The “bold step” of capping the prices of basic food at their October levels shows that the government is prepared to intervene if prices get out of control, the minister of agriculture said on Sunday.
Measures imposed by the government serve to support and protect Hungarian families, István Nagy told public broadcaster Kossuth Rádió. Not only will the rollback of prices save families money, but it will also “send a message to the market” that the government “is not afraid to take even the most unexpected steps”, he said.
Nagy noted that the government had already lowered VAT on certain basic food products to 5 percent.
He said that while the opposition parties were criticising the food price cuts, they had also refused to vote in favour of the VAT cuts in parliament.
“How credible is a criticism of this policy when they go on to propose a measure which was already imposed years ago which they didn’t vote for?” he said.
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Nagy said he expects retailers to respect the government decree on the price cuts, adding he believed they could afford to demonstrate social solidarity in an effort to curb inflation.
He said food producers and processors were protected from any negative effects of the policy because retailers were legally prohibited from cancelling their contracts.
The price cuts will be in place for a period of three months, Nagy said, adding that the government would later determine whether the policy needed to be prolonged.
Politicians of three opposition parties on Sunday criticised the food price curbs, insisting that it offered no solution to rising inflation.
Máté Kanász-Nagy of green LMP said the cuts were only a “pseudo measure” serving to “cover for the government’s flawed economic policy”. He said that after household utility bills and bank statements, the government now wanted to “push its propaganda onto grocery store shelves”.
Mihály Gál, representing Párbeszéd for a constituency in Pest County, said Hungary was “knee-deep in poverty” as a result of central welfare measures which he said had abandoned those who were genuinely in need of support. He noted as an example of existential crisis that as many as 82 people had frozen to death up till now since October, most of them in their unheated homes.
Éva Sebők, for Momentum, said Prime Minister Viktor Orbán’s “flawed economic policy” had led to Hungary having one of Europe’s highest inflation rates.
“Orbán and his cronies are interested only in enriching themselves while ignoring people’s real problems,” she said, insisting that wages needed to be gradually increased in the long term.