Zsolt Törőcsik: Inflation eased to 16.4 per cent in August, continuing its decline since February – although the pace of decline was slightly below analysts’ expectations. Meanwhile, both at home and abroad more and more evidence is emerging on how multinationals’ hunger for profits has boosted inflation over the past year to eighteen months. I welcome Prime Minister Viktor Orbán to the studio. Good morning.
Good morning.
In the light of the data for August, what are the prospects for single-digit inflation remaining within reach by the end of the year, or are we further away from that target?
I’m at least as impatient as everyone else – and sometimes angry – about inflation, because inflation hasn’t been dropped on us by Fate: it’s the result of European policies – primarily policies on the war. So if a fairy were to come along now and grant our wish by ending the war immediately, then the economic situation would improve immediately. But it also shows that for as long as the war continues the economic situation won’t be what we all want it to be; because we’re living in wartime, and in wartime economies perform differently. Some people benefit, of course, and so war speculators – of whom there are some – make handsome profits; but generally ordinary people, nations and countries lose as a result of war. This is our first problem. The second is that sanctions have exacerbated the consequences of war. The sanctions are European Union sanctions; this is especially painful, because the whole of the European Union is described as – as they’re wont to say in Brussels – a “peace project”. It was created in order to avoid war, and to swiftly resolve any tensions that might arise. If after all a conflict does break out, let’s localise it, let’s tie it down, let’s prevent it from spreading: this is the European Union’s fundamental mission. In contrast with that, in the EU now there’s an overwhelming majority of pro-war people. So the EU isn’t on the side of peace, but of war; this is why it’s introduced sanctions – and the sanctions have made the economic situation even worse. And so, of course, the situation is that hundreds of thousands of people are dying, and on the front line terrible things are happening. But it’s not only the warring parties who are suffering: the whole of Europe is suffering from this war and from the European response, the Brussels response to it. In addition, we feel that what’s happening to us is unfair, because from the very beginning Hungary has opposed the war and the sanctions, and we’ve always sought to localise the conflict. We’ve said that this isn’t a world war, and this isn’t a European war: this is a war between two Slavic brother nations, and we must try to minimise its shockwaves. So we’ve done our utmost to ensure that this war and the European response to it don’t blight those European countries – such as Hungary – that aren’t part of the conflict. But meanwhile, for all our opposition to it, we’ve been unable to escape its impact. So, from the Hungarian point of view, the whole situation is unfair, unjust and inequitable; but then life is often like that – especially in international politics. We can’t expect a fairy to end the war with her magic wand. This assumes that the President of the United States of America won’t metamorphose into a fairy – because he has such a wand in his hand, and he could stop the war tomorrow morning. If the President were someone else, there wouldn’t be a war; or if a new president came in, he’d certainly stop it. But even the current US president could stop this war, if he had any such intention – yet at the moment we see no sign of that. Therefore we must continue to fight against the economic consequences of war – one of which is inflation. What’s more, there’s truth in what’s been stated by the competition authority, by the Economic Competition Authority: that, as is usually the case, if the normal functioning of the economy is disrupted for some reason – by war, or sanctions – energy prices rise sky high. This means that there’s a reason to raise prices, and those who are able to do so will do so. And so the sellers, the retailers – especially the big multinational chains – will immediately take advantage of this opportunity, and in order to increase their profits will always try to raise prices more than would otherwise be justified. And this plays a role. It’s an infuriating phenomenon, but it has a serious role to play in the development of the inflation rate. And so, while we’re speaking out against war, we must take action at home against price-gouging multinationals – as recently has finally been done by a number of organs within Hungarian state administration. Other countries are trying other means. Now I see that recently price caps have gone out of fashion, and we’ve also switched over to compulsory price reductions and electronic online price monitoring. I can see some countries where price caps are now being reintroduced for petrol and basic foodstuffs. We too have to observe what the outside world is doing, and I believe that the tools we now have are sufficient to bring inflation down below 10 per cent – into single figures – by the end of the year. But I can see that the range of tools is wide, and we’ll take further action if we need to. We certainly won’t sit back and do nothing: with all the government tools at our disposal, we shall take action, we shall protect people, and we shall protect families
Speaking of the price of petrol, analysts also point out that the increase in transit fees for energy commodities is contributing to the petrol price rise, which further increases inflation. How worrying is this phenomenon? And what can we do about this situation, given that we have no coastline and no energy sources, and that we have to find a way of transporting the oil that’s used to make petrol and diesel?
