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Zsolt Törőcsik: Good morning. Support for Ukraine and its possible accession to the EU was one of the main topics of yesterday’s EU summit of heads of state and government, where the relevant part of the final declaration was once again adopted without Hungary. Meanwhile, today Hungary is in the fifth day of a food retail profits freeze. The impact of that measure will be one of the subjects I’ll be asking Prime Minister Viktor Orbán about. Good morning.
Good morning.
Let’s start with that last one, the food retail profits freeze, and take a step back; because many people see this measure as interference in market processes. Why hasn’t the Government waited for the market to sort this out on its own and for inflation to come down?
Those who say that this is interference in market processes are telling the truth. It would have been good if we hadn’t been forced to do this. If a price rise is caused by market processes, then one can hope that market processes will bring prices down. But, having studied the extent and pace of price rises, the Government has come to the conclusion that there are no market processes at work here. I’ll give you the figures. So the fact is that the retail chains have put 42 per cent on chicken wings, 55 per cent on pork chops, 68 per cent on milk, 129 per cent on sour cream, 38 per cent on eggs, 69 per cent on cottage cheese, 70 per cent on yoghurt, and 87 per cent on butter. These are the percentages that the retail chains have been stacking on these goods, compared to the prices they buy them at. This has nothing to do with market processes. So clearly what’s at play here is that in the years following the fall of communism, successive governments were unable to create – and the Hungarian economy wasn’t strong enough to maintain or create – Hungarian-owned retail chains. So they’re foreign-owned, and they don’t care about Hungarians or market processes: they only care about their profits. And they’ve put huge sums such as these on the farm or factory gate prices. We’ve had to intervene. I’d also prefer to live in an economy where such emergency intervention isn’t necessary, but we could no longer stand by and watch people being robbed: this had to be prevented, price rises had to be curbed, and those raising the price had to be told that enough is enough. First we tried negotiation, it didn’t work, and we had to intervene.
Now, looking at the experience and the effects so far, some products have seen a dramatic reduction in price, while so far others seem to have seen less of a reduction. Overall, how do you rate what’s happened in the first few days?
The point of the intervention was that we said that the retailer could add a maximum of 10 per cent to the prices at which they buy these goods. That should be enough. Now this means that where they’re charging less than 10 per cent above their purchase price, they cannot raise their prices any further; and where they’ve been charging more than 10 per cent, and I’ve just mentioned some product groups, they had to come back below 10 per cent. This led to an immediate price reduction. We’re talking about thirty basic food categories, but if I break that down into products, it’s hundreds of products. We now calculate that 760 products have seen price reductions, which are price reductions of well over 10–15 per cent. We’re constantly monitoring this, we’re on the case. I have no doubt that the retail chains will try something, but we’re ready, and we’ll have an appropriate response. I’d like foreigners to understand that Hungarians cannot be ransacked. So they should understand that a margin of 10 per cent on the farm or factory gate price has to be enough. They couldn’t do that at home, they couldn’t behave in the same way at home with their own consumers as they’ve done in Hungary. I very much hope that the situation will normalise.
Some supermarkets have introduced volume restrictions on certain products, while others are expecting a drop in revenue. If a profits freeze isn’t enough to bring down inflation, what further steps can be taken?
We still have tools in our bag – this is a government after all. So we’re talking about the Government of Hungary, and a government has many tools to intervene in market processes. The fact that it doesn’t intervene on a daily basis doesn’t mean that it has no tools: what it means is that in Hungary we have a pro-business and pro-market government, which would like the economy to work according to its own logic, so that everyone can find their own way of doing things. If the market goes out of kilter for some reason, then it must be readjusted. We still have some steps we can take, but I don’t want to threaten or make any promises, because I’m confident that sooner or later the foreign retail chains will realise that you can’t win a battle against a government. They can only lose. Let’s come to an agreement and let them understand that there is an acceptable profit margin. No one – not a single Hungarian – disputes that they need some price margins and profits, but 10 per cent must be enough.
There are those in the Opposition who believe that, instead of a profits cap, a VAT reduction would be or should have been necessary. Why didn’t the Government choose this instrument to bring down inflation?
