Zsolt Törőcsik: It was probably only on Tuesday this week – when an air-defence missile launched from Ukraine struck Polish territory, killing two Polish citizens – that many people became aware of what it means to be the neighbour of a country at war. Since then much has been learned about that incident, but so far there’s no answer to the question of whether it can turn the tide of the war. I welcome Prime Minister Viktor Orbán to the studio. Good morning.
Perhaps the most important question is whether we have anything to fear here in Hungary, because we also share a border with Ukraine – although our border isn’t as long as that of the Poles.
Well, the rule is that if there’s a war in a neighbouring country, you can’t feel safe either. You can’t feel physically safe, because two Polish people who had nothing to do with this war have died. And the industrial facility that enables us to bring oil from Russia to Hungary via Ukraine has been struck, meaning that not only is our physical safety endangered, but that we don’t enjoy economic security. So what’s happened clearly demonstrates vulnerability and dangers. Ceasefire, peace negotiations. If we continue to do what we’ve been doing, if Europe regards itself as part of this war, as being involved in it, as if it’s fighting its own war, then Europe will be drawn deeper and deeper into this conflict and the danger threatening us will become increasingly acute. The citizens of Hungary are in a special position: the Donetsk front is far from Hungary; as you’ve mentioned, the Polish-Ukrainian border is a long border and the Hungarian-Ukrainian is a short border; and Transcarpathia is virtually the only area in the whole of Ukraine in which the Russians haven’t yet made a serious military strike.
You’ve mentioned the importance of a ceasefire and peace talks. It’s clear that the news of this missile strike has been greeted with a very calm reaction from world leaders – with the exception, perhaps, of the Ukrainian president. Does this bring us any closer to that: to negotiations and peace?
Events point in the opposite direction. There’s a flurry of news that in the background there are secret Russian-American negotiations. Without doubt there’s contact, but so far there’s no sign of any substantive negotiations.
This is also interesting because there’s an instrument which was described by its inventors about six months ago as being the vehicle that would bring us closer to peace: the European Union’s sanctions imposed on Russia. That was more than six months ago. In your opinion, have these sanctions brought us closer to peace? A major aspect of these statements is that although the European Union seems to be leading the way in sanctions policy, no one in the global public sphere seems to have paid much attention to the statements of European Union’s leaders.
A policy of sanctions is a step towards war: it’s a measure of an economic nature, but if you intervene in a military conflict by means of sanctions, you’re also taking a stance and a step towards one of the combatant sides – and therefore towards war. If we think back to how cautiously Europe started out a year ago, and how it approached the war in February this year, we can see that as time has passed, they enacted ever more measures that made them part of the conflict. There were the sanctions. Initially we were talking about not supplying weapons. Then countries said – at least many of them – that we would not supply lethal weapons. Then they relented, and now they’re also supplying lethal weapons. Then they said that there would be sanctions, but those sanctions wouldn’t be imposed on energy. So there were sanctions; but then they were also imposed on energy. Then it emerged that a number of countries are now jointly training members of Ukrainian military units on their own territories. Most recently it’s turned out that now we’ll have to finance the functioning of Ukraine: we Europeans will have to create the economic conditions for the economic functioning of a country at war. So it’s clear that, step by step, we’re sliding into this war. We’re not yet coming under fire, but we’re very close to becoming a true belligerent. What we’re doing is very dangerous! What Europe’s doing is very dangerous! We’re trying to restrain them, we’re trying to hold them back, we’re speaking the language of peace, we want a ceasefire, we want peace; but apart from us almost no one else is following this line. I’m not saying that they’re lunatics, because they’re clever people, they’re well prepared and they have a large professional apparatus behind them; but sometimes you get the feeling that they don’t know what they are doing – or at least they can’t look beyond tomorrow and appreciate that what they’re doing now will create a certain situation tomorrow, the day after tomorrow, the day after that, or indeed in the medium term. The result of this is that we’re destroying ourselves economically with sanctions. A sanction may seem like a good idea, and to many people it may even feel fair; but it will soon turn out that we’ve done more damage to ourselves than to the Russians, who are the target of the sanctions. Now with sanctions-induced energy surcharges and sanctions-induced inflation, sanctions are bringing down the entire European economy.
We’ll talk more about the economic consequences of this situation in a moment, but it’s very interesting that this week the EU High Representative for Foreign Affairs said that Brussels doesn’t expect sanctions to stop the war, but that it believes the sanctions are weakening the Russian economy. On the other hand, one could quote at length statements from other EU leaders who have said that the purpose of these sanctions was to stop the war. So now who is right?
