Hungary PM Orban calls sanctions 'double-edged weapon'

Hungarian Prime Minister Viktor Orban visits the Ukraine-Hungary border where people cross into the country to flee the Russian massive military operation against Ukraine, in Beregsurany, Hungary on February 26. REUTERS

Hungary has supported European Union sanctions against Russia but its own economy will be also inevitably impacted by them, Prime Minister Viktor Orban told state radio on Friday. Orban said the first hit to the Hungarian economy was the Sberbank's shutting down its European operations earlier this week, where many clients including companies lost their money. "Sanctions have a price as it is a double-edged weapon, and we will pay this price in the short term," Orban said in an interview, adding the government had to work to mitigate the direct damage from the measures against Russia. "This is only the beginning of this crisis," he added. Orban faces parliamentary elections on April 3 where he will seek a fourth consecutive term. The National Bank of Hungary withdrew the license of Sberbank's unit after the European Central Bank ordered the closure of its European parent. Client deposits worth up to 100,000 euros will be refunded by the National Deposit Insurance Fund. Orban also said surging energy prices across Europe would fuel additional inflation pressures that the central bank and the government would have to handle. He said about 70%-80% of around 140,000 people who fled Ukraine and arrived in Hungary went on to other countries, but there were many who stay - and for whom Hungary would want to offer jobs. "We have started talks with employers ... so that those who stay would get work," Orban said. He said Hungary could offer accommodation and pay costs of refugees for three months - a benefit job seekers in Hungary get - but then they would have to take a job and somehow settle into Hungarians' lives. The Hungarian economy, like its peers in Central Europe, has been struggling with a labour shortage and tens of thousands of Ukrainians had been working in Hungary already prior to the Russian invasion.