Gergely Gulyas – Photo: MTI

PMO head urges ceasefire, peace talks

Gulyas: Child protection act must be protected

Hungary's government supports the draft resolution on the Russia-Ukraine war before parliament and believes that an urgent ceasefire and peace talks are needed, the head of the Prime Minister's Office said on Thursday.

The government expects a protracted war and continued economic difficulties resulting from the sanctions imposed in connection with the conflict, Gergely Gulyas told a regular government press briefing.

Hungary’s position on the war is clear, he said, noting that the country condemned Russian aggression and provided humanitarian assistance to Ukraine. Hungary will also make financial contributions to ensure that the Ukrainian state stays operational, he added.

Gulyas said it had become clear in the debate on the draft resolution submitted by the ruling parties that the left continued to support sanctions and would deliver weapons to Ukraine, thereby “dragging Hungary into the war”.

He said the sanctions had resulted in record-high inflation, but expressed hope that measures introduced by the government could help bring it down into the single digits “by the last month of the year”. He said high inflation in Hungary was rooted “mostly in external causes”, adding that the country was “close to the war” and it was largely dependent on energy imports. He also added, however, that inflation may have peaked and noted that it had “modestly decreased” in February.

Making decisions to rein in inflation as early as possible and helping families and small ventures was a priority for the government, he said.

Among measures, Gulyas mentioned that the government would raise allocations to the Baross Gabor corporate loan programme to 1,000 billion forints (EUR 2.6bn) to help companies with investment projects and working capital loans. He added that loans could be both euro-and forint-based, taken out with a preferential interest rate – 3-3.5 percent for euro- and 6-6.5 percent for forint-based loans.

On another subject, Gulyas said Hungary’s child protection law “must be enforced and protected amidst international debates”. He regretted that “an increasing number of child abuse cases have come to light in recent weeks”, which he said called for a review of child protection regulations.

He noted that the justice minister had submitted a counter-appeal to the Court of Justice of the European Union within the infringement procedure against Hungary over the child protection law.

The government maintains its position that education is a national competency and parents have the right to make decisions concerning the upbringing of their children, he said.

Asked about wage hikes for teachers, Gulyas said the government wanted to “take a big step forward” in the matter, for which it wanted to rely on EU funding.

He noted that teachers received a 10 percent pay rise as of Jan. 1, and the goal was for teachers’ wages to reach 80 percent of the average wage of degree holders by the end of next year.

Meanwhile, Gulyas said lawmakers of the ruling parties will hear the parliamentary delegation that recently visited Finland and Sweden next week, after which they will make a final decision regarding the matter of the two countries’ NATO accession bids.

He said though Sweden and Finland were Hungary’s allies, “at times in recent years they have behaved as if they were our enemies”.

Gulyas added, at the same time, that the prime minister has asked the ruling parties to support Sweden’s and Finland’s bids.

Concerning the financing of university cooperation programmes, Gulyas called the matter a “pseudo-problem invented by the European Commission thanks to the activities of the Hungarian opposition”. He said the shift by universities to the foundational model gave them the broadest possible freedoms.

The transfer of state-run universities to foundations does not require a conditionality procedure, Gulyas said, arguing that it violated neither the rule of law nor the EU’s financial interests.

The rectors of universities managed by asset management foundations have expressed unanimous support for the change and “want no part in this attempted interference”, he said.

Gulyas called the suspension of funding from EU programmes in the case of universities run by foundations “an act of revenge against Hungary”. If the matter is not resolved, the missing funds will be covered by the state budget, he added.

In response to another question, Gulyas said the EU’s decision to suspend the funding was aimed against “the Hungarian people, or the Hungarian race, if you will”, calling it “an anti-Hungarian act of revenge”.

Asked about National Bank of Hungary Governor Gyorgy Matolcsy’s recent remarks on Hungarian economic policy, Gulyas said the government did not want to comment on “why the central bank governor says what he says”.

The government strives for fair and good cooperation with the central bank, he said, adding he did not want to assume that there were any “personal reasons” behind any of the governor’s remarks.

Monetary and fiscal policy should be consistent with one another, Gulyas said, adding that the central bank should concentrate on lowering inflation, in line with its responsibilities.

The central bank must act and its measures must be supported by the government, Gulyas said. “If we can’t count on each other as partners in this, it is the Hungarian economy as a whole which will lose out,” he said.

Meanwhile, Gulyas said taxes on excessive profits will be phased out “wherever possible” next year. The tax will be lowered in other areas, “but some form of contribution remains necessary”. He noted that the taxes on excessive profits are used to finance the utility protection fund meant to cover the costs of keeping household utility prices low.

On another subject, Gulyas said there was a problem with the drawdown of EU recovery monies and only 17 percent of the funds had been transferred. He said the reason why Hungary had yet to receive the funding was not because the EU was concerned over their possible misuse but rather because the country’s position on the issues of the war, migration and child protection is different from that of Brussels.

Concerning Hungary’s battery plant projects, Gulyas called them “very good investment”, adding that those plants were also instrumental in the economy’s green transition. He also added that ensuring conditions for a transition to electric vehicles was in Hungary’s interest.

On the subject of child protection regulations Gulyas said the goal was to create a system “on a reasonable basis” which “could even be supported by the opposition”, adding that its completion could be expected by September.

On another topic, Gulyas slammed the medical chamber for “jeopardising on-call services the introduction of which it had supported”. He also added that “even the most belligerent chamber leadership should admit that no previous government had ensured similarly high pay hikes since 1989”.

Concerning dykes to be built on the western banks of the River Danube in northern Budapest, Gulyas noted that in earlier times a lack of regulations had led to a situation “which should not have been evolved” and called for “solidarity with those that are concerned about their property even if they houses had been built without a permit”.

Gulyas called for an impartial international probe into the sabotage against the Nord Stream gas pipeline. He added that “Germany seems not to have decided if they are allowed to show resentment over a most brutal attack on its energy security … they appear as if they have bad conscience over the fact that the German economy’s success was party built on cheap Russian gas.” The Hungarian government trusts that it could use EU community funding for purchasing gas from Azerbaijan in an effort to diversify Hungary’s energy supplies. Answering a question, he also added that gas-fuelled power plants could be built in just two or three years.

On reports concerning Hungary moving its embassy in Israel to Jerusalem, Gulyas said the government wished to maintain its trade representation in Jerusalem while “no further decision has been made”.

Concerning the International Investment Bank, Gulyas said “if it can be saved, it should be saved; if it cannot be saved we cannot do anything”. He added, however, that further states should join the bank to make it viable.

On a possible visit by Prime Minister Viktor Orban to Kyiv Gulyas said such a visit could be made “if it makes sense apart from being demonstrative and if issues could be resolved that generate tension between the two countries”. Among those issues he mentioned Ukraine’s language law, which “goes against all European law, trampling on Hungarian’s right to their mother tongue”.

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