Zsolt Törőcsik: This week saw the beginning of the US–Russian talks on ending the war in Ukraine, with experts saying that the positive news from these talks has also influenced economic sentiment, both in Hungary and around the world. For example, the forint has strengthened and energy prices have fallen. At the same time, the German and EU economies – which have a strong impact on our country – remain weak, and here in Hungary inflation accelerated in January. The subjects I’ll be asking Prime Minister Viktor Orbán about will include his expectations for the Hungarian economy in the coming months. Good morning.
Good morning.
What are the most important external factors affecting the Hungarian economy at the moment?
I’m happy to talk about external factors, but I think that’s a bad line of reasoning. Of course, Hungary can’t be cut out of the universe and seen only in isolation. But this was also the fashion when I was growing up – I’m talking about the 1970s and 1980s – and then later, during the MSZP–SZDSZ government: whenever there was a difficulty at home, and there was always a difficulty, the Commies said that it came from outside, claiming that “The impact of the world economy is flowing in”; later the Liberals and the Leftists would say, “Well, it’s a world economic trend”. And they used it as an excuse to say that if things were that difficult, then things couldn’t be expected to go well here either. I always found it annoying, a shift of responsibility or a diversion. While it’s true that external influences are extremely important, it’s never a question of what good or bad things are coming in from outside, but of what instruments we have here at home, and what we want to do. So let’s not talk ourselves out of taking action, saying that the external world will be decisive; but let’s say that, no matter what’s going on outside, we’ll still achieve certain goals, we’ll still do it. So this is why I’m happy to answer your question – it’s not my instinctive approach, but it’s still very interesting. There are external influences that help, and those that hinder. To put it simply, this year we’ve made a bet on peace. So we thought that in America the Democratic administration would fall and the Republican administration led by President Trump would come in, they’d make peace, they’d negotiate, they’d reach an agreement, and that peace would bring economic recovery. That was our very simple thinking. If this hadn’t happened, which fortunately we don’t need to think about now, we’d have been in big trouble – because if you’re dealt a losing hand, you’re in big trouble. And this was why this time we didn’t follow the previous rules, whereby we always prepared the budget for the following year by July of the current year, making planning easier and ensuring predictability. This time we didn’t do that, but waited to see what the US election would bring – to see whether we’d need to create a peace budget or a war budget. And we created a peace budget. I’m not saying that we’re lucky; I’m saying that we anticipated the processes well, and therefore the Hungarian economy expects that the external effect will be very positive. Every year we’re failing in the war, we’ve been failing every year so far: 6.5 to 7 billion euros, multiply that by 400 [to convert to forints], and that’s a huge amount. If there had been peace, that money would be in the economy, and it wouldn’t have gone out. And now we expect this to change. So we’re going to get a big boost from outside. Plus we have our own plans, because we trust first and foremost in ourselves; and we hope that the ability to act here at home, the combination of the 21-point economic programme that we’ve announced, and the philosophy of economic neutrality and peace, will give the Hungarian economy a big boost. So I expect a great year. The negative external pressures are coming from Europe. But that’s fairly hopeless, and I don’t see what would change things there. Maybe peace will have a positive impact on the whole European economy, but I don’t see and don’t expect any leadership decision in Europe from Brussels, Berlin or Paris that would have a positive impact on the Hungarian economy. On the contrary, I don’t think there will be action on the agreement we reached in Budapest last November, when we said that energy prices must definitely be reduced, because we’re paying three to five times as much for gas and electricity as the United States, with whom we should be competing. So prices must definitely be brought down, but I fear that this great pledge we’ve made together won’t be honoured. Here in Hungary we’re continuing to keep utility prices down, but I see that the West is unable to step into that particular river, and Europe will continue to face high energy prices. This will slow down and kill the economy.
You’ve mentioned the 21-point economic policy action plan and its elements, so let’s also talk about domestic measures. According to the latest figures, for example, nine thousand people have applied for workers’ credit, and the number of applications for some of the measures in the Sándor Demján Programme are two or three times oversubscribed. Experts say that what tells us most about the economic outlook is how optimistic or gloomy families and businesses are about the future. Now, based on the data you’ve just mentioned, how do you assess the expectations of people and businesses?
