Orbán: European recession arises directly from Europe’s participation in the war, which Brussels calls sanctions

Among the country’s extraordinary achievements this year, Orbán mentioned the general election in the spring, the country’s managing to stay out of the war in Ukraine, as well as its withstanding the pressure of migration. He also mentioned Hungary’s ability to finance higher energy prices, preserve its work-based society, and strike an agreement with the European Union concerning community funding.

Staying out of the war in Ukraine will continue to be of paramount importance for the country, Orbán said, adding that another top priority was to ensure economic growth as opposed to recession elsewhere in Europe.

Concerning the April elections, Orbán said voters had rejected “foreign interference” as well as the “dollar-financed left”, adding that “I don’t think this will change anytime soon.” He said the vote had been a “real freedom fight” in which Hungary had to “defend its independence and sovereignty” because “international players participated in the vote with unprecedented force”. “Some three billion forints were up against three million voters and the latter won,” he said. Voters achieved “the most important thing: a stable, capable and predictable government”, he said, adding that “it is the greatest asset in hard times”.

The prime minister also noted that Hungary was the only country in Europe not to have had early elections since 1990, adding that “Hungary is first in terms of stability and predictability”. He said the outcome of the vote was even more valuable in light of the fact that “Brussels and the liberal world wanted to see a leftist government”. That is why, he said, the Hungarian government had not been able to negotiate agreements with the EU as early as the summer of 2021, because “the EU wanted a change of government and would not give [Hungary] money before the elections”. He added that “the goal now is the same with Poland” where “Brussels also wants to see a leftist government”.

Concerning the war, Orbán said Hungary “must stay out” of it, partly because of the Hungarian minority in Ukraine, “partly because war is always bad … several hundred [ethnic] Hungarians have died already as soldiers in the Ukrainian army,” he said. So far, he said “the war has only made losers” with both adversaries and also the European economy on the losing side.

Hungary has suffered serious damage and paid “sanctions-related surcharges”, he said, adding that in 2023 nearly all European countries would face the challenge of how to avoid recession “arising directly from the war and Europe’s participation in the war which they call sanctions”. Hungary must “not allow itself to be dragged into the war”, while a large part of Europe “has been dragged into it”, he said. Countries sending weapons to the warring countries are in the war “ankle-deep” and those training soldiers of one of the adversaries are “knee-deep”, while those providing operational training are “up to the waist” in the conflict, he said. Those financing one of the countries in terms of not only its war-related costs “but the operations of the state, as the EU is doing with 18 billion euros” are “in the war up to the shoulders”, he insisted, adding he hoped that Europe would not get involved “up to the neck”.

Despite huge international pressure, Hungary has maintained its position calling for an immediate ceasefire and peace talks, he said.

Meanwhile, Hungary has met its “humanitarian and Christian” obligations to help those in trouble and the country launched its so far largest humanitarian programme to help the Ukrainian people, the prime minister said.

Orbán also highlighted Hungary’s halting migration and the protection of price caps on household utility bills among the country’s achievements in 2022. Hungary is the only European country that is simultaneously under migration pressure from two directions, the prime minister said, noting the pressure on the southern border and the influx of refugees from Ukraine. Orbán called it a “fantastic achievement” that the Hungarian authorities had thwarted more than a quarter of a million illegal entry attempts.

He said it was also a success that Hungary had been capable of financing the increased energy prices, noting that the country this year has had to pay 17 billion euros for energy compared with 7 billion last year. Hungary was able to cover these costs while upholding the essence of the price caps on utility bills, Orbán said, adding that this would also be the case in 2023.

Hungary this year succeeded in preserving its work-based society, Orbán said, adding that employment in the country had never been as high as in 2022. Employment is at a 30-year high, with 74.6 percent of Hungarians working, he said. Though 2022 was an election year, Hungary still managed to reduce its budget deficit, “which is very rare in European politics, but not unprecedented in Hungary”, he said, noting that the same had happened in 2018.

The government has also restored the 13th month pension, families were refunded a significant portion of their taxes and a tax exemption was introduced for Hungarians under the age of 25, he noted.

Orbán said it was also an “exceptional achievement” that Hungary had reached an agreement with the European Union, overcoming the “hungarophobia” which he said had taken hold in the liberal world. The prime minister expressed hope that the agreements reached with the EU would be signed in the next couple of days.

As regards Hungary’s goals for 2023, Orbán said: “We will be on the defensive in 2023 but won’t give up on our great objectives.”

Staying out of the war in Ukraine will continue to be of paramount importance for the country, Orbán said, adding that another top priority was to ensure economic growth as opposed to recession elsewhere in Europe.

The government also wants to ensure that inflation is brought down to the single digits by the end of 2023, he said.

Speaking ahead of a government session later on Wednesday, Orbán said the government was expected to decide on extending young people’s personal income tax exemption from 25 years of age to 30 in the case of mothers.

“Sovereignty, freedom, full employment and assistance to families — those are the great goals we won’t give up even under predictably difficult conditions,” Orbán said.

