Zsolt Törőcsik: Last year was a difficult one in many respects, as the world had barely recovered from the shock of the coronavirus pandemic when the Russo-Ukrainian war broke out, bringing with it a host of security and economic challenges for Europe – and thus also for Hungary. In addition, the migration pressure on our southern borders has intensified once again, and this time it has not eased with the onset of winter. Prime Minister Viktor Orbán is our guest in the studio. Good morning.
But before we talk about that, let’s start with some breaking news: the murder of a policeman in Budapest last night. The perpetrator stabbed three policemen, before a fourth shot him as he fled. And one of the officers was so badly injured that he later died. What is it possible to say about this case?
The first thing we can say is that we express our condolences to the murdered officer’s family and loved ones. We shall look after them, of course. This also shows that the service performed by the police is dangerous work. We must respect our police officers, we must give them recognition, and we must protect them as much as we can. It’s good news that the perpetrator has been caught. It’s not good news when one hears that the police used their weapons, but it’s good news that they use them when they need to. So, in the final analysis, for our safety such dangerous people can be quickly eliminated from everyday life. Perhaps we’ll have to talk about this later, because we’re still in shock at the loss of our police officer. But let’s think about why we’re shocked: it’s because this isn’t an everyday occurrence. Budapest is a city where murder – especially the murder of a policeman – is far from being an everyday occurrence, and is extremely rare. So this is something which we’re not accustomed to, and it shocks and disturbs us. This means that our police officers are doing their job well, that in Hungary we don’t shrug our shoulders when such an incident occurs, we don’t say that we heard the same thing yesterday, that it happens all the time, and that in some parts of the city – as in many Western European countries – it’s almost a daily occurrence. Instead we say, “Good Lord, what happened?” It reminds us that our lives are safe, a crime reminds us that our lives are in fact safe. This is something of great value, and it must be appreciated.
This should be especially appreciated in today’s world, because – as I said in the introduction – last year was in many ways a year of change and not a year of security. Do you see 2022 as a turning point for the economic and security world order as we know it?
It’s still too soon to speak as boldly as you’re encouraging me to. After just a few months it perhaps seems pompous to say that the previous year was this or that in historical terms. But we cannot rule out what you’re saying: we cannot rule out the possibility that 2022 was indeed the year that clearly indicates that something has changed in the world and in our lives, and that we – not just Hungary, but the whole of Europe – have entered an age of danger. In 2020, during the pandemic, one might have thought that sometimes a global pandemic occurs, but that this wasn’t an epochal event and that it would run its course, as it did in a year and a half, especially if health professionals do their job as well as they did in Hungary. But after the pandemic now war has come, after the war an energy crisis, bad sanctions, and resulting high inflation. Meanwhile, migration continues to increase, and the pressure on our borders is now about the same as it was during the great migration invasion of 2015. So all these things are adding up, and the war seems to be dragging on, getting ever bloodier. So it may well be that in a few years’ time it will become clear that 2022 was the year in which we Europeans entered the age of danger.
What can Hungary do in this situation? Or how might this affect its long-term future? Because geographically – and obviously, arising from this, in cultural and social terms – we’re between the two great blocs. This is obviously good in times of peace, because we understand both sides perhaps better than they understand each other; but in times like these, when there’s no dialogue, can’t this be dangerous? Or should one again see opportunities?