I can honestly say that I have conflicting feelings. I’m not going to swear, because the Prime Minister shouldn’t swear, but I have strong thoughts when I see that the Ukrainians have increased the transit fee. The naphtha and oil that we need for petrol comes from Russia via Ukraine, and – as is the international custom – we have to pay for use of the pipeline. And we’ve always paid. What’s happened now is that overnight the Ukrainians have increased the fee. We’re being forced to import fuel through the pipeline at three and a half times the price. Now, according to our quick calculations, for Hungary this means paying an extra 48 billion forints. And obviously it’s not the state that’s doing this, because the importers are private companies, and the Government isn’t involved in the petrol trade. In Hungary the private sector is engaged in this, but the stakeholders in the private sector, who are paying an extra 48 billion forints, immediately incorporate this into the price. This pushes up the price of petrol, and also increases inflation by about half a per cent. I say that I have conflicting feelings because, while I’m very angry about this, I also see that the poor Ukrainians are fighting for their lives: they have no money, few weapons and they’re outnumbered. And yet they’re not inclined towards peace, but towards continuing the war, and clearly they’re trying to collect money from everywhere. But the Hungarian prime minister, for example, shouldn’t be guided by his emotions and shouldn’t primarily side with outsiders, but should first and foremost be concerned with his own citizens. So I’ll do everything in my power to dissuade the Ukrainians from continuing this policy and imposing sky-high prices for using the pipelines, thereby putting Hungarian families and the Hungarian economy in a difficult situation.
Talking about the war, you’ve said that hundreds of thousands of people are dying on the front, and indeed some kind of stalemate seems to have emerged. In an interview with the BBC this week, the US Chairman of the Joint Chiefs of Staff said that Ukraine’s counteroffensive could have only 30 to 45 days left. Has this kind of stalemate increased the number of those in the peace camp, or the volume of their voice? Or what is it that America’s waiting for before it puts an end to the conflict?
If something increases the size of the peace camp, the number of its members, it won’t be the judgement of the Americans – let’s not build a policy on that. It will much rather be the pressure that the electorates of the countries concerned exert on their governments; because their governments – unlike the Hungarian government – may be pro-war, but the people aren’t. I think that not only in Hungary but throughout Europe the majority of people tend to share Hungary’s position. This is obvious here, but also in other European countries. So people are increasingly pro-peace. And the more economic trouble the war causes them, and the less they see that this war can produce a successful outcome for Western countries or for Ukraine, the more they ask this question: “So why are we doing all this? Instead of spending our money on our own economy, why should we give it to a war in which there’s a stalemate, and in which ever more people are saying that the situation has no military solution? So why are we pushing for and funding a military solution?” In Hungary, too, maintaining the reductions in household utility bills in these circumstances – in wartime conditions – is a horrendous expense. In 2022, when utility costs were very high, we gave each family 181,000 forints through cuts in utility bills – that’s how much they saved. Now, in 2023, prices have come down, so this is less at today’s prices, but Hungary still has the lowest electricity and gas prices. This costs money. And the Hungarian people are also saying, “Well, something has to be done.” This is even truer in the West, where there are pro-war governments. Therefore I believe that the deterioration in the economic situation will be the decisive factor that will force the governments of the European Union states to join the peace camp and put an end to this war as soon as possible; because Ukraine wouldn’t be able to fight this war if we [in the West)] weren’t providing it with weapons and huge sums of money. The other day I added up how much money we’ve given. Since the outbreak of the war we’ve given the equivalent of over 181 billion forints in European money. This is a huge amount, and yet, contrary to our hopes, in return for this money we’re not one step closer to peace – and in fact we’re further away from it than we were earlier. But, despite this, the vital tools are still in the hands of the Americans. The US election campaign is approaching, and we don’t yet have a clear picture of the implications of this and the impact it will have on the US position on the war in Ukraine. This is something that we’ll need to understand. In the US I don’t think there’s a decision yet on whether the current president will go into the presidential campaign with a Ukrainian war supported by the West still in progress, or whether he wants to fight the election with the political success of having ended it.
All the things we’ve talked about so far – high inflation and war – create uncertainty, and experience has shown that this tends to have a negative impact on the desire to have children. How can the Government turn this around? Are the family support measures sufficient for this? Because at the demographic forum yesterday you said that the battle for children isn’t fought in the pocket, but in the head, in the heart, and in the minds of the public. And, as a father, I also believe that for people to have children, first of all the mind and the spirit must be attuned to it.
