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The autumn session of Hungary’s single-chamber Parliament started with a speech delivered by Prime Minister Viktor Orbán, in which he made sure to leave nothing and no one out. It is a speech that sent out strong messages both to Hungarians who, for their most part, voted for him and now feel overwhelming pressure from the highest inflation rate in the EU, as well as to Brussels. Viktor Orbán did not forget to pay his respects to the High Porte in Kremlin, which, until further notice, keeps the gas flowing towards Budapest, to ensure the five-year deal signed with Gazprom was not for nothing.
That Orbán is Moscow’s Trojan horse in the European Union is no longer a secret to anyone. However, Viktor Orbán’s plans have started to tangle.
Orbán’s policies have deepened Hungary’s economic crisis
Hungary’s strongman made fiscal policy-making his own remit, robbing the Central Bank of this prerogative, yet tangible results are yet to be observed. Without EU funds, it is hard to believe the Orbán Cabinet will survive the winter unscathed. Orbán promises to keep the inflation below 10% by the end of the year, considering that, just three months away from the New Year, Hungary is struggling with an inflation rate of 16.4%, admittedly lower compared to June, when it stood at 17.6%. Suppose this downward trend continues: it would still be impossible for Budapest to cap inflation at 10% by December 31, 2023. To Orbán’s mind, multinational corporations are to blame. “To prevent multinational commercial enterprises that apply unwarranted price hikes”, Budapest has introduced an online price monitoring system and forced companies to lower prices, Orbán told Hungarian MPs in Budapest.
In the 2023 report of the OECD, experts have recommended Hungary carry out a number of bold measures designed to curb the budget deficit and, last but not least, to unlock access to European funding.
Nevertheless, Moscow’s magical solutions seem to carry more weight in Budapest. As a result, Orbán promises to keep energy prices in check if necessary, as part of a miracle solution to curb inflation.
Restrictive monetary policies, the downfall of the country’s market credit rating and the partial freeze on EU funds addressing Hungary have in turn spelled economic trouble for Budapest. The country’s high reliance on energy imports and its export-oriented industries have made Hungary vulnerable to the negative evolutions on global markets.
Hungary’s overt hostility towards Ukraine is meant to please Putin
I previously wrote for Veridica about the unproductive deal Orban made with the Russians.
The Prime Minister’s mouthpiece, Foreign Minister Péter Szijjártó, has lectured every country where Hungary could buy gas. Turkey plays a strategic role in ensuring Europe’s energy supplies, so this summer Hungary set up energy cooperation partnerships with Turkey, Azerbaijan and Qatar.
Yet right now, Hungary’s number one gas and oil provider remains Russia, and the economic crisis is far from over. So, in keeping with the same rhetoric of his friend in Moscow, namely Putin, Viktor Orbán found fault for not supporting Ukraine, blocking Sweden’s NATO accession, and rejecting yet another EU proposal on migrant quotas.
Budapest did not provide any support to Ukraine in the 18 months of war. When it comes to setbacks, however, Hungary is adept at creating new ones without giving it much thought. Viktor Orbán’s address to the Hungarian Parliament highlighted two major themes: Ukrainian grain and “the harassment of Hungarian schools” in Ukraine.
Hungary “will not support Ukraine in any international matter” until the linguistic rights of the significant Hungarian minority in Western Ukraine are restored, the Prime Minister said. “At the start of the school year, the new Ukrainian management of the Hungarian-teaching high-school in Mukachevo, in the Zakarpattia Oblast, banned the singing of the national anthem of Hungary and the public wearing of Hungary’s national colors in school events”.
Orbán has repeatedly criticized the law Ukraine passed in 2017, restricting the use of national minority languages in schools, arguing that 150,000 Hungarian ethnics are disallowed to study in their mother tongue.