Yes. I think the question that we need to clarify first, or that Hungarians need to clarify for themselves, is how we relate to the threat itself. There are two ways of relating to it – and this is as true in the life of an individual as it is in the life of a nation or a state. The first way is to behave like a hedgehog: one curls up, turns one’s spines outward and responds to danger in a defensive way. This is reasonable behaviour, because in times of danger one must defend oneself. But it’s also a self-defeating strategy, because it paralyses. So you turn in on yourself, your spines are pointing out, but you don’t move. I think that in politics that’s a very big mistake. I see countries and leaders who react to a crisis in this way: they freeze. I think that for Hungarians the most important thing is to react actively, to respond actively to the crisis. As the Hungarian language has it, we shouldn’t let ourselves go. So there may be threats, but Hungary won’t let itself go. Obviously the result of the general election also influences one’s feelings, but 2022 was an important year, a year that’s dear to my heart, because Hungary responded actively to all the threats. We took action, we didn’t let ourselves go, and Hungary won’t let itself go. As you say, there may be blocs, the war may drag on, there may be this wretched sanctions regime which is driving up inflation and energy prices. But we’re not paralysed, we don’t simply want to be passed over or somehow survive it; instead we’re building defensive positions, we’re erecting defensive lines, we’re responding. We’ve introduced a fund to protect the reductions in household utility charges. It’s undoubtedly true that the misguided EU sanctions mean that the whole world has to pay an energy surcharge. In 2021, for example, Hungary paid 7 billion euros for the energy it imports – because the energy we use in Hungary comes largely from abroad. And in 2022 we paid 17 billion. But we didn’t say: “Folks, this is how it is, pay out more money everyone, just survive somehow.” That’s not what we said. The Hungarian government said, “Let’s join forces and set up a common fund for the protection of reductions in household energy bills. Let’s collect money from wherever there are windfall profits – the banking sector, the energy sector and a few others, commerce and so on – and put it into the fund for protection of reductions in household energy bills; and from that let’s protect the reduced price levels, let’s protect families at least up to the level of average consumption.” This is an active response to a threat. So this is the essence. Old threats will remain, and there will be new threats, and what I expect from Hungary – from ourselves, but especially from the Government – is that in 2023, when new threats occur, the problems should be dealt with in this way, with this attitude. Let’s not forget that, if we translate this into language we can all understand, Hungary didn’t simply pass on the increased energy prices to people, as most countries do almost everywhere, but we set up a protection fund and protected reduced price levels – so that every Hungarian family received 181,000 forints a month. Of course people haven’t noticed this, because the postman hasn’t brought them 181,000 forints and hasn’t handed this over to them; but at the same time nobody came to take it from them. And so we haven’t allowed millions of families to be ruined. The liberal economists and the Hungarian left say that our policy of cutting utility bills is irrational, that it’s irrational to cut utility bills, that we can’t afford this, and that we must force people to pay the prices; but how many Hungarian families would have been ruined if we’d heeded those arguments? If we’d heeded them, I think that at least a million families in Hungary – all the poorer ones – would have been ruined. So we have to defend ourselves. The right response to danger is active, proactive defence.
We’ll talk about the situation of the Hungarian economy later, but the European Union has also given its active response to the threat, and in 2022 this has been the sanctions policy. It’s interesting that the other day Guy Verhofstadt – a member of the Liberal Group in the European Parliament – wrote that there have been nine packages of sanctions, and their impact has been less than zero. And more and more people agree with that position. The debate is more about whether to increase sanctions or abolish them. At what stage is this debate now?
What I’d personally like to see happen, and I think it would also be in Hungary’s interest, is for someone with enough courage – and with strong biceps and broad shoulders – to come along and say: “Folks, we’ve made a pig’s ear of this.” The Hungarian vernacular can express this quite graphically. They should say, “We’re going to put a stop to this, because this is going to be a big problem.” And if the sanctions were lifted, within moments the price of energy would fall; and with it the general level of prices – in other words inflation – would immediately halve. So the inflation rate would be cut by at least half, and possibly more. This would simply require a political decision in Brussels. But I don’t see anyone with such big biceps and such a broad back. There is courage, that’s what we have, we’re here, for example, or I’m here personally; but that doesn’t count, because in order to change this – in order for this courageous stance to have consequences – you’d have to be German or French, to be strong enough to change the position of the whole EU. I can put the brakes on the damage. So I go to Brussels without being able to reverse the opinion of the big states; Hungary doesn’t have enough power to do that – and so, by definition, neither do I. One thing I can do is to try to limit the damage: to say that there will be trouble, that when we feel that the Hungarian national interest is being seriously damaged we’ll veto a measure, that we’ll stand up for Hungary and we won’t yield. But we can’t change the sanctions policy, we can’t change its course. This is why I believe that in the coming period such a lack of courage and strength will result in this floundering continuing in Brussels, with us introducing sanctions that turn out not to work. Behind this is another culture shock that’s having an effect on us Hungarians. This has to do with the Germans. When I was growing up I was always told at home, “The Germans, they’re the ones! The Germans are precise, they’re engineers, they calculate, they don’t rush, they know what they’re doing.” Now I look at what they’re doing, there’s a German president of the Brussels commission, these sanctions are a fiasco, they’re miscalculated, they’ve not been calculated in a professional way. So recently there’s been a significant erosion of our faith and my faith in the Germans, and in their ability to manage crises that springs from German engineering precision.