Those of us who are fathers know this very well. The truth is that, when I look at European politics from the point of view of families, I can see who cares about families, who wants to support families, and who wants to help young people have the children they want. I see who it is that thinks in terms of the homeland and nation, and who knows that the existence or non-existence of children is linked to the existence or non-existence of one’s homeland. I can see how they behave. We who have children, and even several grandchildren, think of, say, our grandchild born now in 2023; and if I calculate on the basis of an average life expectancy almost guaranteed now by science – or at least made attainable – of 80, then our grandchild born now will still be alive in 2103. This means that we can’t just make short-term decisions, because people who are important to us and whom we know personally – such as our grandchildren – will be living in that future world. Not many of us in Europe are like this, and I myself think that whatever decision we make now – whether it’s about migration, gender or war – will of course have an impact now and will have an impact in the medium term; but it will also shape a world in which our grandchildren will live, somewhere around 2103. So thinking in 2023 about what the European world will be like in 2103 doesn’t at all mean that one’s out of touch with the world. Now there are people who have no children and who don’t think about the future in the context of family, and they’re not interested in any of this. That’s the first problem. And in Europe such people are often more numerous. This is why in Europe today there’s no collective demographic policy. Because if everyone thought like us, you and I and many others listening to us, then the number one political problem being addressed in Europe would be the demographic problem – because children aren’t being born. So something’s wrong, and it needs to be corrected. Now, the problem may be in people. It’s not the job of the Government, however, to find fault with people, but to try to help them solve the problem that they’re clearly suffering from. But as there are fewer of us who think like this, the demographic issue is not on the European agenda. This is why we hold forums like the one here in Budapest yesterday and today: to persuade decision-makers to put it on the agenda. There’s also another problem, which is that there are people, political leaders, who belong to what we might call the liberal mainstream, who think that the most important thing in the world is us as individuals – and therefore themselves personally. They hold that there’s nothing more important than the individual. And so there will be no children. Because children are usually brought into the world by people who think that there are some things in the world that are more important than themselves. If I put myself first, there’s hardly room for responsibility, community, family or children. And yes, the demographic forum had a point, which was made very elegantly yesterday: that in order to have children, we need a collective mindset in which there are many people – and if possible a majority – who think that there are things in the world that are more important than oneself as an individual: such things as one’s family, children, country, and God. There are such things. Those who cannot accept this, because they themselves are always their priority, unfortunately have no children or very few children. Therefore creating a family-friendly country is probably far more dependent on a collective mindset than on financial support. But financial support shouldn’t be abandoned, because young people must be put in a position in which they’re free to decide on whether or not they want to have children, and those who do want to have children shouldn’t be deterred because they’re confronted by financial difficulties. This is why the Government’s aim is to ensure that those who have children are better off financially than those who don’t. We’re a long way from that, by the way. The situation has improved a great deal, but today having children still involves a kind of financial sacrifice. One of my personal goals is to make Hungary a country where families who have children live better than those who don’t; because one participates in the future, and the other opts out of the future.
We’ll talk more about the collective mindset in a moment, but looking at the results so far, how do you assess the results of Hungarian family policy to date?
Nobody’s interested in them. So we’re Hungarians, and I think that the relevant popular expression is that “self-praise stinks”. The character of the Hungarian people is that if they’ve achieved something they take it for granted, and don’t even want to talk about it. The fact is that 160,000 more children were born as a result of the new family policy introduced in 2010 than would have been born without the support from that family policy. People now say, “Of course, but that’s been done, it’s in the bag. It’s a great joy, a great success, but let’s not talk about that – let’s talk about how many more children could be born if the Government did its job better.” Or it’s also true that many homes have been renovated and built from scratch, especially with the help of the Village Family Home Creation Allowance, but also with the help of the Urban Family Home Creation Allowance, meaning that people who didn’t have a home have been able to get one. Okay, okay, but let’s not talk about that, but about how we can help those who today still don’t have access to housing and a start in life, an independent start in life. So I don’t like to talk about successes. Of course I’m proud of them and happy about them, but to the Hungarian mind this isn’t enough. So instead we need to talk – and yesterday I opened up this discussion, this debate – about how we can make more progress in the family support system so that more children can be born.
