Zsolt Törőcsik: This week it emerged that the Government is launching a national consultation on the Brussels sanctions and their impact. The reasoning is that it’s important to listen to people’s views because they’re the ones who are facing the consequences of the EU’s punitive measures against Moscow. Our guest in the studio is Prime Minister Viktor Orbán. Good morning.
At times like this, when one hears the news about the consultation, one inevitably asks oneself how much the answer to a particular question in a particular questionnaire is worth in this geopolitical game. Because if we look at the big picture, that is after all what this is about.
People theorise a great deal about politics; but it’s a discipline based on experience, and so if you have experience it’s best to use it. There have been difficult periods – even crisis periods – in the last twelve years of our government; this is because in the early 2010s we inherited an economic crisis, and then we had a migration crisis, which posed serious dilemmas, and then there was the COVID crisis. And over these twelve years what I’ve learnt and experienced is that it’s best to involve people in decision-making in some way. Because in politics there are decisions on which you simply have to make the right professional decision. An economic issue or a budget item is more an area of expertise; but there are also issues such as migration – who we will be living alongside in Hungary for the next several generations – or COVID, how it should be handled, and what society can withstand. In such cases it’s good if we can involve people in the decision in some way. There are several ways of doing this: a referendum is one, but so is a national consultation. Legally this is the most flexible form, and this is why in such a situation we use a national consultation. It’s not that I don’t have an opinion on the sanctions and on Hungary’s national interest in this respect; I do have an opinion on this, and for this very reason I’ll fill in the consultation form. But the question now is not whether the Government has an opinion, but whether we can bring about a point of agreement; because the more difficult and crisis-stricken the period we find ourselves in, the greater the need for unity. And unity doesn’t come about by itself. It’s often said that consensus has to be sought, but it’s not an Easter egg to be hunted for: it has to be created. So consensus has to be created, people have to be given the chance to agree or to express their dissent. We have to find forms for this. The national consultation has been one of the most successful national strategic governance instruments of the last twelve years. These are difficult times, and we need a national consultation.
It’s interesting to consider whether it’s necessary, because there are governments that have chosen a different path. German foreign minister Annalena Baerbock has flatly announced that she doesn’t care what her voters think: she wants to deliver on what she’s promised to Ukraine.
We’re not all the same. To each their own. One can do that in Germany, where they have different political traditions; but we are Hungarians. If any member of the Hungarian government – including myself – said something like that, I don’t think they’d have much of a future in public life. So we can’t do that. As far as I can see, in Germany they don’t even raise an eyebrow. They’re used to different things, and they have a different history. But in Hungary you can’t do that, and in Hungary it would be considered disrespectful. Perhaps in Germany it sounds as if she knows better. Somehow in Hungary people interpret that differently. This is because people are paying the price of the sanctions policy, with a sanctions-induced surcharge when we buy natural gas, electricity, oil or petrol, and the people of Europe – including Hungarians – are paying a sanctions-induced surcharge. And the price of energy has not risen due to economic reasons. Incidentally there have been times in the world when the price of energy was driven up by interrelationships within the economy, by supply and demand. But this isn’t the case here: here we’re taking political decisions, with political decisions being taken in Brussels. It’s these decisions – which are political in nature, because they’re taken by politicians – which have driven up the price. If there were no sanctions, the price of energy would be somewhere around the level it was at, say, during the April election [in Hungary] and during our election campaign: somewhere around $100 a barrel. This isn’t a good price, because it’s usually lower than that, but at the time of the election we expected that the price of oil and gas would stabilise at around $100, and that this would be a manageable situation, one that could be managed without changing the rules on household utility bills. And that’s what we agreed in Brussels, by the way: that we wouldn’t extend the sanctions to energy. There was a summit before the election – perhaps in Versailles. If I may use the words “elephant’’ and “mouse” in the same sentence, at that summit the Germans and Hungary were the two strongest parties leading the group that didn’t want to extend sanctions to energy. And back then that is what we agreed on. And then suddenly in June the Germans switched over and changed their decision in Brussels. So all of a sudden the sanctions on oil were introduced, and sanctions on gas were put on the agenda. And energy prices have skyrocketed. Since then we’ve been paying this sanctions-induced surcharge. This has also meant that the system of reductions in household utility bills in Hungary has had to be changed, that price freezes have had to be introduced, and that everyone is dividing, multiplying and calculating, because they – both businesses and families – rightly feel uncertain about the coming months. The Government is trying to help. This is the new situation. The question now is whether we’re going to make this situation worse, because in Brussels they want to introduce ever more sanctions. We’ve already been cheated once. I’ll try to express myself more elegantly now, but the truth is that the people of Europe were lied to by Brussels, who said that the sanctions wouldn’t be extended to energy – and then they were extended. They also said that the sanctions would end the war. The war is dragging on, and today no one is expecting a quick end; meanwhile prices are sky high, and while this is tormenting ordinary people, the speculators are rubbing their hands.
