this week following discussions with the European Commission, at least until the EU presents a better solution.
"This tax shouldn't be unilateral from Bulgaria's side, but we should work with the European Commission. Such a tax can only be imposed with all European countries, in a way that would actually have an effect on the economy and on the Russian Federation," said Kiril Petkov, a former Bulgarian prime minister and a leader of the ruling PP party.
Boyko Borisov, another ex-prime minister and the leader of the PP's coalition partner GERB, commented that "since we are quite close to Schengen, any possibility of this fee hindering us should be removed."
Both Serbia and Hungary complained about the risk of higher gas prices when the measure was originally presented in October. Sofia retorted that the costs should be covered by Russia's state-owned gas supplier Gazprom.
Euractiv reported that despite Bulgaria's initial expectations to raise $1.3 billion per year, no money has been collected so far.
Budapest has repeatedly obstructed sanctions against Russia or blocked aid for Ukraine within the EU to leverage economic concessions.
During the recent European Council summit, Hungarian Prime Minister Viktor Orban blocked the $55 billion for Kyiv, but his abstention allowed an agreement on membership talks with Ukraine shortly after the European Commission released $11 billion in EU funds earmarked for Hungary.