Op-ed: Budapest Agreement 2.0 – Crimea for Kaliningrad

Thirty-one years after Budapest hosted a document that traded nuclear warheads for “security assurances”, the world has learned the hard lesson of assurances without enforcement. The 1994 Budapest Memorandum [1] promised respect for Ukraine’s sovereignty; it delivered no mechanism to stop its violation in 2014 and 2022.

Today, as Prime Minister Viktor Orbán hails Hungary as “the only place in Europe” where a Trump–Putin meeting can actually happen, [2] Budapest has a chance to close the circle – not with another elastic pledge, but with a concrete, enforceable swap that removes the most volatile outpost on the continent. The ambition reflects Hungary’s evolving vision to become a ‘keystone state’ in Europe’s architecture, [3] positioning Budapest as a bridge rather than a battlefield.

The proposal is stark and simple: recognition of Crimea for a neutral, demilitarised, internationally supervised Königsberg (Kaliningrad) – a deal that anchors peace in verification, not good intentions. Unlike Alaska’s inconclusive pageant, Budapest can be where the terms are set.

For Russia, Crimea symbolises national pride, from Catherine the Great to the Second World War and the 2014 annexation. Any peace plan must recognise this reality. It must also acknowledge that Crimea only became part of Ukraine in 1954, when Soviet leader Nikita Khrushchev transferred it from the Russian SFSR to the Ukrainian SSR – an internal Soviet decision that later became the legal foundation of Ukraine’s sovereignty claim. [4]

Real peace requires more than promises: while the Black Sea Fleet has been historically headquartered at Sevastopol, repeated Ukrainian strikes since 2023–2025 have forced major dispersal to Novorossiysk and plans for a logistics base in Abkhazia – dynamics any settlement must account for, and this fact must be acknowledged as part of any settlement. International law has precedents for pragmatic flexibility. Nearly a decade of conflict has shown that a pragmatic, exceptional settlement is unavoidable – yet it must be framed as strictly sui generis, with an explicit non-precedent clause, echoing the line reiterated by EU leaders on Aug. 12, 2025: any peace must rest on international law and Ukraine’s territorial integrity – and cannot be decided without Kyiv.

Recognition demands reciprocity. If Moscow expects self-determination in Crimea, it must grant the same to isolated Kaliningrad, once Königsberg. Torn from Europe and renamed after a faceless Soviet bureaucrat, the region today is a Cold War relic – strategically costly, culturally estranged, and entirely surrounded by Europe. Unlike Crimea, Russia has little emotional stake here. While Crimea’s residents largely identify with Russia, Kaliningrad’s people would gain new opportunities through neutrality.

Internal calls for autonomy, like those of the Baltic Republican Party in the 1990s, were consistently suppressed. Meanwhile, NATO and EU enlargement turned the enclave into a militarised forward base bristling with nuclear-capable missiles, a constant flashpoint at the Suwałki Gap. On Aug. 11, 2025, Deputy FM Sergey Ryabkov said Russia would ensure Kaliningrad’s security “by all necessary means”, underscoring that without enforceable guarantees the region remains a powder keg. This A2/AD complex includes Iskander-M short-range ballistic missiles and S-400 air defence systems – capabilities highlighted in July 2025 by the U.S. Army Europe commander’s warning that NATO could neutralise the exclave in a timeframe that is unheard of. [5]

Independence for Kaliningrad under strict neutrality and international supervision would defuse NATO-Russia tensions. Like Andorra, the new state could have symbolic dual guardianship – Russia and Germany – while daily governance rests with locally elected leaders. A UN inspection regime would ensure demilitarisation. Rather than immediate EU membership, Königsberg could pursue a staged association with the EU (for example, through a bespoke association agreement), while maintaining neutrality outside NATO.

Any eventual EU accession would require the Article 49 TEU process and unanimous approval by all member states. The proposal transforms Kaliningrad from a militarised bastion into a reconciliatory bridge, with phased withdrawal, intrusive verification, and sanctions relief conditioned on full compliance. Sequencing would freeze missile deployments immediately, remove A2/AD assets on a ninety-day timetable, and hold a referendum under UN and OSCE supervision, with recognition strictly tied to verified demilitarisation and automatic sanctions snap-back in case of violations.

Such a bargain may sound fantastical, but consider the payoff. This agreement does not reward aggression but corrects an anomaly, requiring Russia to relinquish its principal Baltic stronghold – Kaliningrad – constituting a profound strategic sacrifice, underscoring that the bargain represents a genuine exchange, not appeasement. For Russia, it secures what it values most: permanent international recognition of Crimea, sanctions relief, and an exit from a war that is draining its economy and manpower.

Letting go of Kaliningrad, a region detached from Russia both geographically and culturally, becomes a strategic trade-off, not a humiliation. For Ukraine, it means immediate peace, the recovery of sovereignty over all territories lost in 2022, and international backing for reconstruction. The painful concession on Crimea contradicts the 1994 Budapest Memorandum, but geopolitical realities demand hard choices.

