The European Commission's building in Brussels – Photo: wikipedia

Minister: Brussels 'could not thwart' Hungarian economy

EC to propose prolonged assessment of Hungary recovery plan

The European Commission will propose prolonging the assessment period of Hungary's recovery plan, in which the country has requested 7.2 billion euros in funding from the EU's Recovery and Resilience Facility (RRF) designed to offset the fallout of the coronavirus epidemic, an EC spokesperson said on Monday.

“We are working constructively to conclude our assessment as fast as possible. Should our assessment require more weeks rather than days, we will propose to Hungary to agree on an extension of the 2-month deadline,” Arianna Podesta told a press conference in Brussels.

The EC accepted the recovery plans from 16 states by the Monday deadline, and asked for a prolonged assessment period in the case of Poland, Estonia, Romania, Sweden and Finland. During this period, the member states have the opportunity to provide further information to the Commission, and to amend their plans, Podesta said.

Hungary submitted its plan on the use of RRF funds in May, with the lion’s share — 34.1 percent of the funds — allocated to the development of the health-care system. The development of environmentally friendly transport and the education system would receive 25 percent and 20.4 percent of the resources, respectively.

Additional development plans include promoting the switchover to the circular economy, closing the gap between underdeveloped and better developed regions, as well as environmental protection, he added.

The Prime Minister’s Office said in response that talks between the EC and Hungary had been under way and close to completion when the commission “came up with impossible demands” after the government-sponsored child protection law, which the EU decried as discriminative, was passed.

The recovery plan, which was “shaped in consultation with experts, is being hobbled by ideologically and politically motivated attacks,” the PM’s office said in a statement.

Hopefully, the plan will be assessed on professional grounds, independently from “Brussels’s insistence on letting LMBTQ activists into Hungarian kindergartens and schools,” the statement said, referring to criticisms that Hungary’s child protection law discriminated against the LMBTQ community.

“There is no reason for EU bodies to reject the Hungarian plan. We have responded to demands which were sprung on us unexpectedly, and fulfilled all requirements in line with RRF regulations,” the statement said.

“Talks are ongoing between Hungary and the European Commission on the Hungarian recovery plan, and we await the Commission’s decision,” it said.

The statement slammed the Hungarian opposition for “lobbying for the Hungarian plan and talks to be frozen”.

Minister: Brussels ‘could not thwart’ Hungarian economy

Brussels “could not thwart the Hungarian economy even if it wanted to”, Finance Minister Mihaly Varga said in an interview published by news portal Origo on Monday.

Varga said that the European Union was “trying to turn a purely economic issue into a political one” adding that he hoped a “reasonable” solution could be found.

“We are constructive and cooperative, but I must point out that Brussels’s shameful attitude will have no bearing on the Hungarian economy’s situation,” Varga said.

Citing recent calculations, Varga said Hungary’s GDP growth could exceed 6 percent this year “even if not a single cent is received” from the EU until the end of the year, he said.

According to the latest figures, economic growth could be 5.3 percent next year, and “the economy could make up for the losses suffered during the coronavirus pandemic in 18 months,” Varga said.

Concerning inflation, Varga said that the economy was being restarted across the world, with often limited supplies, which leads to a shortage of certain materials and goods, and that drives prices up. Goods are not becoming more expensive “because of VAT or the government”, the minister said. According to the finance ministry, inflation could be 4.2 percent this year and 3.6 percent in 2022.

Varga said that the government was mulling another pension hike for November, for the second time this year, with regard to a higher than expected inflation. He added that a pension bonus of a combined 50 billion forints would be paid to seniors before the end of the year, while one million families would be refunded the personal income tax they paid in 2021.

Concerning proposals to introduce a global minimum tax, Varga said that “Hungary refuses to support any tax hikes, especially ones that would negatively impact the competitiveness of not only the country but the foreign companies here”. He noted that a uniform corporate tax rate of 15 percent had been suggested while it was currently 9 percent in Hungary. “We can only promote the Hungarian interest even if we must defy a proposal by the president of the United States,” he said.


Leave a Reply