Europe’s on the brink of an energy crisis

As the utility cost reduction program comes under siege from Brussels and Hungary’s unlikely, Gyurcsány-led liberal-far-right coalition, energy prices in Europe continue to surge. An energy crisis is imminent, but Hungary has had a proven solution in place for years.

In his regular radio interview last Friday, Prime Minister Orbán spoke at length about the fact that today the average citizen in Austria pays double the utility costs that Hungarians pay, and Germans pay triple. The government’s utility cost reduction program was one of the first, and many would argue one of the most important, battles with the European Union’s unelected, Brussels-based bureaucracy.

Introduced in 2013, the utility cost reduction program effectively fixed the maximum price of gas and electricity at a state-controlled, affordable level. Over the last eight years, the program reduced energy prices by an average of 25 percent, keeping nearly HUF 2.2 trillion in the pockets of Hungarian families.

It’s not a coincidence that nowadays we see other countries in Europe adopt similar, albeit smaller-scale, measures to manage the energy price situation that seems to be getting out of hand. Just recently, Spain and Greece announced steps to reduce their energy prices, and rumor has it that France plans to hand out 100-euro “utility coupons” to those in need.

While energy prices on the global market have been breaking records almost every week in the last few months, Hungarian households currently pay only a portion of the market price: 40 and 30 percent of international electricity and natural gas prices, respectively.

But it hasn’t always been like this.

In the eight years of Socialist governments between 2002 and 2010, and particularly under former prime minister Ferenc Gyurcsány, utility prices were raised no less than 15 times. “Don’t be scared, it won’t hurt,” was Gyurcsány’s notorious line. While it definitely did not hurt him, Hungarians had to suffer a threefold increase in gas prices. Under the Socialist government, Hungarians paid the highest prices for gas and electricity in the European Union.

According to the Gyurcsány-led, unlikely liberal-far-right opposition coalition in Hungary, energy prices must be adjusted to global market prices. Not only would they roll back the utility cost reduction program, but also unleash a rapid increase in energy prices. Currently, the average Hungarian family saves HUF 382,000 annually on utilities, so the removal of the discount would mean more than HUF 32,000 extra in monthly expenses.

Sadly, the Hungarian left-wing is not the only enemy of the utility cost reduction program: Disguised as climate policy measures, Brussels aims to roll out new taxes that would dramatically increase the monthly utility costs of Hungarian families. However, as Prime Minister Orbán said last week, “the Hungarian government’s standpoint is clear: climate-damaging companies must bear the costs of climate policy, not citizens.”

We must continue to protect the utility cost reduction program and keep Hungarians’ utility bills as low as possible.