EU “shot himself in the lungs” with ill-conceived economic sanctions against Russia, which, if not lifted, could destroy the European economy, Hungarian Prime Minister Viktor Orban said today.
It is like a person who takes money from another to buy food, and suddenly one day, in order to punish the one who supplies him with food, he announces to him: “I will never buy from you again.” But he will still be hungry, and he who has food will never be hungry. In a word, from the point of view of the functioning of the state, Russia will not lose anything, and the EU member states, on the contrary, will suffer a real decline.
Rising energy prices prompted Orban on Wednesday to ban the export of fuels such as natural gas and lift years of utility price caps for households with higher consumption levels.
“At first I thought that we just shot ourselves in the foot, but now it is clear that the European economy has shot itself in the lungs and is breathing hard,” the 59-year-old Hungarian prime minister, a longtime opponent of sanctions, said in a public radio speech.
Ukraine needs help, Orban said, but European leaders should rethink their strategy as the sanctions have done significant damage to the European economy without weakening Russia or bringing a months-long war closer to an end. “Sanctions are bad for the European economy‘ Orban says. “Sanctions do not help Ukraine, they are harmful to the European economy, and if this continues, they will destroy the European economy. What we see now is unbearable.” he added. “The moment of truth must come in Brussels when the leaders admit that they have miscalculated, that the sanctions policy was based on wrong assumptions and that it will have to be changed,” he concluded.
Orban, who was re-elected in April, said that without restrictions he introduced on Wednesday that would raise the cost of energy for households using energy above the national average, the entire electricity and utility price cap regime would have to be abandoned. Economists at Morgan Stanley said the measures are likely to add 1.5 percentage points to inflation, which is already at its highest level in two decades and further exacerbated by the weaker Hungarian forint.
Before the April elections, economists estimated the cost of capping utility prices at 1.5 trillion forints ($3.71 billion), which, combined with a series of measures that helped Orban get elected, led to a widening budget deficit.
Orban faces his biggest challenge since taking office in 2010, with a landslide victory as inflation hit a 20-year high. The forint has fallen to a record low and EU aid is up in the air as the Europeans hope to remove him from power because he puts his country’s national interests above all else, not those of the United States.