We’re Hungarians, let’s start from that position. We’re cautious bulls, which means that we say strong things, but we act cautiously. We have big plans, but we move slowly. The way families manage their finances is defined by security and predictability. This is why women are the real leaders in families. And for women, for wives, their survival instinct basically comes from security, which guides them. And therefore they’re cautious. So there must always be some money for the essentials, some reserves, and so on. Hungarians aren’t free spenders; we’re not as frugal as the Germans, for example, but we think twice about what we spend. And I think that’s good. Economists don’t think it’s good, of course, because they like people to spend their money – because if they’re spending their money, then the money’s circulating, they’re buying goods, they’re consuming, and so on. But there’s more to the world than economics. I think that prudence is a good approach, but at the same time excessive prudence really slows down the economy. So on such a question it’s best not to be doctrinaire, but to let people decide. Housewives will know exactly when to spend and when not to spend. And when they think they can spend, the economy will do better. So I don’t believe that an economic policy, an economic direction, can be set by the Government alone. We have intentions, we have plans, we have proposals, we have programmes: we’re calling on people to participate in the Sándor Demján Programme and the workers’ loan programme. Then whether they participate or not is for them to decide. And it’s mainly their decision that determines what economic policy looks like. To be honest, I don’t like that kind of communication-oriented thinking in which one tries to manipulate them, influence them, using advertising. I don’t like using it. I think common sense offers the best advice, and people will decide matters. What do I see? What I see is that last year everyone was extremely cautious, and this year that caution has been relaxed somewhat. So people are a little braver now. The Government must deliver the results: action must be taken, programmes must be offered. And then everything will get going. It won’t happen in a matter of days, but I think that every element in the economy will start moving this year. These figures that you’ve cited – that already more than ten thousand people have applied for workers’ loans, that the money in the Demján Sándor Programme will be allocated in no time, that elements of the housing programme will be launched – are all indications that the machinery will be set in motion this year.
And what will make people’s daily lives easier when economic growth starts? How can this be expressed?
First of all, there are the small and medium-sized enterprises that need a market. If you aren’t buying, then the small business won’t receive an income. So there’s production and consumption. If small business owners and the general public are thinking positively about the economy, then everyone adds energy to the operation of the economy. If they’re cautious, the performance of the whole economy will be lower. But this is something that’s inevitable. I don’t like it when we think that the economy works under central direction, with the Minister for the Economy saying something, and everyone standing to attention. It’s much more complicated, it’s a much more complex system, because we’re talking about the lifestyles, purchases and habits of tens of millions of people. But, all things considered, I hope that a lot of money has now been transferred to people. Interest is being paid out: in the first three months of this year hundreds of billions of forints will be distributed. I’m looking at the fact that we’ve just paid out 480 billion forints in interest on government bonds. I’m not talking about the principal, just the interest: 480 billion forints. We call these coupon payments. Something will be done with this money – either people will put it into another form of savings, they’ll spend some of it, or they’ll distribute it within their families. But something will happen to it. What’s important is that it gets into the economy. And I think that this kind of money, when it’s released, if that amount of interest comes out of the Treasury and goes to the people, it will certainly have a beneficial effect on the functioning of the economy. And in March we’ll be paying out another 300 billion forints in interest, and that will go to 800,000 bond holders in total. That’s 800,000 families. If I count two, three or four people per family, then you can see that this will affect a considerable portion of the total Hungarian population of ten million people. Just because of this they’ll have more money than they had earlier. And here I’m not even talking about the minimum wage increase, the wage increases that exceed the rate of inflation, and so on. So I see a Hungarian economy in 2025 that will be on the move, that will have impetus.
Before your parliamentary group meeting you said that the Hungarian government is now making policy with a tailwind instead of a headwind, and that this also means thinking big and thinking bold. How might this play out in the spring political season that’s just starting up – either in the economy or in other areas of politics beyond the economy?
