Commenting on the effectiveness of sanctions, Gergely Gulyás, the prime minister’s chief of staff, said that ever since tha annexation of Crimea, sanctions have been in force against Russia, but they had failed to prevent war while causing damage to Europe’s economy. He also said that PM Orbán had not talked to either Ukrainian President Zelensky or President Putin since the outbreak of the war.
Hungary will not go against a united European position, but the country will succeed best if it tries to dampen the effects of the sanctions, he said. Sanctions that cause the least possible damage are needed, he said, while bankruptcy went against the country’s interests, he added. For the time being, the price of the sanctions has been paid by those who do not get compensation from the deposit insurance fund.
He said it was uncertain what further sanctions would be introduced, but those already in place were damaging not only Russia but also Europe. “Despite this, Hungary’s economy is performing well,” he added. Figures from the first month-and-a-half of this year show that “Hungary’s economy has a firm footing and growth of around 7 percent carried through from last year, a thirty year record high”, he said.
The weakening of the forint and share market fluctuations “lack any economic basis; the supporting pillars of the Hungarian economy are extremely stable,”
he said. “We trust that the Hungarian economy, with obvious losses caused by the sanctions, will survive this difficult period without extreme harm being done,” he added.
In response to a question, he said the productivity of Hungary’s agriculture had been growing in recent years, and while “the price of wheat will surge” as a result of the war, the volume harvested in Hungary is sufficient to feed some 22 million people. Gulyás said some inflation projections of around 9 percent this year were “baseless”. At the same time, he added that the war would put pressure on inflation, with the increase in commodity prices also affecting Hungary.
In response to a question about whether this year’s budget would need to be amended in light of the war, he said this would be decided around the middle of the year.
Meanwhile, Gulyás said that
the government’s policy for Hungarian communities abroad involved encouraging people to stay in their place of birth,
but those who do not want to return home after the war will get support in finding work so they can settle. In response to a question about support available for refugees, he said there was “certainly no upper limit to our help”.
Gulyás said it was impossible to forecast how many people would seek refuge in Hungary. “Vaccination capacities are significant, and seem to be unlimited compared to demand.”
Refugees can get any type of vaccine they want, including jabs against the coronavirus and other vaccines which are not automatically given to children in Ukraine,
He said a working team has been set up by the government to find ways to channel refugees to the labour market, including those who stay temporarily. There are some 80,000 unfilled jobs in Hungary, mainly in the construction sector, he said.
Gulyás said the Visegrád Group of countries were united in rejecting a European Commission proposal to offer temporary protection to refugees. Those who arrive in Hungary receive refugee status, and clear regulations apply to them, he added. Commenting on the liquidation of Sberbank, he said the government would enable local governments affected by the bank’s collapse to take out a loan under preferential conditions. He added that there were around 3,000 clients with savings of more than 100,000 euros. Sums above that threshold are not covered by the deposit insurance fund.