Some of those arguing for VAT cuts are ignorant, young and inexperienced, not having lived through previous VAT cuts. We have reduced VAT: we’ve reduced VAT on many basic foodstuffs to 5 per cent. Roughly, the way it worked out was that at the beginning about a third of the VAT rate cut resulted in a price cut, two-thirds was swallowed up by the retailers, and within a year the remaining third was swallowed up by them. So VAT was reduced, but after a few months prices were back to their previous level. Now there are young people who have just come into politics or haven’t been leaders before, and they probably don’t know or understand this. And then there are the old foxes, leftists mostly, whom I’ve known for a thousand years. They’re perfectly well aware that this is the case, but they’ve always been on the side of the multinationals. So they want a VAT cut, because a VAT cut means that the money goes to the multinationals, to the retailers.
There was another important change in Hungary this week, because, for the protection of children, Parliament adopted an amendment to the law on assembly. Critics say that this is a restriction on the right of free assembly, while the governing parties argue that it’s for the protection of children. Why is it that the existing legislation on the right of assembly is incompatible with the protection of children?
In normal cases, they can go hand in hand. What’s not compatible is if sexuality – whether it’s same-sex or opposite-sex sexuality – is taken out onto the streets. Or when all sorts of activists, gender activists, try to go into schools and – instead of parents – tell children what they need to know about this extremely complicated corner or detail of life, and when they need to know it. So today normal people like us are being subjected to constant provocation. This is because people living lives characterised by non-traditional sexual behaviour – which they have the right to do, nobody’s interfering in it, and there’s freedom on that – are taking this out onto the streets. And they have no regard for the fact that there are millions of children in this country who need to be raised, who need to be given a start in life, who need to be brought up to become healthy people, and who need to be given the chance to be happy in their lives. The responsibility for all this lies with parents. And we simply shall not accept them being influenced with all kinds of propaganda – whether that be in the form of books, films, school propaganda or street events. So we want people to understand that we believe freedom and child protection can go hand in hand. There’s a place for freedom and there’s a way of bringing up children. And the child comes first. The debate in Parliament now is about whether the child comes first. And we’re of the opinion that a child’s right to a healthy upbringing is a fundamental right, and indeed it’s a fundamental right that’s the most important of all fundamental rights, and therefore it must be taken into account during the exercise of all fundamental rights.
Critics of the amendment say that this means the Government has banned Pride. Despite this, many people still say they’ll be out on the streets if there’s such a movement. What can they expect? Because there’s been a lot of talk about this recently.
That will come at the end, but we’re not there yet. We’re now working on forming the legal background which will allow the authorities – because it will be up to the authorities – to take a position based on the law as to whether or not the right of assembly means that Pride-type events can be held openly on the streets. Alternatively, they may decide that our children’s rights have priority, and therefore there’s no place for this on the streets. This is for the authorities to decide at a later date. In the current legal situation, the authorities would be in a difficult position, given that in Hungarian law it’s not clear which has priority: freedom, or licence; or the right to raise children, the right of parents to raise children. Who comes first: the Pride marchers or our children? The Hungarian government’s position is that our children come first. Everyone will have to adapt to this. In this respect a clear legal situation must be created, so that the authorities can then act calmly and soberly.
Let’s take a step back on this issue, because you’ve mentioned that the child comes first. But what actually led to the amendment of the law on assembly? What chain of logic links this amendment to previous government measures?