Meanwhile the damage is increasing. Yesterday a Eurobarometer survey showed that 39 per cent of people in the European Union are unable to pay their utility bills on time. That 39 per cent is a huge proportion and – especially in the light of the [EU] corruption scandal – it begs the question of whose interests are really being served by Brussels.
Well, when I talk to other European leaders and they find out that in Hungary we have a system for protecting reductions in utility bills that gives every family the euro equivalent of around 450 euros a month, at first they think that they’ve misheard me. For them this is unthinkable, it can’t exist! So over there it’s an impossibility for every Belgian, Spanish or French family, for example, to receive 450 euros per household through reduced energy bills. So they can’t imagine it. I understand why this is so. The reason they can’t imagine it is because it’s very expensive. And in order to pay that much, you have to collect it. And to do that you have to be strong, because you have to take it from someone. You have to take it away from where inflation and the rise in energy prices have created profits. You have to approach the energy companies, you have to create a law, and you have to take the extra profit from the energy companies – and from the banks as well. Furthermore, you have to make them understand that this is a temporary measure and they have to accept it for the communal good. And in Hungary – to their credit – they understand this and accept it. But this kind of position of strength isn’t enjoyed by Western European governments. They can’t collect the amounts of money that they can then give to the people through reductions in utility bills. The result is that the people of Europe lose out as a result of this failed sanctions policy, and lose out as a result of the war. It’s certain that America is winning from the war, and it’s certain that Europe is losing from the war. There’s a debate about whether the Russians are winning or losing from the war, but if we’re talking about money they’re not losing so much. They’re losing human lives, and that’s more important than any money, but overall, economically speaking, it’s safe to say that the only loser – or at least the biggest loser in this whole conflict that’s come about – is Europe.
The Hungarian government has been in dispute with Brussels not only about sanctions, but also about EU funds. This seemed to have been more or less settled at the end of last year. This week, however, the Commission stopped the funding for Erasmus programmes [related to Hungary]. The first and most important question is this: What should now be done by those students who wanted to study abroad under this programme in the coming years?
They should prepare in the same way that they’ve been preparing so far, because in the future they can go if they want to. So it’s certain that Hungarian students won’t be disadvantaged in any way. So Hungary, as I’ve said, won’t let itself go. We won’t allow our students to fall victim to any decision from Brussels. That’s out of the question! So every student should prepare as they’ve been preparing so far. There will be a scholarship programme, and we’ll agree on it with the people in Brussels; but if we don’t, the Hungarian budget will pay for it. Because students aren’t going on holiday, they’re going to study, and if we give students scholarships it’s an investment for our national community, because after their studies they’ll be smarter, better prepared and able to do higher-quality work for the benefit of the whole community. So it’s in Hungary’s national interest to have bright students who are familiar with foreign countries, who have been there and have brought knowledge back home from there. We shall not forego this resource, Hungary shall not forego the potential that lies within the talent of young people. And so there shall be scholarships – just as if we hadn’t heard a squeak out of Brussels. And another thing… I don’t know, are you a family man?
Yes, yes, I have two children.
So those with children are asking what kind of people these are. Now, there may be a dispute between Hungary and Brussels, and we may disagree, but what kind of person takes revenge on someone else’s child or on the younger generation? What kind of thing is that? There are people like that in Brussels – just think about that. They want to settle a political debate by taking revenge on young Hungarians. But of course we won’t let them.
But what’s behind this debate? Because among the requests there didn’t seem to be a demand related to this, related to the Erasmus programme; and many experts say that there’s a system of foundations, university foundations, in Western European countries which is similar to that in Hungary.