Looking back, it’s similar to our own lives: in some cases politics is exactly like our personal lives. If something goes wrong, you can say one of two things. One is when you take stock of the situation: you wanted something, you chose the means, you chose the route, you failed to achieve it, and you rethink the whole thing. But there are also those occasions – and we can even recall them from our own lives – when we look back on something and start to remember it differently: we’ve failed to achieve something, but avoid facing up to it by telling ourselves that we never really seriously thought that we could achieve that goal. In politics this is very dangerous, because after all this is about people’s lives, about a great deal of money, and about the future of the economy and national economies. Self-deception won’t help, so we must disabuse European leaders of childlike false recollections about their past decisions, otherwise we’ll completely lose sight of our compass bearings; and in a turbulent situation like this war, the most important thing is to know one’s bearings and stay true to them.
This would be important because, despite the failures so far, press reports suggest that a ninth package of sanctions is being prepared, which could also attack nuclear energy – or could be extended to cover it. Will we see the effective use of what has been the Hungarian tactic of gaining exemptions? Or will this sanctions package even materialise in any form?
Hungary has never supported sanctions, we’ve never voted for them, we’ve fought for exemptions in every single case, and we’ve succeeded in obtaining exemptions. After obtaining exemptions we didn’t vote against the sanctions, allowing them to proceed; but we’ve never supported sanctions, and we won’t support them now. So we’re talking about two distinct things. The first thing is that in general we don’t consider a policy of sanctions to be a good European policy, and therefore we don’t support it. And the second thing is that if these decisions are taken we sometimes have to let certain ones through, because Hungary can’t afford to veto every measure. But even when we let something through, we must always insist on fighting to achieve something that’s in Hungary’s interests. This is what we call an exemption. And this is why Hungary has so far always managed to avoid the most destructive consequences of the sanctions, having always been able to successfully battle for some kind of exemption. This policy must be continued. The National Consultation is also important, because these situations in which you sometimes have to fight alone against twenty-six other prime ministers – or at least against the louder ones – aren’t comfortable, and it’s very important for the Hungarian government of the day to know that it has the support of the people behind it. Both here at home and in international politics in Brussels, we must clearly feel that what the Hungarian government says is in the national interest, because an entire nation thinks that what the Government represents is in the interests of this community, of our community, the community of Hungarians. In the negotiations this is important. I will achieve this. I’m sure it will involve me in great battles, but I will achieve it: if there’s a ninth package of sanctions, then within it we must get exemptions on issues that are vital to us, such as nuclear energy.
Youve mentioned that with these exemptions we have – or Hungary has – so far been able to escape the worst effects, but everyone has first-hand experience of inflation, of sanctions-induced inflation. Since our last conversation, the range of products subject to price freezes has been extended to include potatoes and eggs. Can these price freezes and the reductions in household utility bills counteract the negative impact of the sanctions?
We can’t counteract them, but we can reduce them. So, to put it precisely, Hungary can extricate itself – or be exempt – from measures that would cause it serious and immediate economic decline. For example, Russian natural gas will continue to come to Hungary; if it didn’t, the Hungarian economy would come to a standstill the following morning. But we can’t exclude ourselves from the general European effects of the sanctions policy: the inflation caused by sanctions, sanctions-induced inflation. This isn’t caused by an economic process or an economic historical process, but by political decisions: political decisions through which EU leaders have enacted the sanctions measures. And the consequence of this is high inflation, the consequence of this is the energy crisis, and this is why we’re paying a sanctions-induced surcharge for energy. Businesses and all of us are paying it, you and I, and everyone who owns their own home. So from this it’s clear that Hungary cannot aim to be an unaffected island within the European Union. What it can aim for is to protect its fundamental interests and to try to reduce the effects on it of the EU’s bad policies. We have an action plan, which so far contains eleven measures. The most recent one was defining the price of potatoes and eggs, so that it’s no longer the market deciding what these products cost, but the price being set by a government decision. We can’t introduce this for all products, because then we’d be going back to the system we used to call communism or socialism, and then our economy would collapse; but in some vital areas – we’re up to eight products at the moment – such measures can help people. They can be helped with the petrol price cap, or the fact that every family receives around 180,000 forints – without most of them knowing it – through the Hungarian government’s policy of reducing household utility bills, which is successfully keeping down monthly energy bills. If we had to pay the actual price of the energy that families use today, every family would be paying around 180,000 forints more per month. Now, if we seriously consider how many families in Hungary are able to pay an extra 180,000 forints per month, we have to acknowledge that unfortunately there are millions of families who cannot afford this. They must be protected. So, at such times, when a country is in such a situation – and I apologise for speaking at length about this, but this is my life – there are two options for a government and a prime minister. The first thing is to play safe, to hunker down, to not move, to not shift restlessly or take action, and as the problem is coming from outside, to wait for it to go away. The other option is to see the problem coming and not to play safe, not to seek to simply survive it, but to mitigate the problem or its consequences, and then to act. Having led the country during three major crises – the financial crisis left by the Gyurcsány governments, then the migration crisis and then the COVID crisis – I’ve learned that it’s true that problems come from outside, but if you freeze, if you’re motionless, you’ll be ruined. At times like this you need to be active and take action immediately, and you have to defend your fundamental interests. This is what we’ve been doing for the past twelve years, and now we’re also defending against inflation. I often say to the members of the Government that Hungary will not give in, and that needs to be the starting point.