Returning to the collective mindset, yesterday you also said that, to put it plainly, Western political life, the framework for understanding how the world works, has been hacked by liberals. And you also said that Hungary is the place where the conservative politics of the future will be developed. What results can this kind of conservative politics developed in Hungary achieve in next year’s European Parliament elections – even at a European level?
The first thing to remember is that the Italian prime minister – whose programme for families is uncannily similar to ours – was a guest at the demographic conference. This wasn’t the case a year ago. Italy hasn’t had a government like this for a very long time. What I’m trying to say is that the kind of thinking – let’s call it conservative or family-friendly – that exists in Hungary isn’t rare, it isn’t a one-off, it exists elsewhere, and even large countries like Italy are setting off on this road. So there’s a good chance that we can achieve a family-friendly political turnaround in Brussels, and that there will be ever more prime ministers and governments in Europe that are elected by the voters to represent in Brussels the interests of families in their respective countries. The number of these may increase in the future, and I’m confident that we’ll help one another. The Demographic Forum is also able to help us to create a kind of political alliance between family-friendly governments on family-friendly issues – regardless of whether or not those governments agree on other issues. So this kind of family-friendly political coalition building across party and national divides is also taking place quietly in the background. This is important. And on 1 July next year the Hungarian presidency will be launched in Brussels, for which we’ve already announced that – among the European programmes for that six-month period – we’ll definitely include the issue of demography and the possibility of family-friendly governance at European level. This is why the European elections are important. The stakes in those elections – due in June next year – are very high. We need a turnaround in Brussels, and Europe is suffering because of what the bureaucrats in Brussels are doing. We must achieve peace, and after the elections we need a leadership in the EU that wants peace. We need a leadership that doesn’t isolate itself, but wants to cooperate with other regions of the world. We need a leadership that’s finally able to stop migration, because the current one can’t, and one that abandons gender propaganda and instead supports families and having children. And of course we need a Brussels leadership and a Brussels bureaucracy that finally puts behind it and renounces its double standards against Poland and Hungary. So these are the big goals for the European elections, and family policy is high on the list.
There’s a question, for example, over whether the European People’s Party – which is perhaps a key player in this respect – will have the courage or the strength to back these initiatives.
We don’t know, and before the elections it’s very difficult to say. What I do know, and what I can see, is that ever more countries and ever more parties – European parties – are criticising the Brussels bureaucracy for not standing up for European interests. Now there’s an issue, the most acute issue today, and it’s the most important issue for me to deal with. So there’s the import of grain from Ukraine. Those of us who are in Ukraine’s neighbourhood – Poland, Hungary, Slovakia, Bulgaria and Romania – have been persuaded by the people in Brussels to let in by land the grain that had been transported from Ukraine by sea. They say that if it doesn’t get out of Ukraine to its destination of Africa, then there will be famine. I was suspicious at first, but we gave it the nod. And of course we were well and truly conned. What ends up happening is that we get the grain out of Ukraine, but it doesn’t get sent to Africa: because it’s cheaper than Hungarian, Romanian and Polish grain, instead of buying our grain through the usual channels, the traders here in Europe simply start buying the cheaper Ukrainian grain. Poor African children don’t see a kilo of bread from this. So there’s a scam going on here, and this is why we’ve fought in Brussels to ensure that Ukrainian grain can’t be imported into the countries of Central Europe and stay here. So it can go through our territories, but it can’t stay here in Europe. This ban expires today, and at present the bureaucrats in Brussels don’t want to extend it. And if they don’t extend it by midnight tonight, then a few countries – Romanians, Poles, Hungarians and Slovaks – will join forces at national level and we’ll extend this import ban on a national basis. This will become a major battle in Brussels. To the listeners this may seem a boring issue, but I’m just saying this because we have to fight such battles with Brussels every day. This is because Brussels simply refuses to take the side of the Member States and the European people, but represents quite different interests. In this grain affair, too, these aren’t European, Romanian, Polish, Hungarian or Slovakian interests, but rather American interests.
Inflation, among other things...
Excuse me, only American interests because what we call Ukrainian grain isn’t Ukrainian grain, of course, but a commercial product that’s been produced on land that’s probably been in American ownership for a long time. This opens up another dimension to the debate on Ukraine: whoever wins or loses in this war, it’s certain that America will win and Europe will lose.
We’ll talk more about this in the next programme. Today I’ve asked Prime Minister Viktor Orbán questions on subjects including inflation, the war and Hungary’s demographic situation.