Of course, the specific objections that are raised about the Hungarian education system – there’s also a good Hungarian folk expression for this – are donkey-talk: they’re nonsense. In Western Europe it’s common practice for politicians to sit on university boards of trustees, and there’s nothing extraordinary about it. There’s clearly a double standard here. We have to put this in a more general context, and then we have to step aside from Erasmus, because this isn’t about education. It’s about something else. It would take an entire afternoon to explain it in detail, because otherwise it might sound too crude an analysis, but now I’m forced to put it this way: they wanted a change of government. So Brussels has a vision of the future, and it’s different from what Hungarians think about the future. They think that Europe must be changed, that it must be made diverse; and that first of all migrants must be allowed in, because that’s good. And they’ll let millions of them in. And they see it as wrong for there to be people who don’t do this, like the Hungarians – because we think it’s not good, it’s bad, and we don’t want to live with migrants at all, we want to live with ourselves, and we’re defending ourselves against it. They want to force us into this, but they haven’t yet succeeded in forcing this upon this government, the national government in Hungary. They have a vision of the future, of how to educate children. We think that this is a matter for us, the parents, to decide how to educate children. They think that related to these confusing issues like homosexuality, LGBTQ and this whole gender identity issue, there are civil society movements here which should play a significant role in educating children – sometimes instead of parents: “So let’s allow them into schools.” It makes the hairs on the back of our necks stand up to think that such people would talk to our children in school – and what’s more, about all sorts of things in life that we consider to be nonsense. We’ll say what we think is the best way for a young person to start out in life. But they think that what we’re doing isn’t right. And thirdly, they want to transfer as many powers as possible to Brussels, because they want a great European empire – not with Member States, but with provinces, with prefectures. But we are Hungarians, and for us national independence is like breathing – it’s non-negotiable. This is the essence of the dispute. They say that since the Hungarian government is constantly standing up for its own conceptions and for Hungarian interests, a change of government must be achieved in Hungary. This is what they wanted before the election. This is why they bought the Hungarian left. This is why the dollar-fuelled left was created. They bought the Hungarian left and gave them money: “Bring down the Government, win the election, we’ll help you do that, and then do what we ask you to do from Brussels.” That was the name of the game. But the Hungarian people decided otherwise. And Brussels was confronted with the fact that it wanted a change of government, but the Hungarian people wanted something else. And now what can they do with this government? They’re still trying to force us to do what Brussels thinks is right, regardless of the election result. And all the conflicts that are in progress – from Erasmus onwards – should be seen in this context. And they thought that this would be the most eventful part of this six-month period – let’s say intellectually and by covert means – and that Hungary could be financially cornered. Look at the bought left-wing politicians here in Hungary, and their expert advisers! Well, what did they say? Without the EU money Hungary would collapse, there would be mass unemployment, Armageddon, and here the world would come to an end… Compared to that, we’ve reached the beginning of January, and now every economist knows that Hungary has never had the financial reserves that the Government has built up over the past three months. Our financial reserves are at an all-time high – partly because of the reductions in utility bills, because we need to collect for them, and partly because we’re prepared for the age of danger, we’re actively prepared for difficult times. And this is why there have never been such financial reserves in Hungary’s economic history. So not only can Hungary not be cornered, but we can manage without that money. Of course we could get by more easily with it, things would be simpler and we’d move faster, but Brussels completely misunderstands the situation when it thinks that without its money the sun won’t rise; that’s like thinking that the sun won’t rise if the rooster doesn’t crow. This is what they’re confronted with now. I think that this frustration in Brussels is also being felt in the Erasmus issue, and that they’re hitting our children: they want to hit them, because they don’t know what to do with the Government.
Since you’ve mentioned the reserves, let’s talk about what they’re enough for. The 2023 budget has been amended, and we’ve already talked about how the public will be protected this year by the reductions in utility bills. But what about businesses? Because after all they hold the key to preserving jobs.
