EU’s mismanaged approach to Ukraine conflict is gravely harming its economy: Hungary

Brussels’ “ideological approach to economic issues” risks making the bloc a “loser,” Peter Szijjarto has said

The EU’s “ill-advised” response to the Ukraine conflict has caused serious damage to the bloc’s economy, and Brussels’ insistence on restricting trade with China could worsen the situation, according to Hungarian Foreign Minister Peter Szijjarto.

Europe is “facing serious economic difficulties, and its economy is deteriorating rapidly,” Szijjarto said at a meeting of EU foreign ministers in Brussels on Thursday. “The situation,” he added in remarks carried by Hungarian media, “has been worsening since the outbreak of the war.”

“Hungary has paid a high price for the war, in the form of €10 billion more in energy bills,” he continued, explaining that “inflation in Hungary has increased not because of a flawed economic strategy or poor decisions, but because of the war and the sanctions response to it.”

The EU has responded to Russia’s military operation in Ukraine by imposing 13 rounds of economic sanctions on Moscow, including bans on Russian fossil fuel imports. Although Hungary has been part of these sanctions, Hungarian Prime Minister Viktor Orban has repeatedly threatened to veto their passage in order to secure concessions from Brussels, including a partial exemption from the EU’s bloc-wide oil embargo.

Szijjarto said last week that Hungary could not support the EU’s proposed 14th sanctions package, because its restrictions on nuclear energy cooperation would affect Hungary’s Paks II nuclear power plant, which Russia’s nuclear agency Rosatom is helping to build.

“We have examined this and it appears that around 41% of EU resolutions on Ukraine have been blocked by Hungary,” Lithuanian Foreign Minister Gabrielius Landsbergis complained after Szijjarto’s announcement.

Speaking at Thursday’s meeting, Szijjarto accused the EU of further strangling its own economy by taking an “ideological approach to economic issues, as a result of which the world is dividing into blocs again.” This was a reference to the European Commission’s proposed trade restrictions on China, a policy that the commission’s president, Ursula von der Leyen, calls “de-risking.”

“Brussels and other Western European capitals are trying to destroy perfectly reasonable East-West cooperation,” he said, adding that tariffs on Chinese goods – such as those currently being considered on Chinese electric vehicles – could potentially “knock out” the European economy.

“Economic cooperation is vital for the European Union to be not the loser, but the winner of the most important revolutionary transformation of the world economy, i.e. the transition of the automotive industry,” he stated.

Chinese automaker BYD announced last year that it would build an electric vehicle manufacturing plant in the Hungarian city of Szeged, making it the first Chinese car company to open a factory in Europe. The plant is expected to create thousands of jobs and be operational within three years.