Well, there is such a link, but I’ll tell you frankly that there’s another circumstance. I’ll tell you, and perhaps in doing so I won’t cause too much trouble, but up to now I haven’t been looking at all of this calmly. I’ll speak frankly, saying the following as the father of a family, as a Hungarian citizen, as a man who’s concerned about the future of our country, as a man who feels responsible for the spiritual and mental state of the next generation or the generations growing up now. I’ve always been concerned that something like this – let’s call it Pride – could happen. And indeed I was Prime Minister, but still it was possible for it to happen. In fact we had a two-thirds majority in Parliament, and still it could happen. Let’s face it, part of the truth is that there was huge international pressure. So behind this attempt at sexual re-education, the re-education of society, are huge international forces – we could call it an international gender network. Ambassadors have been leading these marches – indeed the American ambassador himself! And there was enormous pressure on the Government, from both Washington – because we belong to the Western world, and that’s what counts – and Brussels. And we simply weren’t in a state, we weren’t strong enough, to face such huge hurricane-force winds. But now the world has changed, at least in one place, in Washington, and different winds are blowing. Of course we’ll be in conflict with Brussels, but fighting on one front and fighting on two fronts aren’t the same thing. I think that the Hungarian government will have to persist on this single front. For the sake of our children, we have to try to win this battle internationally. There’s a much better chance of that now than there’s ever been. The change in America has opened up the Hungarian government’s room for manoeuvre, so that we dare to take the plunge and try to enforce the simple human law that children come first, followed by all other kinds of freedom and licence. Now, as far as the logic of things is concerned, since 2010 we’ve been working – and this is also a personal matter for me – to transform the entire Hungarian economic system into a family-oriented economic system. This isn’t so easy, because essentially everything we’ve been used to over the last thirty or forty years hasn’t considered the basis of the economy to be families, but individuals. It’s been about the person. This is even reflected in terminology: personal income tax, to give just one example. In life, of course, everyone lives as an individual; but it’s important that after all most of us live our lives within the bonds of a family. And economic regulation related to the family hasn’t taken into account its status as a community, with its own special internal legal relations, its special economic, human and spiritual relations – for example, the need to support children. And if you have to support a child, the burden isn’t the same as if you hadn’t committed to having a child. This is why we introduced child tax credits. Or, with divorce rates being very high and many families failing to stay together, many women are left alone with the burden of bringing up children, and so they too, at a young age, are left uncertain about whether and when to have children. We have to say something to them about whether or not they get any outside support or help. This is why we’re now introducing tax exemption for mothers of two for the rest of their lives. And the same is true in the school system, with the fact that we’re cracking down on drug abuse, and with the fact that there’s increased public safety on the streets. The ultimate reason for all this goes back to the fact that people want to keep their families safe. I’ll say again that behind our current very harsh crackdown on drugs, which resembles a manhunt, there’s also a pro-family mentality. And the tax credits for children, which we’re now doubling, are in sync with this. So although it’s in a lot of steps, in dozens of steps, what we’re doing in Hungary now is telling us a story. What’s unfolding before our eyes is that in Hungary we can have an economic system which sees the family as the nucleus, the starting point, the smallest unit. It’s taking note of this, and organising the economy around and according to the logic of the family.
You’ve mentioned that an attack is expected from Brussels. The first reaction came yesterday. A spokesman for the Commission said that they would not hesitate to take action to this legislation. And there were also protests in Parliament when the legislation was passed, with some MPs setting off smoke bombs, and others organising demonstrations. What do you see as the reason for these strong opposition reactions?
First of all, this has nothing to do with Brussels. In recent years Brussels has become accustomed to taking national competences away from the Member States. This is wrong, and we’re fighting against it; but it’s completely clear that the issue of regulating family life is purely and exclusively a matter for the Member States. Brussels has no say in this. I could use stronger, and say that when telling them not to concern themselves with Hungary, I could advise them where to go in the meantime. But perhaps that wouldn’t be suited to the character of this programme. As for the incident in Hungary, I can ask people to look at what happened. What happened was that Parliament started to debate the constitutional amendment for creating the legal basis for the primacy of the family. And the action taken against this by some MPs went as far as violence. I believe that it isn’t for rival political parties – for MPs, for people like me – to give an opinion on this: it’s for the electorate to give an opinion on it when the time comes and they go to the polls. This is awaited in the spring of 2026. The verdict on what’s been going on in Parliament now will be delivered by the electorate in the elections next spring. I have little doubt what they’ll think about it.
Talking of Brussels, we’re here because yesterday there was a summit of EU heads of state and government. Just as at the last one two weeks ago, you again vetoed a joint declaration on Ukraine which called and urged for support for Ukraine, and also for its EU accession. Yesterday, what was your impression of the determination of EU leaders and of the prime ministers and heads of state of the Member States on the question of accession?