In this eleven-point action plan there are also points or proposals for economic recovery. The most recent economic data shows that in the third quarter there was still growth of 4.1 per cent year-on-year, which is double the EU average; but there was a slight decline compared with the previous quarter.
In the post-COVID period the economy grew very rapidly, and this is a great success. The Hungarian economy and the Hungarian people did very well in the months following the COVID crisis. And then the war and the sanctions period arrived; this has had a negative impact on the economy, and we’re seeing the signs of it. But the goal is to prevent the economy going from growth to contraction. There’s a danger of this happening in most European countries. Economists call this a recession, when a country isn’t going forward but backward. We’d like to stay out of this general European trend. Our goal for the coming year is to maintain full employment, so that everyone has a job, and to have growth above the European Union average, so that we don’t go into recession and we don’t abandon our most important national strategic goals. National unification, support for families: in these matters we not only want to avoid backsliding, but we want to take positive steps forward and enact positive measures. We should talk about these things in December. Once again I’d like to emphasise that we mustn’t surrender to a mentality and a feeling that, because of the problems, we must now give up the most important goals. We’ll never abandon important national strategic goals. This is why we’re announcing a factory rescue programme, why we’re supporting small and medium-sized enterprises, why we’re imposing a price freeze, and why we’re imposing an interest rate freeze. We’ve just introduced a series of measures to support tourism and the hospitality sector: the state has so far taken 4 per cent of that sector’s income, but now we’re allowing businesses to keep that amount. So we’re continuously coming up with proposals on how we can try to make the situation bearable for businesses and for the Hungarian people.
Besides economic recovery, the other focus – not only in Hungary but worldwide – is energy policy. We’ve already talked about the strike on one of the transformer stations for the “Friendship” [Druzhba] oil pipeline. Due to this, oil supplies to Hungary were interrupted for a day, for about a day. Supply wasn’t in danger, but should any lessons be learned from this at government level?
Of course: governance consists of nothing but the application of the lessons drawn from experience. What’s important here isn’t just the strike on the transformer station and the paralysis of oil supplies to Hungary, but it’s also worth noting that there was an election this year. It was so long ago now that we can hardly remember it, but there was an election this year, and after the election I formed a new government. And when I formed the Government there were no sanctions. There was already a war, but there were no sanctions, and so we set up the Government with a structure and division of tasks that was appropriate to the situation at that time. Since then, however, the sanctions have arrived; and it’s become clear that, as a result of the sanctions, the energy crisis and high energy prices won’t be with us for a short time, but for a longer period of time. We need to adapt to this, and that adaptation includes the structure of the Government. So if the most important issue is energy, and for Hungary today energy is the most important economic and political issue, then this must also be reflected in the Government in terms of the allocation of responsibilities. So this is why we’ve been forced into this. I had no such plan, I didn’t see the need for it, and I hope that in the longer term it won’t be necessary; but now for a few years Hungary definitely needs an independent energy ministry that’s responsible for the development of the energy situation. The other thing we need – precisely because of the military activities – is to strengthen the army. Here the key issue is the military industry, which has almost been destroyed in Hungary over the past thirty years. Now we’re rebuilding it. This is the second most important task. This is why I’ve asked Minister Palkovics – whom I’ve worked with for heaven knows how many years, at least eight years – to head up the Hungarian defence industry. I’m grateful to him for taking on this task.
