National consultation to create point of consensus on sanctions against Russia

In his radio interview this morning, Prime Minister Viktor Orbán discussed the EU sanctions against Russia, their economic impact, and the national consultation to be launched on the issue.

Speaking about the recently announced national consultation on sanctions against Russia, PM Orbán said the government has had to steer the country through several crises, and it is best to involve people in decisions, as this will create a point of consensus. After the migration crisis and the Covid pandemic, sanctions and the resulting energy crisis have created another situation where people need to have their say, the prime minister said. He added that he regards national consultations as one of the most important strategic political innovations of the last 12 years.

Compared to what Brussels promised, the sanctions on Russia were expanded to the energy sector, resulting in high energy prices, and they did not put an end to the war, he said. The current energy crisis is the result of wrong political decisions, and if there were no sanctions, energy prices would be somewhere around $100, where they were at the time of the election.

PM Orbán also noted that “sanctions can be corrected”: They are not imposed for an indefinite period, but for six months, and then Brussels politicians will have a chance to see the faults in their decisions. He added that if the Hungarian government does not fight for a change, energy prices will become embedded in the economy and remain permanently high.

In terms of energy security, which is the government’s top priority at the moment, “everyone can rest assured about energy supply,” he said, adding that “if not even a molecule of gas came through the pipelines from tomorrow morning, the economy would not feel this for four or five months because we have managed to fill up our reserves.”

After ensuring the security of energy supply, protecting families and businesses is the second priority for the government. The prime minister said that with a public utility allowance of 30 percent of the average income, Hungary is taking the lead in terms of financial protection for families in a European comparison. The Hungarian budget can cope with this for the time being, thus he believes the scheme can be kept at the same level, and “hopes are high that we can maintain this in 2023.” He also cited the firewood and brown coal programs as well as caps on food/fuel prices and interest rates as tools aiming to protect Hungarians amid the crisis.

Prime Minister Orbán said that businesses are facing growing difficulties, and HUF 200 billion will be made available to help them. A further program to save factories will be launched as well, and if unemployment starts to rise, they will immediately respond with a job protection action plan.

On pensions, the prime minister said there will be an inflation-linked increase. In addition, the National Bank of Hungary expects the economy to grow by 4 percent, meaning a pension premium may also be within sight.