I’d like to say most of this tomorrow. There’s a ritual to Hungarian politics, so there’s a timetable to the way we live our lives. Next Monday Parliament will sit for the first time this year, and a few days before that the Prime Minister usually talks about his evaluation of the past year and the plans for this year. We really need to think big, and we have big plans in addition to the 21-point economic action plan that I’ve already outlined. I’ll be happy to talk about them tomorrow.
Then we’ll watch and listen to the State of the Nation address with interest. But on the subject of areas beyond the economy, there’s also been mention of the defence of sovereignty and defence of the measures enacted so far. In this respect, what exactly do we need to think about? What are the measures that may need to be defended in the period ahead?
We’re fighting four big battles with Brussels: the first is the battle of migration; the second is the battle of child protection; the third is defending pensions; and the fourth is defending the reductions in household energy bills. I’ll be talking about these tomorrow. We’ve been fighting this battle, or these battles, for fifteen years – migration perhaps for a shorter period of time, because that’s only become really visible since 2015. And it’s true that up until now this large global financial system, which operates in a coordinated way around the world, has been controlled from two places: from Washington and from Brussels. And the pillar in Washington has fallen – or, rather, there has been a turnaround in Washington. This, by the way, will set the main agenda for the spring political season; because the new US administration has upset the apple cart, if I may put it like that, and has published a list of thousands of facts about how, who and by what means the US budget has been used in recent years to finance activities influencing other countries. And we’ve been greatly affected by this. So money has been pouring into organisations that consider themselves to be civil society organisations, into the media world, to journalists, and to politicians. One of the most important tasks for the spring will be finding out exactly what happened, how it happened, how this system operated, how it influenced government decisions, possibly parliamentary decisions, public opinion, and how it influenced public life in general. And once we’ve understood all this, we urgently need to build and put in place defence mechanisms. I’ll give some shocking and ridiculous examples tomorrow. For example, not talking about ourselves now, many millions – sometimes 10 million euros – have been paid to big Hollywood movie stars from America and entertainment celebrities, to go to Kiev/Kyiv and support the Russo–Ukrainian war. Not to support peace, but to support continuation of the war. And there are plenty of them. The Russo–Ukrainian war has obviously been a priority, but we Hungarians have been subjected to a lot of pressure in order to influence us. But I have to say that this huge machine has been using its manipulation techniques all over the world, from Peru to Kyrgyzstan.
What kind of resistance might this legislative work, or the discovery procedure itself, face in this country? Because we can see that interested parties have already started to voice their concerns.
I don’t expect there to be any resistance. It’s only up to the Government, it’s only up to the majority in Parliament, and how determined they are. There’s a fact-finding process going on in America. We need to join in on that and do exactly what they’re doing in America – not only in fact-finding, but also in defence. There’s a well-developed mechanism over there, we don’t need to reinvent the wheel; and of course, mutatis mutandis, where the rules need to be changed or adapted to the Hungarian environment, we should do so. But essentially we have the template for how a serious, patriotic country – proud of its independence and unwilling to be at the mercy of interference from the outside world – defends itself. This must be transposed to Hungary.
There’s also a European aspect to this suspension of USAID funding, as this week 63 NGOs formerly funded by USAID have written a letter arguing that the European institutions should make up for the funding shortfall. What can we expect from Brussels on this issue? Do you think it will be willing to take over Washington’s role?