Orbán’s choice of topic is not incidental. Upon closer examination, we will notice the European Union is getting ready to make the next step towards Ukraine’s EU accession. A decision in this respect however requires unanimity at the level of the community bloc. Therefore, Orbán kills two birds with one stone: first, he plays into Moscow’s hands by holding back Ukraine’s EU integration prospects, and second, he puts additional pressure on the European Union, which is highly reluctant to unlock structural funds for Hungary, for a whole list of reasons, including Budapest’s anti-democratic drifts or its indirect boycott of European sanctions against the Russian Federation.
This is not the first time Hungary distances itself from Kyiv in order to indulge Putin. After Russia invaded in 2022, Hungary refused to deliver weapons to Ukraine, providing it instead with minimum humanitarian aid. However, even this type of assistance seems to be called into question right now. From the Parliament rostrum, Orbán scolded the EU for asking it to open a “solidarity corridor” allowing for the transit of Ukrainian grain to Africa. The grain was instead sold in Hungary, Orbán said, thus creating a surplus that affected the country’s farmers. “Let’s be very clear about it: they have deceived us”, Orbán added. As a result, Hungary joined Poland and Slovakia in their extended ban on Ukrainian grain imports after the EU lifted restrictions in this sector.
Undermining EU and NATO solidarity risks getting Hungary sanctioned, whereas Russia does not have the resources to help
By the time the US Ambassador to Budapest announced a series of sanctions against the Russian-controlled International Investment Bank headquartered in Budapest and three of its directors in April, Hungary’s relations with its Western partners had plummeted to an all-time low. At the time, David Pressman said the probability this type of sanctions should be continued was real. And probably the West is preparing fresh sanctions for Budapest, which would explain why Orbán started stigmatizing Washington, Brussels and (of course) Soros, shortly after explaining to Hungarian MPs that the EU’s decision to curb its dependency on Russian energy imports actually goes against the community’s best interests.
“This autumn, Hungary’s opponents – the Soros empire, the bureaucrats in Brussels and the American democrats – are all expected to voice their demands. However, we cannot accept their terms, because we don’t want to return to where they want us to be”, Orbán explained.
I cannot end my analysis of the speech uttered by Hungary’s illiberal Prime Minister without talking about Sweden. On a disparaging note, Orbán said he sees no immediate threat to Sweden’s security, which is why its NATO accession can wait. The Nordic country, jointly with neighboring Finland, renounced their long-standing military neutrality after Russia invaded Ukraine in February 2022. The two countries both signaled their desire to join NATO.
Budapest said the Hungarian Parliament, which at times acts like a stamp for the Prime Minister, refused to ratify the decision due to Sweden’s criticism of the Orbán Cabinet. Besides, Hungarian politicians continue to claim that Stockholm used its influence in the EU to block funds destined for Hungary.
Through the voice of its ambassador in Budapest, the USA said as early as this spring that Hungary’s constant refusal to greenlight Sweden’s NATO accession will not go unanswered.
To conclude, one can sense Orbán’s despair in-between the lines of his speech. Orbán has finally hit rock-bottom. His Russian friends have neither the funds nor the time to solve Hungary’s problems. To Moscow, the Orbán Cabinet is the “useful idiot”, which they can always cut loose if it starts complaining too much. European funds remain the biggest stake for Budapest. However, as long as Orbán fails in combating corruption and solving serious violations of the rule of law, these funds will most likely remain frozen. It is just as unlikely that Budapest’s Western partners will overlook some its democratic slips, as it has done in the past, as long as Orbán continues to undermine EU and NATO solidarity and refuses to give up on his friendship with Putin.
The bad news for the FIDESZ leader is that the EU and NATO can both exert additional pressure on Budapest. Hungary can respond in the same manner it has done in the past, by threatening to block EU and NATO decisions that require unanimity. However, the benefits of such an approach are few, all the more so as the EU and NATO can afford to keep Budapest waiting more than the other way round. Using its veto rights as blackmail will not solve the country’s economic problems and even less so its political ones.
There may be dark days looming for Viktor Orbán.
