Hungarian Prime Minister Victor Orban has been a pioneering many of the key themes for conservatives in the US, holding hands for years on “immigration madness,” “wakening virus,” and “gender madness.”
Now, Orban is engaged in an effort to move away from the conservative Orthodox view that the state should leave the economy. He is trying to price eggs and other items.
Unable to curb Hungary's inflation rate, Orban, the highest in the European Union and facing a surge in support for political rivals, ordered price controls for 30 basic food items last week. And he denounced the supermarkets with price gouging, especially for eggs and butter.
Orban said the Hungarian government will launch this week to force supermarkets to lower prices by ensuring that essential food bills do not exceed 10% of wholesale costs. The current markup for eggs was 40% “unacceptable” he said.
“Prices won't rise, they'll rise,” Orban thundered and blamed grocery store inflation.
Hungary has been hailed by many American conservatives (and President Trump) as a beacon of how the country should run. But Orban's move highlights what many Hungarians care most: how he has struggled to manage their country's illness economy.
Economic issues have weakened Orban at home and abroad. The Hungarian Economic Research Institute, an independent institution, recently reported that its business confidence index “slid to a 50-month low.”
These troubles seriously dent Orban's popularity ahead of next year's election, and according to some opinions, his governing Fides party could lose to an emerging opposition movement led by former party loyalist Peter Magyall.
Magyaru lost his national reputation as a leader of a mass movement built on Orban's denunciation over Hungary's “a staggering cost-of-living crisis” and Hungary's “a staggering cost-of-living crisis” over a field of economic competition in favor of businesses controlled by the prime minister's relatives and political allies.
In Budapest on Saturday, Magyall attracted tens of thousands of anti-government protesters to a rally commemorating Hungary's failed 1848 revolution far more than Orban attended a similar event held earlier in the day.
Magyall attempted to direct Economy Minister Merton Nagie to the price of Hungarian classic sour cream, and by “seeing whether you can turn numbers with a ballpoint pen to cut prices,” his family and friends will “become rich people who steal your money.” The crowd cried.
Erika Lapos traveled over 100 miles from her home in northeastern Hungary with her husband, attending Magyaru's rally, denounced corruption in the weak economy. “It's not just a scandal, it's a crime,” she said.
Until recently, Orban had largely been successful in diverting his economic records and criticism of corruption by denounceing high prices in the war in Ukraine. He also sought to focus the public's attention on issues such as illegal immigration and his false accusations of the European Union trying to direct Hungarian children towards transgender and gay people.
But the Ukrainian war and immigration no longer control voter concerns, said Agoston Miraz, director of the Nezopont Institute, which runs Orban's government polls.
“The issue of inflation is the most important now,” he said.
Still, I would like to change the topic and spin Orban's conservative base.
But we don't escape economic reality.
Overall, according to official figures released last week, food prices in Hungary were 7.1% higher than a year ago, so ING Bank's calculations show that food is more than 80% more grown than five years ago.
Mr. Mr. Fides still had a solid lead over Magyaru's Tisa party, but he was vulnerable to the economy, according to his institute vote.
Economic calamities also weakened Hungarian's hands in a long struggle with the European Union over sanctions against Russia – Orban wants to remove them – and hosts many other issues related to the rule of law, democracy and corruption.
With a lack of cash to fill a big budget hole, Hungary has no real chance of receiving financial aid from Trump despite its close political ties and increasingly needs money from the European Union, where more than $20 billion has been frozen years ago.
On December 31, the European Union's enforcement unit was amid a dull warning to Orban, who had raided European leaders by saying that the European Union's enforcement unit had taken the table around 1 billion euros, or about $1.1 billion, of Hungarian frozen money from the table, and that the time limit had expired.
On Friday, as the “emilation” of “warmers” whose country never bows after weeks of attacks on the bloc by Orban, Hungary quietly agreed to overturn its veto and allow the renewal of European sanctions imposed on more than 2,400 primarily Russian individuals and entities.
Mr. Orban's Jeremiad for Brussels said Zoltan Pogassa, a professor of economics at the University of West Hungary, plays well with his nationalist political foundation, but “please don't help pay the bill.”
Before the European Union freezes much of its funds, he added, “money from Brussels drove a large part of the growth of what Orban calls the golden age.”
After falling into a recession last year, Hungary's economy is growing again at a very slow pace. However, investment, a key factor in future growth, has plummeted, Pogatza said. And the budget hole – the gap that was criticized by the European Union last month as an “excessive deficit situation” is likely to inflate if Orban provides distributors to voters next year, as he did before the last election in 2022.
Last month, Orban announced that he described it as “the largest tax reduction program in Europe,” pledged to exempt mothers of two or more children from income tax and give pensioners a VAT rebate paid on food items.
At 27%, Hungary has the highest such tax in the European Union, and many economists say the easiest way to lower food prices is to lower it, and there is also a special 4.5% tax on retailers.
But doing so will result in a fiscal deficit rising when neither the European Union nor the US are providing cash.
Rating agency Standard & Poor said it had downgraded Hungary's outlook negatively in November. This is mainly because “they can lose a significant amount of expected European Union funds.”
“No matter how much he uses anti-EU rhetoric, Orban realizes he still has to squeeze juice from Brussels,” said former finance minister Lajos Bokros.
He said Orban is looking at inflation and other issues entirely through a political lens. “His government created inflation with slacking in spending,” he said. “But lies to voters that it was imported from outside” – by supermarket chains, most of which are foreign-owned and by higher energy prices due to war in Ukraine.
Feeling political danger, Orban responded quickly to the release of official data showing Hungary's year-on-year inflation rate rose to 5.6% in February.
“We're going to end the excess and unfair price increases,” he said. He did not specify how this would be done, but on Wednesday the Hungarian Bureau of Statistics said Orban's intervention had already cut the price of eggs by nearly 20%.
Geza Sevetin, director of the Economic Policy Centre at Matthias Corbinus Collegium, a conservative government-affiliated university, said Orban is unlikely to send inspectors to punish store owners for not lowering prices. “Socialism clearly doesn't work,” he said. “And Eastern Europe knows that better than anyone else.”
But Peter Brod, former governor of Hungary's central bank, fears that Orban is reaching out for communist-era tools in what appears to be a free market.
“In place of Goolash Communism,” he said. He mentioned the singular reworking of socialism imposed by the Soviets in the 1960s and 1970s.