The situation is improving – it’s not good, but it’s improving. And here, too, I’d like to look at the current debates from a historical perspective, if I may. Let’s do this so we don’t panic. So we shouldn’t panic upon seeing moments when 26 Member States say one thing and we take a different position. Because if we’d panicked earlier, our country would already be in big trouble. For example, it would be full of migrants. I remember when the 26 said that we have to manage illegal migration, we have to live with it. “We can manage this”, said Angela Merkel, the German chancellor. And we said, “Well, you can manage it if you want to, and we’ll manage it by not letting them in.” And we were the only country to say no, to build a fence, and to take issue with them. Yesterday there was a meeting in which eight or nine prime ministers who are rebelling against the current asylum regulations were present, and I was there. They’re saying exactly what Hungary said and did ten years ago, verbatim. So there’s no need to be afraid of being alone, because it may turn out that we’re right. The same story is playing out now in the war. I can see that in everyone’s eyes this war is lost. So it was a bad decision to jump in. The Hungarians were right. As soon as the Russians attacked Ukraine, Europe should have tried to isolate the conflict immediately, to reach an agreement and not to extend the war. In this war Hungarian families have lost 2, I mean 2.5 million forints per head – per household. And I think the richer countries have lost even more. So there will come a moment when the Hungarian position is the majority position. I won’t say that the Americans have joined us, because the difference in size makes that sound ridiculous, but they’ve taken our position. The Turks have virtually adopted our position. The Slovaks are now speaking in the same tone as us, and here I’ve already seen – I’ve seen it in others – that there’s a shift towards a more pro-peace attitude. We’re not yet in the majority – far from it, because yesterday, too, the majority of states took the position that the war must continue, and that more money and more weapons must be given to Ukraine. But this was no longer the same granite-hard or steely common will as that we saw earlier. As with migration, on this the moment will come when the Hungarian position will become the joint position of the European Union. Now it’s coming in the same way on Ukraine’s accession. Apart from us, everyone’s still talking about the desirability of Ukraine’s accession. But now the numbers are starting to influence thinking. Yesterday it was already clear that there’s no money. So the admission of Ukraine is a huge financial burden for the Union, and there’s no money for that. What’s their answer to this? “Well, let’s take out a loan and use it to take in the Ukrainians.” But I think it wouldn’t be right – not on my part but Hungary’s – to get into joint debt alongside anyone. And there are also difficulties in repaying the joint loans that have been taken out in the past; and in such cases one shouldn’t take out another loan. Yesterday, when we were counting the cost of Ukraine’s accession and the cost of maintaining the Ukrainian army, which they think is necessary, we also found out that repayment of the huge loan taken out earlier – during COVID – is something that’s now approaching our doorstep. This will be due in 2027. In 2027–28 repayment will be due on the interest and the principal. And now calculations show that this will take 20 per cent of the total EU budget. So one fifth. It will take twenty forints out of every hundred. And this will happen suddenly, overnight. Now, if you’re suddenly faced with such a burden, the right idea is not to take on more debt. So I believe that sooner or later, if nothing else, there will come a moment of sobering up on the financial side, and everyone will realise that, as things stand, taking in Ukraine would be tantamount to the European Union’s economic collapse.
The economy and finance are one thing. But in these matters politics also plays a part, and it seems that so far it’s the political will that hasn’t yielded. There will also be an advisory referendum in Hungary on this issue. How might the political will in Brussels be affected by the outcome of this vote?