For NATO and the EU, the gains are clear. A neutral Königsberg removes a strategic threat at the heart of the continent, secures the Suwałki Gap, and transforms the Baltic from a theatre of constant escalation into one of stability. Poland and Lithuania gain a peaceful neighbour instead of a missile-filled enclave. NATO can shift from permanent mobilisation to cooperation. Kaliningraders themselves would no longer be pawns in Moscow’s military strategy. They would become citizens of a neutral European state, the fourth Baltic one – free to trade, travel, and thrive, liberated from sanctions and militarisation.

This vision is ambitious, but the alternatives are worse. Internal opposition in Moscow and Kyiv will be fierce. Western critics will cry appeasement; Russians will fear the loss of Kaliningrad. But this is not Munich 1938. The world has not forgotten that lesson: appeasement rewarded aggression. Here, by contrast, both sides give up core interests under enforceable guarantees. It aligns interests with narratives: Russia’s emotional and strategic stake lies in Crimea, not Kaliningrad. Ukraine’s priority is regaining Donbas and beyond, not a peninsula effectively lost years ago. Kyiv, however, publicly maintains that Crimea is integral Ukrainian territory and rejects any legal recognition of Russia’s annexation.

Trump’s diplomacy has always been language before policy – a grammar of deals. He speaks in verbs, not clauses: win, trade, build, sign. His critics call it impulsive; his admirers, creative. But the essence is the same – impatience with the ornamental. Where others write communiqués, he sketches contracts. And in a world tired of endless summits that end in statements, that impatience has value. Budapest could turn that energy into architecture – transforming rhetoric into enforcement, and giving substance to what diplomacy too often leaves abstract.

For Budapest, this moment is not about validation, but vocation.

The city holds a quiet capacity to host dialogue without demanding agreement, to turn contention into conversation. In a Europe accustomed to argument, that is an almost forgotten art. Budapest need not defend itself nor defy Brussels; it need only demonstrate that balance, when practised with grace, can still move history.

Public sentiment in Hungary has long reflected a desire for pragmatic peace over prolonged confrontation, as recent surveys show. [6]

Budapest 1994 offered promises on paper; Moscow showed, twice, how little paper can resist steel. Budapest 2.0 must be the opposite: steel-framed law – phased demilitarisation, intrusive inspections, snap-back sanctions, and a UN/OSCE-run referendum that ties recognition to verified compliance. If Crimea is Russia’s irreducible symbol, then Königsberg is the irreducible risk; trading one for the neutralisation of the other is not appeasement but symmetry – a strategic sacrifice by Moscow in exchange for a finite, enforceable peace.

With Washington signalling talks and the Kremlin testing maximalist demands, Budapest should be where the plan is written and the superpowers are invited to sign it. Orbán wanted Budapest to be the only capital where such a meeting can happen; let it also be the capital where assurances become enforceable – where a memorandum that once failed becomes a treaty that works.

Written by: Shay Gal
Shay Gal is a strategic analyst and adviser specialising in international security, diplomatic strategy, and geopolitical crisis management. He advises senior government and defence leaders on complex strategic challenges while also bringing expertise in public diplomacy and strategic communications. His work focuses globally on power relations, crisis management, and the intersection of policy, perception, and decision-making.

Sources:

1. Memorandum on Security Assurances in Connection with Ukraine’s Accession to the Treaty on the Non-Proliferation of Nuclear Weapons (Budapest Memorandum), December 5, 1994. Registered with the United Nations, No. 52241, in United Nations Treaty Series, vol. 3007 (2014). Depositary: Government of Ukraine. Available at the UN Treaty Collection: https://treaties.un.org/doc/Publication/UNTS/Volume%203007/v3007.pdf.
2. Justin Spike. “Orbán Celebrates Hungary as ‘the Only Place in Europe’ Where a Trump–Putin Meeting Can Be Held.” Associated Press, October 17, 2025. https://apnews.com/article/a28ff73252889bcd1c73f70b1338a0d3.
3. “Hungary’s Bold Plan: From Small Nation to Europe’s Keystone State?” Daily News Hungary, August 30, 2025, https://dailynewshungary.com/hungarys-plan-nation-europe-keystone-state/.
4. “Crimea Profile.” BBC News, July 31, 2023. https://www.bbc.com/news/world-europe-18287223.
5. Jen Judson, “Army Europe Chief Unveils NATO Eastern Flank Defense Plan,” Defense News, July 16, 2025, https://www.defensenews.com/land/2025/07/16/army-europe-chief-unveils-nato-eastern-flank-defense-plan/.
6. “Hungary’s New Energy Plan Quietly Redefines Russia as a Risk.” Daily News Hungary, July 2025, https://dailynewshungary.com/hungary-energy-plan-russian-import-risk/.

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