It’s interesting, by the way, that, as you’ve said, the communication from Brussels was that the sanctions should be extended and new ones should be continuously introduced, because that would end the war. Even when they started talking about energy sanctions, the experts had no impact assessments. Have you seen anything like that? Have you seen – even at meetings of heads of state and government – calculations of who will be hurt and how much?
We haven’t seen any, but the truth is that I haven’t been that interested in them, because I saw the connection very clearly: if we start to float the question of whether we impose sanctions on gas and actually impose them on oil, there will be only one consequence – and to see that you don’t need to be a nuclear scientist. The consequence is that, in no time at all, prices – energy prices – will start to rise. In such a situation everyone makes a move: traders see a new opportunity and sellers adapt to this by producing more or less. So in such a situation everyone makes a move. And because there are large sums of money moving around – and energy companies are the biggest profit-making companies in the world – there are huge forces at work to adapt to the higher price that they’ve assumed. And that itself drives up the price. The speculators, as I said, starting with George Soros, are now known to be big shareholders in energy companies, who are making billions in massive extra profits, ringing the cash register and collecting the money. I haven’t seen the need for more in-depth impact studies because we didn’t vote for those sanctions. Let that be the problem of whoever voted for them. We didn’t vote for them, but fought for – and got – exceptions and exemptions. So this was fortunate for us, because if Hungary hadn’t fought for this exception, the situation in Hungary would be much worse: we wouldn’t be protesting about prices, which are causing a lot of headaches, but the problem would be a lack of energy. Having been granted an exemption, however, in Hungary we have energy. The price is determined by the world market and we have to adapt to that. In an economic world where the price of energy is essentially the same everywhere in Europe, because we’re part of a single common market, we’re not able to up with a separate Hungarian price. When I saw that the Germans were switching over and the Brussels bureaucrats were pushing the sanctions through, we knew immediately – even without calculations – that energy prices would also lead to rising food prices. This is because man-made fertiliser requires natural gas, there are transport costs, and food production also requires energy. I knew that this would lead to a rise in food prices, with inflation accelerating. And there’s also been a drought here in our country, so farmers and the food industry are plagued by this new situation; and now we’re plagued by it, as shoppers in food stores. This is why the food price freeze had to be introduced. Right from the start we saw that we’d be forced to defend ourselves with such measures.
We’ll talk about the domestic situation in a moment, but let’s talk a little more about the economic situation in Europe. At the end of July, when we last spoke, you said that you saw October as the watershed, when we’d see whether the European economy would drift into a wartime economy. Tomorrow is 1 October, Brussels hasn’t changed its sanctions policy, and – as you’ve indicated – neither does the war seem to be coming to an end. How do you see this now?
I see that in our profession, in politics, it’s possible for mistakes to be made by decision-makers. There have even been occasions – as has just happened in Brussels – when they lie to the people of Europe, because they haven’t done what they undertook to do, and their measures haven’t brought the intended consequences. But these things can be corrected. Of course, in politics there are some mistakes that cannot be corrected. Now that I think about it, one such mistake relates to migration: once you let them in, you cannot send them out again. But that is the exception. Most bad political decisions can be corrected. One of those is the decision to impose sanctions. It can be corrected. And it’s important for us to have a voice. This isn’t only because we’re angry at having been cheated, and in such cases it’s good to give voice to one’s anger to deter decision-makers from doing something similar next time; but it’s also because if the sanctions policy isn’t changed, then this sanctions-induced surcharge that we’re paying today, which is temporary, will be built into the economy and will stay with us in the long term. So we’re not talking about a few months or a year of high energy prices. If we don’t protest, if we don’t effect a change in the sanctions policy in Brussels, then this surcharge that we pay for energy, that people pay for energy, will be built into the economy; and from then on it will be part of our lives for the next five to ten years. This is why I said that October is the watershed, because this is when we must make it clear that we don’t want this. There’s a summit in Prague in one week’s time, where the European prime ministers will be talking about this issue. And the nature of sanctions is that they’re not imposed for an indefinite period, but always for six months, so they have to be renewed every six months. This won’t happen now, but at some time in the coming months. And then, when the sanctions have to be renewed, there’s also the opportunity for the politicians in Brussels to see the error of their ways and to revise or review their own previous decisions.