First of all, let me say that this effrontery knows no bounds. So indeed, now that they’ve been exposed, we’re talking about political corruption; so if public organisations and actors are paid from a country’s budget in order to gain influence, that itself is political corruption. So if a Member of the European Parliament, or a Member of Parliament from any country, receives funding through all sorts of hidden channels – foundations, grants and so on – in order to represent what his or her clients want him or her to represent, say, to support immigration, to support gender culture, or to support a country at war, then that’s political corruption. You get paid to represent a certain opinion and to influence others with that opinion. One would think that this would be something to be ashamed of. The Americans have thrown the skeletons out of the cupboard. We consider ourselves normal people, and we’re horrified when we think about what a clandestine, coordinated manipulation campaign has taken place here against our national interests. And we’d think that whoever’s been involved in this would now have their heads down and their tails between their legs. We’d think that they’d be ashamed, that they’d at least be ashamed of themselves – maybe not throwing ashes over their heads, but at least saying something like, “Yes, yes, sorry”. That’s not what’s happening now: 63 international organisations – some including compatriots of ours – are writing a letter to Brussels, saying that it’s true that they’ve been engaged in shameless practices here over the past year using American money, but that now no more cash is coming in. “Well, Brussels will make up for it! We’ve had the rolling dollars, now let’s have the rolling euros.” Meanwhile we’re the ones paying money into the Brussels budget. Brussels has no money of its own: Brussels collects money from the countries against which these organisations now want to take action. So here the good Hungarian and European citizens are being swindled twice: firstly, they don’t know that the individuals and organisations portrayed in the media as being independent or representing their own opinions are in fact mercenaries who have been influenced, bought, captured and financed; and secondly, they don’t even know that they themselves are paying for this with their own money, and that they’re being manipulated. And on top of all this, it’s being done so shamelessly in Brussels that a letter is being written about it, it’s being published, and now it’s going to be discussed. And if we don’t fight this with all our strength, it will end up with the rolling dollars being replaced by rolling euros. But we’ll prevent this – we must prevent it and we shall prevent it.
What would be the consequences of continued support for these organisations from there, from Brussels?
It probably wouldn’t be good for the Brussels–Hungarian love affair, the love affair between Brussels bureaucrats and Hungary, which has been fluctuating in intensity. We, for one, would feel cheated. So I think we should expect the disputes between Brussels and the nation states – the truly sovereign, patriotic nation states – to intensify. The Brusselites shouldn’t be underestimated. It’s true that the Washington leg of this great international machine has now been knocked away, but it can still hop well on one leg. So Brussels has a lot of money, it has a lot of power, it has a lot of influence; but the defence mechanisms that we’ll now be bringing over from the Americans in the spring must also be used against Brussels.
Yes, resolving this will be much more difficult work than in Hungary, because earlier you also referred to the need to clean this network out from Brussels. However, there’s a leadership in Brussels that will try to resist this. So in this respect the situation is different from that in Hungary.
Yes, this is undoubtedly true, but Brussels cannot ignore the opinions of the people of Europe, including Hungarians. It’s possible to swim against the tide, but it’s very tiring; and in the end the tide will win and not you, the one swimming against it. It’s only a matter of time before we beat them. But there’s no doubt that the first task in Brussels must be what it was in America. Everyone should, as Sándor Fábry would say, put their hands above the duvet. Let’s pull back the curtain. So investigations need to be conducted in Brussels to uncover the truth, just as they’re doing in Washington. This work has begun, but it’s further behind the work in America. I also follow the Italian press, and there I’ve seen a study – a thorough, large study by a group of researchers – on how Brussels has been funding organisations disguised as civil society organisations which serve Brussels’ interests. For example, it’s been giving a lot of money to organisations which, of course, present themselves as civil society organisations and as independent in Hungary and in Europe, but which argue that we should give Brussels more powers from national competences. All this, I repeat, with our money. Here, for example, we have the fine upstanding Mr. Verhofstadt, someone we all know, who used to attack Hungary in the European Parliament in his peculiarly hysterical manner. He’s no longer there, but in this Italian investigative report we see that he, his organisation, received around 6 billion forints [15 million euros]. He’s received 6 billion forints from the European Commission in order to smear us. And this is partly our money. Or there’s this very interesting programme that Brussels is running, with a very nice name, as all these subversive operations have: “Citizens, Equality, Rights and Values”. They’re spending one and a half billion euros on it – that’s 600 billion forints! So 600 million. And there, too, they’re specifically funding organisations that support federalism: the transfer of powers from the nation states to Brussels. So I think that if all this comes to light, the Brussels leadership will have no choice but to issue mea culpas, confess, apologise, and stop this practice. I’m not saying that this will happen automatically; it will have to be fought for, but we’ll get there in the next year or two.
I’ve been asking Prime Minister Viktor Orbán questions on subjects including the domestic economic outlook, the challenges of the spring political season, and the consequences of the end of USAID funding.