Hungary’s government will be the first to ask the people about sanctions imposed on Russia in response to the war in Ukraine, Prime Minister Viktor Orban said at the opening of parliament’s autumn session on Monday.
European countries are now paying a “sanctions surcharge” on oil, natural gas and electricity well above US electricity and gas prices, Orbán said.
“The EU often accuses Hungary of running afoul of European values, but the highest European value is democracy,” he said. The sanctions were decided by “bureaucrats in Brussels and the European elite” rather than adopted in a democratic process, he said, adding that European citizens were not asked for their input, even though they are the ones paying the price of the sanctions.
Hungary’s government is launching a “National Consultation” public survey to gauge people’s opinion of the sanctions and to see whether they would support new ones, he said.
“If it all goes on like this, Europe will succumb to the worst,” Orbán said. “Europeans have become poorer and sanctions have failed to bring Russia to its knees, yet an end to the war is not in sight,” he said.
The war, expected to be protracted, would be a “local conflict” between Russia and Ukraine were it not for western sanctions, which have turned it into a “global economic war”. While the US the EU are supplying Ukraine with weapons and money, Russia’s reserves of material and men are endless, Orbán said.
The prime minister said it was expected that the war in Hungary’s neighborhood would continue this year and next, adding that it threatened a European and global economic collapse.
Orbán accused the West of being pro-war while Hungary stood on the side of peace.
“We demand an immediate ceasefire and peace talks rather than prolonging and deepening the war,” he said. Hungary’s priorities are “preserving its security and its economic and national sovereignty,” he added.
The government, he noted, has established a defence fund to be spent separately from the central budget funds on army development, border protection and strengthening the national security services.
Orbán said the economic consequences of the war affected families the most. “Inflation unseen in 40 years is sweeping across developed countries, with the highest rate seen in central Europe.” Drastic energy price hikes are owing to “political decisions in Brussels” rather than economic developments, he said.
The prime minister said it may make sense to impose sanctions on economic sectors in which “we are stronger than the country subjected to those sanctions”. But “we are dwarfs and Russia is the giant” when it comes to the energy sector, he added.
If sanctions were lifted, inflation would drop by half, he said, adding that without sanctions the European economy would revive and a recession could be avoided.
He said sanctions were causing enormous damage to Europe, while Russia had generated a 158 billion euros in revenue thanks to energy exports since the outbreak of the war.
“If it all goes on like this, Europe will succumb to the worst,” Orbán said.
More people in Europe are getting angrier, Orbán said, “and the bureaucrats in Brussels must understand that it is irresponsible to gamble the fate of entire national economies and millions of people.”
The government can guarantee Hungary’s energy supply, Orbán said. Hungary has sufficient supplies of natural gas, electricity and oil, he said, adding that the country’s gas reserves cover 41 percent of annual consumption, and the government has agreed with Russia on further deliveries.
As Hungary covers 85 percent of its gas consumption from imports, and the government is not in a position to influence prices, consumption must be reduced, the prime minister, calling on government agencies, state-owned companies, institutions, families and businesses to use less natural gas
Natural gas makes up 35 percent in Hungary’s energy consumption, and this will be reduced to 31 percent by late 2023 and to below 30 percent by 2025, Orbán said. He noted that the government had taken measures to boost domestic gas extraction, restart the lignite-based Matrai power plant, extend the lifespan of the Paks nuclear power plant and start the construction of a further two blocks there.
Hungary’s household energy subsidies are the most generous in Europe, the prime minister said.
The government has capped household energy bills and firewood and lignite prices, as well as basic food prices, he said. The cap on household energy bills up to average consumption saves the average family 181,000 forints (EUR 445) each month, he said.
Energy subsidies in Hungary will come to 30 percent of a household’s average monthly income, as against 20 percent in Germany and 6 percent in Austria, the prime minister said.
Hungary’s government has also launched a 200 billion forint programme to support small and medium-sized businesses with high energy needs, and it is drafting a “factory-saving” scheme and a new action plan to prevent job losses, he said.
Ongoing investments in Hungary are worth 9,400 billion forints, he said. While these will be concluded, the government will not launch further investments because there is no guarantee they would be completed, Orbán said.
Hungary is stronger today than at any time since the collapse of the communist regime, Orbán said. While sanctions have damaged the country, the government may succeed in ensuring that Hungary emerges from the crisis even stronger, he added.
The government will “set a quick pace” in the months to come, the prime minister said.
Not even in the forthcoming two-year period of crisis management will the government relinquish its national strategy objectives, Orbán said. It will continue to develop the transport network, maintain family support schemes, establish an innovation-based economy, develop universities, upgrade the armed forces and carry out its programme of national unification, he added.
Orbán also pledged to further develop the family support system, adding that 2023 state budget to be finalised by early December would contain the relevant measures.
Orbán emphasised that despite ongoing disputes with Brussels, Hungary still saw its future in the European Union.