You’ve pointed out that this war surcharge is built into everyday life and everyday prices, and indeed the Government has recently decided to extend the freeze on interest rates and on petrol and food prices. So do you see these measures as being effective? Because before the war, when they were introduced, critics argued that they would be unsustainable; but before long a year will have passed since then.
At such times the Government – and I personally – have two things to do. The first is for me to do everything I can to ensure that there’s energy in Hungary. This is why we’ve fought for an exemption from the sanctions decision, and this is why we’ve accelerated our procurement negotiations and mobilised a great deal of money in order to store energy – especially gas. Even if from tomorrow morning not a drop or a molecule were to come through the gas pipelines, everyone can feel reassured about the supply; because the situation today is that Hungary is capable of ensuring that the Hungarian economy will still be functioning as it is today for about four and a half to five months, and because we’ve stored up reserves we wouldn’t feel the effect. So I feel that the first task has been accomplished. The second task is to protect families, because in the meantime prices are rising in Hungary too. We’re in a single market, so prices are at European levels; but Hungarians don’t earn enough to make ends meet, and they need to be protected. Families must be protected, and businesses must also be protected, so that people have jobs; otherwise businesses will close down and there will be no jobs. Now, as far as protecting families is concerned, we’re using many instruments. There’s protection related to household utility bills. It’s hard for people to imagine, but I always say that on average families receive 181,000 forints a month in the form of reduced utility prices. So if the Government weren’t pursuing this policy, families would be paying an average of 181,000 forints more every month. What’s happening in the West? They’re trying to help there too, but let’s say we provide 30 per cent of average income as a subsidy, this compares to perhaps 20 per cent for the Germans and 6 per cent for the Austrians. So in terms of the protection system for families, the financial protection system, we’re far in the lead in Europe. The Hungarian budget can cope with this for the time being. I can say with certainty that we’ve coped with it this year, and I have good hopes that we’ll be able to maintain this system next year, in 2023. But we’ll still have a lot of work to do. In addition, we’ve launched the firewood programme, we’ve launched the lignite programme, we’ve introduced the fuel price freeze, the food price freeze and the interest rate freeze. This is the system that we’re using to protect families. Difficulties for businesses are now accumulating, so we’ve just launched a programme of 200 billion euros – a huge amount of money – in order to help small and medium-sized enterprises. Large factories are in trouble, large Hungarian-owned factories. If they fall out of the international supply chain, others elsewhere will immediately take their place; so it’s in our interest to keep Hungarian factories in the system for the international division of labour. For this they need help, so there will be a factory rescue programme for larger firms and larger employers. And if unemployment starts to rise because of the disruption in the business world – we don’t know if it will, but it’s by no means impossible – then we’ll need to immediately launch a jobs protection action plan. This is also being worked on. This is what can be done in this situation.
How can we plan – either from the point of view of public finances or the point of view of companies? Because one problem is that energy prices are high, but they’re also volatile. For example, over the last two days I’ve been looking at the price of gas on the Dutch gas exchange; and the day before yesterday it was at 207 euros, while yesterday it was only 187 euros. So its price curve is essentially following a zigzag course.
We’re trying to agree on payment methods with suppliers. This task has been assigned to the energy company MVM: Magyar Villamos Művek [Hungarian Electricity Works]. This company buys most of the energy coming into Hungary, and we’ve instructed them to find flexible payment solutions that adapt to this rapidly changing price level. At present it’s almost impossible to plan at the central budget level, so we’re being rather cautious: we’ll pay salaries and what’s absolutely necessary in October, but we’ll hold the rest of the money back. By the end of October I think the Finance Minister and I will see how the budget figures are shaping up, and I think we’ll be within the deficit limit that we’ve committed ourselves to. The more difficult case is next year, because to close out this year one only needs to look ahead three months, but next year involves an extra twelve months. That’s where the difficulty lies. We’ve also agreed to leave the budget legislation – the budget legislation for 2023 – as it is for now. We’ll sit down at the beginning of December, when we hope we’ll be able to see things with more clarity and certainty; and in December we’ll make the changes to next year’s budget that are demanded by the energy price fluctuations.