Asked about the corruption scandal in the European Parliament, Orbán said Hungary, as a member of the EU, could not view the issue as an outsider. “Fortunately, the case doesn’t concern Hungarians, but it’s bad news for all EU member states,” he added.

Orbán said Hungary had disagreements with European institutions, which he said the country wanted to transform, but these institutions’ loss of credibility makes the community which Hungary is a part of weaker.

He said the case vindicated the Hungarian parliament’s decision regarding the future of the EU, namely that the EP in its current form needed to be wound up and the body should comprise representatives delegated by member states. The prime minister argued that lawmakers in national parliaments were under much stricter supervision. He noted that the EP in the past had been made up of lawmakers delegated by national parliaments, adding that it would be worthwhile to return to that system.

As regards his political view on the case, Orbán said the only solution against swamping was to “drain the swamp”.

Orbán said it could not be declared that corruption was only present on the left side of the political spectrum, referring to reports that more and more European People’s Party politicians were being implicated in the corruption scandal. This is a danger that threatens democratic politics everywhere and which must be fended off, he said. The question is why there weren’t any defence mechanisms in place given that “everyone in Brussels knew that this didn’t just start now,” he added.

Concerning education being the responsibility of the interior ministry, Orbán said leaders had to be competent in leadership and could rely on experts when it came to various professional areas. Leaders must integrate knowledge into the area they control, he added.

The government’s intention had been to consult with unions on matters concerning financial demands and with teachers on professional matters, the prime minister said.

Orbán said that in 2007, the dismantling of cordons by then-opposition Fidesz officials had been an act of protest against the “police government” which he said had violated freedoms and the law on the right to assembly.

He said in connection with protests by teachers that all public sector employees needed to respect the legal forms of protesting, “otherwise they harm those who don’t deserve it”. In the public sector it is twice as important not to approach things from a political aspect, but rather to stick to the law, he added.

As regards the state of public education, Orbán said the prime minister should listen to parents, students and teachers rather than pass his own judgment. The knowledge young people bring to their first job is also important, he added.

Orbán also said that what mattered most was young people’s physical and mental health, noting that the government had addressed this by increasing the number of physical education classes and introducing religious education classes.

The prime minister said he was on the side of teachers on the issue of pay rises, noting that following the recovery from the financial crisis after 2010, education had been the first area where the government introduced the career model.

He added that a more significant pay rise was needed to correct the disproportionality in “unacceptably low entry salaries”.

Asked about Hungary’s border fence, Orbán said that even though the authorities had thwarted 250,000 illegal entry attempts this year, some migrants are still successful in breaking through the fence. And even though some 2,500 people smugglers have been jailed, there will be further people embarking on the trade, he added.

Orbán noted the recent establishment of the border patrol regiment. Hungary welcomes Croatia’s accession to the passport-free Schengen zone, he said, noting that this will allow the country to move patrols to the Hungary-Serbia border, “which means that we’ll be more effective than before”.  The prime minister also said that Hungary had reached an agreement with Serbia and Austria on forming a border protection alliance. Their first task, he said, would be to push the line of defence on the Serbia-Hungary border to the North Macedonia-Serbia border. The plan is to strengthen the Serbia-Bulgaria border the same way, he added.

Orbán stressed that the existence of an independent and sovereign Ukraine was also in Hungary’s national interest. Hungary does not have an interest in the permanent separation of the European and the Russian economies, so an attempt should be made to save whatever can be from the economic cooperation with Russia, he added. Hungary does not want to get dragged into the war, but wants to give Ukraine the help dictated by humanity, he said.

As regards Hungary’s relations with Poland, Orbán said the two nations shared a common fate on the basis of history, which gave them a strong friendship. Also, Hungary and Poland agree on the strategic goal of the war to ensure that Russia is not a threat to European security as well as on the need for a sovereign Ukraine between Russia and the rest of Europe, he said. But the Poles believe that the Ukrainians are also fighting for their freedom and security, Orbán said, adding that in his view, Ukrainians were “fighting heroically” for their own homeland. Hungary is not protected by Ukraine, but by itself and NATO, he said.

Asked if the Hungarian government maintained its offer to host ceasefire or peace talks, Orbán said the offer was open, but added that such talks were not hindered “by a lack of venue” but “because of the warring parties or the powers behind them have not yet made such a decision”. “Basically US-Russia talks are needed … without such talks there will be no peace,” he said.

Hungary participates in providing training for Ukrainian military health personnel for a humanitarian reason, Orbán said.

The prime minister said he was not planning on a visit to Kyiv. He added that he had personally met Russian President Vladimir Putin in February for the last time, and that they had not talked by phone since the late Soviet leader Mikhail Gorbachev’s funeral.

On another subject, Orbán said Hungary and Qatar had signed an energy and investment deal, but it would soon be followed by “longer, inter-governmental talks touching upon strategic areas, too”.

The government aims to reduce Hungary’s dependence on energy imports, Orbán said, adding that nuclear energy involved the least such dependence, that is why the government had decided on upgrading the Paks nuclear plant. The outcome of the project will depend on the government’s efforts to “prevent the entire nuclear energy industry from being included in the (EU’s) sanctions list,” he added.

