Natural gas supplies in Europe have been tight and fuel costs have soared after Russia’s invasion of Ukraine in February and subsequent sanctions, leaving countries scrambling to refill storage and diversify supply channels. Russia describes its actions in Ukraine as a “special operation”. Rising gas and electricity prices forced nationalist Orban to scale back a years-long cap on utility prices for higher-using households on Wednesday, overturning one of the 59-year-old prime minister’s signature economic policies. “At first, I thought we had only been shot in the foot, but now it is clear that the European economy has been shot in the lungs and is gasping,” Orban, a longtime critic of sanctions, told public radio. in an interview. Orban said Ukraine needed help, but European leaders should rethink their strategy as sanctions have caused widespread damage to the European economy without weakening Russia or bringing the months-long war closer to any resolution. “Sanctions are not helping Ukraine, however, they are bad for the European economy and if they continue like this, they will kill the European economy,” Orban said. “What we are seeing right now is unbearable.” “The moment of truth must come in Brussels, when leaders admit that they miscalculated, that the sanctions policy was based on the wrong assumptions and must be changed.” Re-elected in April, Orban said that without Wednesday’s restrictions, which will cause energy costs to jump for households using energy above the national average, the entire utility price cap regime should be scrapped. Economists at Morgan Stanley have said the restrictions could add 1.5 percentage points to inflation, already at the highest level in two decades, further exacerbated by the weak forint. The story continues Ahead of the April vote, economists estimated the cost of the utility price caps at up to 1.5 trillion forints ($3.71 billion), which along with a series of measures that helped Orban’s election bid caused increase in the fiscal deficit. Orban faces his toughest challenge since he took office in 2010, with inflation at the highest level in two decades, record lows in the plumbing forint and European Union funds at a standstill amid a row over democratic standards. Orbán’s other decision to fast-track legislation to raise the tax rate for hundreds of thousands of small businesses this week, as part of a broader effort to curb a growing budget deficit, led to several protests in Budapest. ($1 = 404.59 forints) (Reporting by Gergely Szakacs; Editing by Christopher Cushing)
title: “Europe Shot In The Lungs With Russia Sanctions Orban Says " ShowToc: true date: “2022-12-20” author: “Lisa Randall”
Sign up now for FREE unlimited access to Reuters.com Register BUDAPEST, July 15 (Reuters) – The European Union has been “shot in the lungs” with reckless economic sanctions on Russia that, if not reversed, risk destroying the European economy, Hungarian Prime Minister Viktor Orban said on Friday. Gas supplies in Europe have been tight and fuel costs have soared after Russia’s invasion of Ukraine in February and subsequent sanctions, leaving countries scrambling to refill storage and diversify supply channels. Russia describes its actions in Ukraine as a “special operation”. read more Rising gas and electricity prices forced nationalist Orban to scale back a years-long cap on utility prices for higher-using households on Wednesday, overturning one of the 59-year-old prime minister’s signature economic policies. read more Sign up now for FREE unlimited access to Reuters.com Register “At first, I thought we had only been shot in the foot, but now it is clear that the European economy has been shot in the lungs and is gasping,” Orban, a longtime critic of sanctions, told public radio. in an interview. Orban said Ukraine needed help, but European leaders should rethink their strategy as sanctions have caused widespread damage to the European economy without weakening Russia or bringing the months-long war closer to any resolution. “Sanctions are not helping Ukraine, however, they are bad for the European economy and if they continue like this, they will kill the European economy,” Orban said. “What we are seeing right now is unbearable.” “The moment of truth must come in Brussels, when leaders admit that they miscalculated, that the sanctions policy was based on the wrong assumptions and must be changed.” Re-elected in April, Orban said that without Wednesday’s restrictions, which will cause energy costs to jump for households using energy above the national average, the entire utility price cap regime should be scrapped. Economists at Morgan Stanley have said the restrictions could add 1.5 percentage points to inflation, already at the highest level in two decades, further exacerbated by the weak forint. Ahead of the April vote, economists estimated the cost of the utility price caps at up to 1.5 trillion forints ($3.71 billion), which along with a series of measures that helped Orban’s election bid caused increase in the fiscal deficit. read more Orban faces his toughest challenge since he took office in 2010, with inflation at the highest level in two decades, record lows in the plumbing forint and European Union funds at a standstill amid a row over democratic standards. read more Orbán’s other decision to fast-track legislation to raise the tax rate for hundreds of thousands of small businesses this week, as part of a broader effort to curb a growing budget deficit, led to several protests in Budapest. read more ($1 = 404.59 forints) Sign up now for FREE unlimited access to Reuters.com Register Report by Gergely Szakacs. Editor: Christopher Cushing Our Standards: The Thomson Reuters Trust Principles.
