Due to Brussels’ flawed climate and energy policies, energy prices began to rise sharply even before the war. As a result of the Commission’s policy of radical transformation, which required Member States to systematically dismantle conventional energy production and deregulate household energy prices, the European Union’s import exposure increased significantly, leaving it completely vulnerable to other major regions and world markets. The resulting increased supply risks and the removal of regulatory protection mechanisms to protect households from adverse market changes, have led to a dramatic increase in overhead costs and growing social tensions. By the end of 2021, the situation had exacerbated to the point where both the German Disaster Management Agency (BBK) and the Austrian army prepared the population for what to do in the event of energy supply problems through video clips.
The Russian-Ukrainian war that erupted on 24 February 2022 has dealt another blow to the European market, which is suffering from the energy crisis and is heavily relying on Russian energy sources – the price of natural gas even exceeded EUR 200 for some time. Like in the case of the virus crisis, Brussels has not been able to effectively and efficiently respond to the global challenge. Moreover, its sanction policy, which is ill-considered and ignores the geographical features and national interests of the Member States, has exacerbated the situation.
The previously significant social tension was only worsened by the fact that the bureaucrats in Brussels are tormenting the population with outdated solutions instead of meaningful crisis management. According to Frans Timmermans, Vice-President of the European Commission, European citizens “can also choose to heat less, ride a bike rather than drive a car, have a shower for a shorter time and air their clothes instead of washing them immediately”. While Josep Borell, the European Union’s High Representative for Foreign Affairs and Security Policy, said: “As a first step, the population needs to turn the heating down to reduce gas consumption so that the EU does not finance the war against Ukraine further.”
By resisting Brussels’ deregulation efforts all along – the European Commission even initiated an infringement procedure against Hungary regarding the system providing the utility price cap, but the European Court of Justice ruled that the measure does not violate EU law – and thus defending the utility price cap, the Hungarian government could protect the Hungarian population from unfavourable energy market developments. In order to achieve all this, it was necessary to restore the state’s room for manoeuvre and ownership in the energy sector, which had been reduced as a result of the privatisation of left-wing governments and to adequately address the failed energy policy of the Gyurcsány government, which exposed the population to unfavourable changes in the market – between 2002 and 2010, consumer gas prices increased by 99.8 percent. This was achieved in several steps: a price moratorium on universal service was introduced in 2010, official pricing was reintroduced from 2011, and gradual reduction on tariffs started in 2013.
The utility price cap also serves fundamental rights purposes, as the reduction in end-users’ utility prices guarantees the enforcement of a second-generation human right, the fundamental right to social security. The specific characteristic of second-generation fundamental rights is that they are positive in nature, i.e., they require public activities. A fundamental requirement for constitutional states is to recognise and enforce human rights. Article XIX of the Fundamental Law declares the right of social security and sets out that Hungary shall strive to provide social security for all its citizens through the system of social institutions and measures such as the utility price cap.
By the enactment of Act LIV of 2013 on the Implementation of Utility Price Cap, the legislator wanted to guarantee the reduction of unreasonably high burden placed on the population, aiming to improve the living standards of the population and to ensure that people are free to manage as much of their disposable income as possible. Thus, the utility price cap guarantees the freedom of the use of income in addition to the reduction in the price of household items to be paid in any case. This is extremely important because there is no real competition regarding energy services, thus citizens have an extremely limited choice to have cheaper service and energy fees instead of what is considered high.
Due to the utility price cap, Hungarian households saved a total of HUF 2,600 billion due to the introduction of the measure until 2021. A household could spend a total of HUF 627,000, HUF 6,000 in monthly breakdown, for other purposes such as education, health, transport, or entertainment, in addition to overhead bills.
Nevertheless, the left has repeatedly expressed its view that if it came to power, it would end the utility price cap or take steps (such as the termination of the Paks II agreement) that would make it impossible to maintain. Former left-wing candidate for prime minister Péter Márki-Zay has criticised the measure to reduce the burden on the population several times, calling it an “irresponsible step”, and Ferenc Gyurcsány also stated earlier that, when they come to power, they will thoroughly examine the situation, because “profit is necessary in a well-functioning economy”. The thoughts along this conception that ignore the interest of the Hungarian people, supplemented by the demand to turn off the tap of the Russian gas pipelines, has intensified again with the outbreak of the war, carrying a significant security risk.
The “proposed alternative solutions” by the domestic left, according to which “There is a possibility for reducing overhead costs, of course there is: less water should be used, less electricity should be used, less gas should be used,” and neighbours, colleagues and acquaintances should travel in the same car, thus sharing the costs, are a clear evidence of the fact that the opposition would follow Brussels’ unsustainable energy and climate policy, which is sacrificing the livelihoods of the European population on the altar of ideology.
In contrast, the basic principle of the civil-national government is that the global energy crisis can only be effectively managed on a pragmatic basis and on the basis of common sense and can be adequately addressed by protecting the national interest. These are the only guiding principles by which the utility price cap can be defended and by which it can be avoided that the Hungarian people pay the price of war and unfavourable market developments.