Gergely Gulyas – Photo: MTI

Gulyas: Agreement on RRF funding hinges ‘only on EC’

An agreement on Hungary's Recovery and Resilience Facility (RRF) funding now depends only on the European Commission, as the government has accepted the body's stand on disputed issues, Gergely Gulyas, the head of the Prime Minister's Office, said on public radio on Sunday.

In a letter sent to the EU’s executive body, Gulyas said the government accepted the EC’s position in all four areas in which it expected progress, “regardless of whether we agreed with the suggestions or not”.

He added that the significance of the issues in question are “much smaller” than the matter of Hungary getting the funding to which it is entitled.

“As we’ve accepted the Commission’s position on all of the issues over which there were differences so far, we think the only thing that remains to be discussed is the technical close, after which an agreement can be signed,” he said.

Gulyas said the Hungarian left wing and their allies in Western Europe don’t want to see Hungary reach an agreement on the funding with the EC. He added that they are lobbying for teachers not to get pay rises as EU funding can provide the resources for higher salaries in the education sector. Pay rises in the healthcare sector would also be covered by the RRF funding, he added.

He called the left wing’s behaviour “irresponsible” and urged left wing MEPs “who make five million forints a month not to lobby to keep teachers and doctors in Hungary from earning more”.

Commenting on a European Parliament resolution on the global minimum corporate profit tax, Gulyas said the minimum global tax and the RRF have “nothing to do with each other”, adding that the resolution was a “gross violation” of the EU Treaties as the principle of sincere cooperation does not allow correlations to be made between unrelated matters.

The global minimum corporate tax, in its present form, is good for the United States, but bad for Europe and even worse for Central Europe, he said. The adoption of the minimum tax rate would result in the loss of Hungary’s tax advantage that has drawn international investors and their investments to the country, he added.

He said the United States’ cancellation of its double taxation avoidance agreement with Hungary was “strong arming” to get the country to approve the global minimum corporate tax. He added that the termination would not come into force until January 2024, leaving Hungary one-and-a-half years to approve the global minimum corporate tax.

The action is a “petty step by a superpower”, he said.

Gulyas acknowledged the risk to the economy posed by higher prices for commodities and energy and said the government had done “everything in its power” to “normalise” the situation. The budget is stable and balanced, the deficit is falling and the real economy is in a good position, he added.

He said recruitment would start for new units of border rangers in July already.

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