Returning to energy, you’ve said that this will be one of the most important issues in the next few years. Now experts are already talking about the fact that supplies in the European Union this winter are basically in the bag, to put it colloquially, but that we should already be thinking about next winter, because the supply of energy is something that is by no means guaranteed. How can we best prepare for this situation?
We have two tasks here. One is what you’ve just mentioned, which is to prepare for next winter. This winter can be considered as solved – if one season can ever be solved. So we’ve stored enough energy to ensure that if we were suddenly cut off from the outside world, Hungary would still be able to run its economy and supply its households in the way it is doing now for more than six months. So in terms of security of supply we’re fine in the short term, in the six-month time horizon. Then, when we draw on our natural gas and other energy resources that we’ve stored up over the winter, we’ll need to replenish those stores in the spring. The question of who will be able to restock their reserves in order to prepare for next winter is a challenge for the whole of Europe. Those who have now given up on importing natural gas from Russia will be in a difficult situation, because they’ll have to replace it from somewhere else. We’re in an easier position, because we’ve won ourselves an exemption. There’s no other solution, because we’re a landlocked country, and so the only way to bring in gas is by pipeline. We’ve asserted our interests accordingly, so in the spring – if the South Stream pipeline is operating, and we must do everything possible to ensure that it is – we’ll be able to fill our reservoirs with natural gas from the south and we’ll also be able to manage our supplies next winter using a clear and simple strategy. Europe’s other countries will be in a more difficult situation. But in the meantime there’s another task, because prices are sky high. So we have to make sure that we not only have energy, but that we have affordable energy. If we source our energy from abroad we have little influence over the price, so in the coming years we need to increase the amount of energy we produce at home. This is another task for Minister Csaba Lantos, whom I’ve asked to take the lead on the issue of Hungarian energy, assume political responsibility for it, and to take and present to the Government the most important decisions in this area. I think he’ll be able to manage this task.
In the Committee on National Security yesterday the first reports were heard on the issue of the foreign funding of left-wing parties – known in the press as “rolling dollars”. Afterwards Máté Kocsis, leader of the Fidesz parliamentary group, said that this is the most serious scandal since the fall of communism. These are weighty words, and Máté Kocsis has initiated the declassification of classified material. Do you support this?
We’re studying the case. Permit me not to comment on declassification at this stage, but at all events I need to listen to the opinion of the minister responsible for the intelligence services, and perhaps also the heads of the institutions that carry out intelligence service work. One thing is certain, however: there is good reason for us to be shocked. So although secret service terminology does crop up, this isn’t a complicated matter, and it shouldn’t be mystified or over-complicated. The situation is simple. The fact is that in the period before the Hungarian election – and even after the election – it seems that some of the political parties that sought the trust of the Hungarian people, the left-wing parties and their leaders, were paid – and perhaps are being paid – from outside the country. The amounts involved aren’t peanuts, and it’s obvious to the naked eye that we’re talking about millions of dollars, so large sums of money. And there’s a simple question to be asked here: there’s the question of legality. So I think this is illegal, but that’s for the lawyers to decide. But there’s another non-legal question: if there’s a political leader who wants to lead the country and a political party that wants to lead the country, and they accept money from abroad, what have they promised in return? Money isn’t given for free. There’s no such thing as someone gaining the pity of a major foreign investor or another state and just being given money as a gift. If they give money, they ask for something in return. This is an old phenomenon, and every Hungarian knows it: he who pays the piper calls the tune. The question is where the tune was called from, who paid for it, and what had to be done in return. What I can say is that in principle it’s definitely contrary to Hungary’s national interests for there to be foreign interference in our election campaigns in so crude a way that certain actors, individuals and parties involved in the campaign are financed from abroad. This isn’t only morally wrong, but it also defrauds Hungarian citizens who believe that they’re voting for a sovereign party and a leader with integrity who’s their own master and who has no secret commitments that would prevent them from serving the country’s interests in their work. In football this problem has been solved: when I look at a football team’s shirts, the sponsor’s name is on them, and I know who’s behind the team. The Left hasn’t adopted this practice yet. This is a mistake.
In the past half hour I’ve been asking Prime Minister Viktor Orbán about EU sanctions, the Hungarian economy, energy policy and the issue of “rolling dollars’’.