We talk a lot about the fact that when there are negative global economic trends – and especially inflationary effects – pensioners are particularly exposed. What can they expect from the Government?
In this uncertain situation there are some fixed points. One is the situation of pensioners. This is an important issue politically, or I would say morally; because we made an agreement with pensioners in 2010. It was twelve years ago, but if you recall in 2010 pensioners were suffering because the value of their pensions was constantly decreasing. They were deprived of their thirteenth month’s pension and weren’t being compensated for the depreciation in their income caused by price increases. And when we won the election in 2010 we made an agreement with pensioners that this government – this civic national government – would guarantee them that the value of their pensions would be protected. As the economy has done well over the last ten or more years, with the Government pursuing what I think has been successful economic policy, we’ve managed to generate enough money to not only protect the value of pensions, but to also restore the thirteenth month’s pension. So we’ve also been able to increase it. And I shall keep that promise: it’s an agreement, and I see it as a matter of honour. So pensioners will receive their thirteenth month’s pension as they received it this year and will do so next year; and we shall keep the inflation-linked pension increase, so we’ll increase pensions accordingly as inflation rises. If we anticipate how inflation develops, we’ll raise pensions in the middle of the year. This is what happened in July. And if we can’t predict inflation or if it’s lower, we always adjust pensions in November. I’d add that if inflation is lower than expected, we don’t reduce pensions; but if it’s higher, we always provide more. In fact we not only provide it to those who are already entitled to it by law, but also to a wider group of people who receive pension-like benefits. In addition to the more than two million pensioners, this is a group of 400,000 people who – without legal obligation – also receive the money we give to pensioners. So there will be an inflation-linked increase, and we also have a rule – because we cry together and laugh together – that if at the level of the national economy growth exceeds 3.5 per cent, we’ll give pensioners another amount on top of that. I think that this is what will happen this year; although there’s some debate about it, I think it will happen this year. According to the National Bank, we’ll see growth of 4 per cent. So in addition to the inflation supplement, pensioners will also receive a pension premium, and the extra 400,000 people who receive pension-like benefits will also receive this pension premium. This is the plan now, and we’ve already taken these decisions.
Since you mentioned that we cry together and laugh together, the following question arises: Can the Government count on the Hungarian left – either in the fight against sanctions or in the efforts at home? I ask this because recently a campaign finance question came to light in which they themselves admitted that they received billions of forints in funding from America. Do you think that this has any impact on their approach to these issues?
It creates difficulties. I think that even your listeners and people who aren’t involved in politics can easily see that. So it’s difficult to work with people who you know aren’t masters of their own will, but who are playing someone else’s sheet music. So it’s very difficult to work with someone as a counterpart or opposite number in negotiations if you know that they’ve been bought and that there’s someone in the background: you know that in fact you should be negotiating with the person in the background, because they decide what happens anyway. This is difficult in private life, it’s difficult in business, and it’s difficult in political life. This is why it would be a mistake for the Government and the country to base its policy on cooperation with the Opposition, because they’re simply not masters of their own affairs, but are funded from America: he who pays the piper calls the tune. We have to live with the fact that this is the kind of opposition we have now.
Let’s end the interview by talking about another issue that’s caused a big stir in recent weeks. This is the Interior Minister’s so-called “heartbeat decree”. Does this also mean that the legislative regulation of abortion in Hungary will be tightened? Because what we’re talking about here is that a mother planning an abortion must listen for the heartbeat of her child before terminating the pregnancy.
In Hungary abortion is regulated by legislation. This legislation was passed by the Hungarian parliament quite a long time ago, and I think it settled the always heated debates around abortion. There’s no such thing as a perfect abortion law, but what we have is a rule that Hungarian society can live with, and therefore it would be a mistake to change this legislation. So I’m strongly opposed to any change in the abortion law and I’m in favour of maintaining the current system. Furthermore, this isn’t an issue we should be dealing with now, because there are sanctions, there’s a war, energy prices are sky-high, and we have the dollar-fuelled Hungarian left coming at us from behind. So we shouldn’t be dealing with this issue in these circumstances. But even if we did, the Government would still take the position that it has no plans to amend the abortion law, and I don’t think that such a thing is imaginable.
In the past half hour I’ve been questioning Prime Minister Viktor Orbán on subjects including the Brussels sanctions, their impact and the national consultation on them that’s being launched in Hungary.