This debate – whether or not Ukraine should join the European Union – will happen in every country. This debate is also happening here. Political life isn’t united on this. Let’s just say that the parties on the national side – the Christian Democrats and Fidesz – are clear that in the current known circumstances Ukraine’s accession would ruin Hungary and the whole European economy. And that’s not desirable. On the other side, however, there are pro-Ukraine positions; both the old and the new opposition are saying this – which isn’t surprising, because this is exactly the pattern of this debate here in Brussels too. So the Patriots for Europe – to which the Christian Democrats and Fidesz belong – are clearly saying, “Hold your horses”. The most militant, most radical pro-Ukrainian forces here in Brussels are the Socialists, to which DK belongs, and the European People’s Party, to which TISZA belongs. So anyone who belongs to the European People’s Party as a Hungarian party – such as TISZA – or to the Socialists as a Hungarian party – such as DK – has no choice but to represent the position represented here in Brussels by their party alliances. So this debate must also be fought in Hungary. On the one side are we, the national forces; and on the other side are TISZA and DK, the People’s Party and the European Socialists, who are arguing for Ukraine’s rapid accession to the European Union. If we get through this debate, if we have the position, let’s say, of the people, of Hungarians, then the Hungarian government will be able to establish a firm foothold here in Brussels. The others won’t be able to avoid it either, so it will only be a matter of time before the people of each and every Member State demand that their views are asked for and heard. Today people aren’t being asked about such issues anywhere outside Hungary. This isn’t surprising, because people haven’t been consulted anywhere in the whole of Europe on migration, or on gender. But now that the economic weight and consequences of this issue – of Ukraine’s accession – are becoming ever more obvious, I think the people of Europe in every country will demand to be heard.
You’ve mentioned the financial aspects; but if we look at Hungary, what areas of life would be affected, and in what form, by the possible accession of Ukraine to the EU?
This debate is just starting, and I wouldn’t want to come out with my own opinion too soon. I’d just say that people can cast their votes in April. This voting process will be completed in June, so by the middle of the year we’ll have a joint Hungarian national position. I’d advise everyone to consider all types of risk. There’s an obvious financial risk here, and that’s what I was talking about. There’s an agricultural risk: I think our farmers would be ruined. And then there’s a labour market risk: there would be tens of millions of people coming into the European Union who wouldn’t have jobs anywhere at home, and who would be looking for jobs. There’s a security risk: Ukraine isn’t a country renowned for its public safety, and all sorts of dangers can enter the EU from there. There are food safety risks, because the production ethos in agriculture there is very different from ours: they have GMO production, so it’s a different world. Then there’s the pension risk. So in the debates ahead of us it will be worth going through the situation calmly and honestly, point by point, and assessing the consequences for Hungary of Ukraine’s accession to the European Union. In my view, seen from above, the balance can only be negative. We have enough problems as it is, and we shouldn’t saddle ourselves with this one.
In addition to accession, the European Union is also continuing to call for support for Ukraine. Meanwhile we see that now on an almost daily basis the Americans are negotiating with the Russians and the Ukrainians in order to end the war. What’s your opinion – or what impression did you gain yesterday – on the maturity of the European strategy towards Ukraine, or the post-war period?
To describe the situation I’ll try to find a good word that isn’t offensive to them. Perhaps “chaos” is the right word. So here in Brussels they’re out of sync. I had thought that there would be a big negotiating table and that the parties concerned would sit at it. But apparently things aren’t going in that direction: the Americans aren’t doing that, and they’re reaching agreements with everyone individually. So at some point we Europeans will find ourselves in a situation where there’s already an agreement between the US and Ukraine, there’s an agreement between the US and Russia, and there’s an agreement between Russia and Ukraine. All without us. This is the situation that they’re now facing here in Brussels: this could happen, Europe has made a mess of it, and if things go on like this, we won’t be needed for these agreements. I’m not happy about it now, but at the recent summit it was also said that we shouldn’t be surprised, that nothing has happened that we didn’t foresee. Because everything that we’re seeing now matches what I wrote down during the Hungarian Presidency in July. I sent that to every prime minister, and I sent it to every European institution. I spoke to the Ukrainian boss, the Russian boss, the American boss, the Chinese boss and the Turkish boss. And in July I wrote that this was the situation we were going to get to: if the Europeans didn’t take action, if we didn’t change this pro-war position and start to develop and represent an independent European line, we’d end up exactly where we are now, and the future of Europe would be settled without us.
I’ve been asking Prime Minister Viktor Orbán about the effects of the retail profit freeze, amendment of the law on assembly, and yesterday’s EU summit.