Once the Paks upgrade is complete, Hungary will be able to significantly reduce its gas consumption, Orbán said, and suggested that attempts at such reductions so far, like reducing the gas consumption in public institutions had been insufficient. He noted the recent agreement with Azerbaijan, Georgia and Romania on building an electric cable, while pipeline connections were being upgraded and the government was also studying opportunities to receive LNG delivered by sea.

Concerning Croatia’s increasing the transit fee for using the Adria oil pipeline, Orbán said that “Hungary wants to pay a fair price and Croatia wants a fair price, too, therefore talks are necessary”. The European Commission has not yet made a position on the matter, he said.

On the subject of China, Orbán said its significance as an investor had increased in recent years and called endeavours to “isolate” China “ill-advised”. “Everything must be done in the interest of the best possible ties between China and Europe, and China and Hungary,” he said. Hungary needs Chinese technology and skills, he added. Answering a question on the Fudan University campus in Budapest, he said building good ties required “a knowledge of eastern economic philosophy” adding that “all university training coming from Asia is an asset”.

Although Hungary disagrees with other EU countries on a number of issues, this does not mean isolation, the prime minister said. Isolation implies that someone stays away from common decision making; Hungary, however, takes part in all decisions that determine the future of the community, he added.

While belonging to a community and therefore not being isolated, Hungary is arguing at full strength against the formation of blocks, Orbán said, noting that whenever military or economic blocks had been formed over the past thousand years, Hungary ended up on the loser’s side. “If there are blocks, we are the eastern periphery of the Western world. If there is East-West cooperation, we are the centre of the world,” he said.

Orbán called the rule-of-law procedure designed by Brussels a failure, saying that rule of law would require clear definitions and standards, ones that are missing from Europe because of the different cultures and traditions.

Orbán said he did not question the good intentions behind the creation of the rule-of-procedure but added that it “is in fact dismantling and disintegrating the European Union”. If the question is raised in the form whether we remain Hungarians and fight, then we will remain Hungarians and fight, he said.

Asked about foreign support for the left-wing media, Orbán said he saw no difference between left-wing parties and the media. It follows, he said, that this support qualifies as political support.

Orbán said “we oppose all sanctions. We are generally against the policy of sanctions. If it were up to us, there were no policy of sanctions at all”. This instrument, he added, could only be used in a narrower, more targeted and more carefully planned way.

Hungary has not supported and would not support the EU packages either in the future but “we cannot veto them at every moment without destroying the community of the EU”, he said.

Concerning the 18 billion euro support for Ukraine, Orbán called it a “bad solution” that the financial assistance was not provided on an intergovernmental basis but through the EU institutions. Hungary did not support the idea of a debt community, he said, adding that finally an intermediate solution was found.

The prime minister attributed inflation to several factors, some of which, he said, may affect the government. These include exchange rate movements, economic productivity and public debt.

“If energy were not a matter of Brussels sanctions, Hungary’s rate of inflation would perhaps fall by half,” he said.

The prime minister said it is hard to understand how any price cap could generate inflation. He added that bankers had protested every price regulation the government had rolled out over the past ten years.

“Price caps were not introduced for bankers, but for people in need,” he added.

Orbán conceded that fluctuations in the forint’s exchange rate form an argument for adopting the euro, but said accession to the euro zone would cause economic growth to slow. “If Hungary’s economy is to grow and there is to be convergence, it’s better to stay outside of the euro zone. If stability is more important than convergence, then it’s better to join,” he explained, adding that he takes the position that convergence is more important.

Orbán said the government does not plan to reduce the value-added tax. The prime minister called it a “key to the success of the Hungarian taxation system that the country has the lowest labour taxes in Europe. The central budget, he said, collects the money it needs through consumption rather than through labour taxes. “This is a tax philosophy and we don’t want to change it,” the prime minister said.

Orbán said the government was not planning to negotiate with the IMF on taking out a loan because the conditions attached to such loans “usually hurt people”. The best money is always the one raised from the money market, he said.

Asked about troubled steel maker Dunaferr, Orbán said the government would try to “save what can be saved”, but added that the situation is “chaotic” as even identifying Dunaferr’s owner is problematic. He added that Dunaferr has about 500 billion forints in liabilities.

The prime minister confirmed press reports that Peter Hoppal, the state secretary for culture, would in future be assigned a post of government commissioner.

Asked about a scarf he had worn at a soccer match, which depicted pre-WW1 “greater Hungary”, Orbán said “Hungary is a 1,100-year-old country, we are surrounded by historical symbols which symbolise national unity as part of our everyday life”.

He said he did not accept any opinion which regards an ethnically homogenous community less valuable than an ethnically mixed one.

The prime minister hailed that Benjamin Netanyahu has been reelected as Israel’s new prime minister. “Netanyahu was the first Israeli prime minister to pay an official visit to Budapest in 2017 after 30 years,” Orbán said, adding that the visit “opened a whole new chapter in Hungarian-Israeli relations”.

Asked about his future plans, Orbán said he had been in opposition for sixteen years before and now it is his seventeenth year in power as government head. “So, I don’t feel it is time for me to retire [from politics],” the prime minister said.