Gergely Gulyas – Photo: MTI

Gulyas: Agreement with EC to be followed by ‘unprecedented’ wage hike for teachers

An "unprecedented" wage hike awaits teachers if the government reaches agreement with the European Commission on EU funding currently withheld due to the rule-of-law conditionality mechanism, the prime minister's chief of staff said on Thursday.

The government is hoping to raise teachers’ wages to 80 percent of the average salary of university graduates by 2025, Gergely Gulyas told a regular press briefing.

Wages may be raised by 21 percent in January 2023, by 25 percent in 2024, and by 29-30 percent in the two subsequent years, he said.

Of the three major wage hikes teachers have received in the past 30 years, two were awarded under Prime Minister Viktor Orbán’s government, he added.

The government has agreed with the European Union to take 17 measures, mostly in connection with the public procurement system. The proportion of single-bid procurements will be reduced and cooperation with the European Union’s anti-corruption taskforce OLAF intensified, Gulyas said.

Orbán on Thursday thanked in a letter the EU heads of state and government for their decision to extend the deadlines, he said. Hungary is striving for a fair agreement, and the government is totally committed to fulfilling its pledges, he added.

Meanwhile, Gulyas said Hungary’s energy supply is secure. Even if the country received not a single molecule of gas during this period, it still has enough gas stored to last six months, he added.

The chief of staff said Hungary has significant storage capacities and high storage levels, and it has also made significant gas purchases.

Skyrocketing energy places in Europe has triggered inflation and exchange rate problems in Hungary, he said.

There are two major challenges to be faced in Europe: the availability and the price of energy, especially natural gas, Gulyas said. Prices are exorbitantly high and energy is not always and necessarily available from its usual sources, he added.

The current crisis has underlined the need to effect several changes in Hungary’s energy system, he said.

If the government reaches an agreement with the European Commission, Hungary would use the credit part of the Recovery and Resilience Fund (RRF) for the green transition and upgrading its electricity network, he said.

Meanwhile, Gulyas said that whereas solar panel installations were feeding the energy into the electricity network, current regulations would have to be changed because the network cannot take in any more energy until a major upgrade is carried out. The requirement to feed the electricity back into the network will be suspended in the case of new applications for solar panels, he added.

Asked about Orbán’s meeting on Monday with German Chancellor Olaf Scholz, Gulyas said the two leaders discussed EU sanctions against Russia among other matters. The sanctions should be discussed calmly and reviewed in a way that Europe’s interests are also taken into consideration, he said. Gulyas argued that rising energy prices triggered by the sanctions and the continuing threat of them had put all European economies in an extremely difficult situation.

Though Hungary has introduced “Europe’s biggest utility support scheme”, the situation is still “an extremely heavy burden” on the state, and further support schemes will have to be launched, Gulyas said. He added, however, that no other European country could compete with Germany’s 200 billion euro plan to shield companies and households from soaring energy prices.

Meanwhile, Gulyas said Europe would have to decide which sanctions should be extended when they expire in December.

In 2025, the average graduate salary is expected to be around 972,000 forints (EUR 2,253) gross, with teachers likely to earn 778,000 on average, Gulyas said. He accused Hungarian left-wing politicians of undermining the country and the government rather than focusing on raising teachers’ wages.

Gulyas also accused Democratic Coalition MEP Klara Dobrev and other leftwing MEPs of trying to thwart an agreement with the European Commission on unlocking EU funding for the country.

He said that even without EU funding, the government would hike teachers’ wages by 10 percent next year. No additional wage rises are expected next year for state employees except in the case of doctors who will receive pay rises already negotiated as money is needed to maintain government subsidies for household energy bills, he added.

Referring to teachers who have taken part in civil disobedience and received disciplinary action, he said that teachers’ demands for higher wages were legitimate and no one could suffer as a result of participating in a legal strike or demonstration. But anyone breaking the law faces the standard disciplinary procedures of the workplace, he added.

Gulyas dismissed the concept of civil disobedience, saying that legally there was “no such thing”. Civil disobedience, he added, was never mounted for material benefit but only “for a higher moral purpose”.

Put to him that teachers had legitimate reasons for taking action besides their demands for higher pay, he said the wage increase announcement opened up the possibility for “meaningful dialogue”, though until the salary issue is resolved other issues in public education should not be addressed, as this would only lead to misunderstandings and disputes.

Asked whether the dismissal of hundreds of teachers was viable, Gulyas said the government valued teachers’ work but those who wanted to protest against the government should do so within the legal framework.

Meanwhile, commenting on the National Consultation whose questionnaires will be sent to households on Friday, he said the public survey of opinions on sanctions against Russia served as a good example to the rest of Europe. The survey would reveal, he said, how far arguments for sanctions are publicly supported or otherwise.

Regarding EU funding, he said that if an agreement is struck with the European Commission, Hungary may receive its money either at the end of this year or at the start of 2023 at the earliest.

Commenting on the recent meeting between Prime Minister Viktor Orbán and German Chancellor Olaf Scholz, he said that on some issues there was agreement, while in the case of familiar disagreements, neither side succeeded in convincing the other.

Regarding Orbán’s meeting with the Serbian and Austrian leaders in Budapest last week, he noted that agreement was reached to take joint action against migration and to get to the point where migrants are stopped at Serbia’s southern border.

Asked about inflation, Gulyas said the government would pursue a balanced fiscal policy and reduce the trade deficit causing Hungary “the greatest uncertainty”. Although the forint has weakened more than the Polish or Czech currencies, Hungary’s exposure to the global market is bigger, too, he said, adding that as long as sanctions blew up energy prices, the forint would lose value. Gulyas insisted, however, that Hungary’s economic fundamentals were stable. If there were no longer sanctions, the forint would rebound, Gulyas added.

Once there is peace and sanctions on energy have been lifted, “we will have no problems with inflation” as there “is no structural factor whatsoever” in the Hungarian economy generating inflation, he said.

Asked about the National Bank of Hungary bank led by Gyorgy Matolcsy flagging the prospect of ending the series of rate hikes, Gulyas said the government did not comment on central bank policy decisions.

Asked about the EU proposal to impose a cap on the price of gas, he said if the European Commission failed to guarantee a sufficient amount of gas for households and the economy, this would not be a price-cutting measure but a form of sanctions.

Asked about the formation of a multi-party parliamentary group dealing with LGBTQ rights, Gulyas said: “I envy anyone who believes this to be among the country’s top hundred most important issues.”

In reply to a question, Gulyas said that Hungary had implemented all EU sanctions involving the freezing of assets.

Asked whether Western arms deliveries had helped Ukrainians in their struggle, Gulyas said they had while also prolonging the war. The great powers would have done better to strive for an resolution before the outbreak of war, he added.

Gulyas said Hungary had decided against delivering weapons to Ukraine because such shipments would cross Transcarpathia, and the government, he added, did not want to expose large numbers of ethnic Hungarians living in that relatively peaceful region to danger.

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