The European Union is essentially weakened by its own sanctions, the question is whether it can survive the punitive measures introduced against Russia, said Mihály Varga, the Minister of Finance in Budapest, today in Tusnádfürdő.
Mihály Varga before the Bálványos Summer Free University and Student Camp, i.e. before the Tusványos Storm, after the storm? - In his panel discussion on inflation, energy prices, recession, he emphasized: Europe needs Russian energy for the time being, and the transition will take a long time and would require resources. The imposed sanctions do not work, moreover, there is no international cooperation in this matter, and the change in the exchange rate of the euro and the dollar is a big problem for the Union.
In this regard, Europe is "deeply among the losers", he said, adding that the sanctions policy is currently causing more trouble for Europe than the person against whom it was introduced. The finance minister confirmed: the Hungarian government insists on peace and security, and strives to use the available resources to preserve the socio-economic results achieved so far. He explained that the increase in inflation, the rise in energy and food prices, the increase in interest rates and the resulting more expensive loans clearly show that the world, including Hungary, is headed for an economic slowdown. Whether it will really be a recession or a very strong slowdown cannot be known now, but today there is no analysis that would count on a radical improvement in the situation, he said.
In this situation, it is necessary to stick to the basic values and security - Mihály Varga repeated, noting that the budget for next year, which was adopted a few days ago, serves this purpose, in which the national defense and overhead defense funds serve the security and stability of the country. By introducing the former, they are trying to maintain energy prices that are more favorable for households than at present, as well as to balance the security risks experienced due to the Russian war and migration, he added. These dangers must be mitigated and reserves must be created, in the spirit of this, the Hungarian government wants to reduce the amount of debt next year, and the filling up of energy reservoirs will remain a priority, the Minister of Finance pointed out.
He recalled that the US central bank was the fastest to react to the crisis first, which is willing to undertake a recession in order for inflation to disappear from the economy, but this strategy takes less account of unemployment, livelihood and social problems. This is pushing the world's economy towards recession, from this point of view the current situation is just a breath of fresh air compared to what will follow in the economies, said Mihály Varga. The Hungarian government tried to curb inflation with a price cap, but this cannot be sustained in the long term, with this measure it gives domestic businesses the opportunity to prepare for and transition to a more difficult economic environment, he added.
"We are currently in the middle of the storm," commented Gábor Teleki , CEO of Richter Gedeon Farmacia Rt. and Pharmafarm Rt., on the economic situation. He explained that the logistics chain, which is important for companies, is stuck, fuel prices have doubled, and the rise in wages has increased the companies' expenses. We are already in the middle of the storm, and a year or two of difficulty may follow for the average person. Global inflation was nine percent and 5-7 percent in 2021, said Christopher P. Ball , director of the Central European Institute in the United States.
Source: Kronikaonline.ro/MTI
Photo: Nándor Veres