This is the most important thing, because when there’s work there’s everything. So the Hungarian economic strategy, which has been developed by successive governments under my leadership since 2010, is based on this. And my political credo is also based on this: that the primary task of politics in Hungary is to create an economic system in which everyone can find work. Anyone who wants to work should be able to work. So far we’ve succeeded in this. The number of people in work now is more than one million more than it was in 2010, following the terms of left-wing governments. This is a huge number. This is despite 2022 being the year of dangers. This is despite a wrong-headed sanction, despite a sanction surcharge on energy. If you look at the actual economic data, you’ll see that never before have so many people in Hungary been in work as were in work in 2022. If you look at the past year, you’ll see that – contrary to Brussels’ intention to corner us financially – investment in Hungary has never been as high in a single year as it was in 2022. And I can tell you for sure that in 2023 it will be even higher, and we’ll break another record. The truth is that the Hungarian economy itself is doing well, thank you very much. Jobs aren’t being lost, and there’s no wave of bankruptcies. There are difficulties because of high energy prices, and this is a serious challenge for the owners and managers of companies, who have to change their financial routine, change their profile and introduce energy-saving solutions. So they have to work to protect themselves from the consequences of this economic situation; but I see Hungarian owners and managers of capital and companies as being talented enough and prepared enough to do this. The Government is also providing the help, because we have programmes to support small businesses, we have a credit programme through the Széchenyi Card Programme, and we have a factory rescue programme. So we’re constantly consulting and working with the business community, they tell us where they’re feeling the pinch, where help is needed, and we can make decisions quickly enough to help them retain jobs. I’m putting protecting jobs at the top of the list of priority tasks for 2023.
Jobs are one question, and the other question is how much one gets paid for one’s work. And from this point of view, according to an OECD study, in the first three quarters of last year Hungary was the only EU country where wages grew in real terms in the first three quarters: the rate of wage growth exceeded the rate of inflation. Can this be sustained this year? Because on the one hand we can see that the European economy is likely to sink into recession, and on the other hand we can see that inflation in Hungary is still quite high.
In essence wages aren’t decided by the Government. And that’s a good thing, because what level of wages an economy can afford, what’s good for people and what doesn’t ruin companies isn’t decided by the Government, but by stakeholders in the life of the economy. This is why we have a system in which the minimum wage is agreed by employers and employees, with the Government just approving it and then announcing it. And I still don’t want to see the Government appropriating this power, but I want to let the economic players decide what’s acceptable and what isn’t. Now that we’re in an age of danger, and dangers don’t respect the calendar, I don’t think in terms of 2022 and 2023, but of the two years together; so in 2022 we entered the age of danger, and it’s worth looking at what’s happening from 2022 onwards. So the 2023 figures should always be seen in relation to 2022. And I can tell you with certainty that, taking 2022 and 2023 as a whole and considering them as one period, wages in Hungary will increase in real terms over the two-year period.
With all this going on, how do you think an economic downturn this year can be avoided? I’m talking about what’s expected in Europe.
I’m exactly the opposite. As I said before, we aren’t hedgehogs, but active crisis managers. The Government is ambitious. This government can be accused of many things, and it’s not without its faults; but one thing it’s never been accused of is laziness, or passivity, or hesitancy, or sitting on its hands. Such things aren’t typical of it. This is a government that acts, and it’s ambitious; because, after all, people have self-respect, and the country also has collective self-respect. And Hungarians’ problems always worsen when Hungarians somehow let their self-respect slip, forget about it and behave in a way that’s unworthy of them. And the Government’s job is to constantly prove to the entire national community that this is a serious country, that it’s capable of great things, and that it must therefore set ambitious goals. And this will also be the case in 2023. This is why I always say – and I apologise for referring to myself – that during the period in which we have to deal with a crisis, we won’t abandon our great national goals. For example, from now on anyone under thirty who gives birth to a child will be exempt from income tax. So we’re not reducing the family support system, we’re expanding it. We’re expanding job protection measures, not reducing them, and so on. So I’m certain that the Hungarian government will have to set ambitious goals for 2023. The first such ambitious goal is to bring inflation down to single digits by the end of the year. I’ve communicated this to the Governor of the National Bank and to the Finance Minister, telling them that this is what Hungary and the Government expect from them. I think this is possible, and we have a good chance of achieving it. The second important goal is that we shouldn’t be one of the countries – one of the European countries – with an economic performance in 2023 that’s lower than it was in 2022. Such a situation is called a recession. So in 2023 Hungary must continue to grow. This is how we’ve planned the budget: for 1.5 per cent growth. And although we rarely talk about it, it’s important to mention that despite 2022 being an election year and bringing an energy crisis, last year we also reduced the budget deficit and state debt compared to the previous year. Ambition, ambition, ambition!
In the last half hour I’ve been asking Prime Minister Viktor Orbán about the sanctions crisis, the Erasmus affair and the state of the Hungarian economy.