Gergely Gulyas – Photo: MTI

Gulyas: Government approves 3.5 percent pension supplement

With inflation calculated with a basket of goods and services used by pensioners projected to be 18.5 percent this year, the government has decided to supplement a previous 15 percent pension hike with a 3.5 percent top-up, the head of the Prime Minister's Office said on Thursday.

The pension supplement to be paid in November will be a 3.1 percent hike on the previously increased pensions, Gergely Gulyas told a press briefing.

In the case of the average pension, which is currently 210,700 forints (EUR 538), the supplement will be worth 6,532 forints, Gulyas said. Because the increase will be paid retroactively, the elderly will receive a supplement of “close to half a month’s pension”, or 78,384 forints on average, he said. This means that the total annual pension increase will come to almost 85,000 forints, he added.

The pension supplement will cost the budget 190 billion forints.

The pension supplement is an expression of the government’s appreciation of pensioners, he said. The government hopes it will help pensioners in a year that has seen a significant rise in food prices, he added.

Meanwhile, Gulyas said the European Union should “change its fundamental attitude concerning illegal migration”. “Brussels seeks to manage migration rather than stem it,” he said, adding that regulations concerning illegal migration was a national competency.

“Everybody is free to decide whom they want to live together with”, while controlling the bloc’s external borders is the EU’s obligation. Neglecting the latter would lead to tensions “as seen in a number of places in Europe where parallel societies have emerged”.

German government policy changes have “removed a blocking minority in the EU which has so far hindered progress on the Migration Pact”, Gulyas said. He added, however, that the pact would “only turn countries along the Schengen borders into Lampedusa, which the Hungarian government considers unacceptable.”

He insisted that the situation at Hungary’s southern border had “escalated to the point that Hungarian border guards were shot at with live ammunition”. “Now the EU wants to allow them entry,” he added.

“The Migration Pact has failed already,” he said, adding that Hungary would not “participate in any mandatory distribution; it will not implement any such decisions … we will not set up migrant ghettos.” He said the only solution was to protect the external borders and complete all refugee procedures before entry.

He noted that EU interior ministers will discuss the matter later in the day, with State Secretary Bence Retvari representing Hungary. Retvari will brief the press after the meeting, at around 5pm local time, he added.

“Brussels is abusing its powers, while the European Commission is playing for time,” Gulyas said, assessing the situation of the payment of EU funds to Hungary.

He said the Commission was dragging its feet and this meant that teachers would not receive a pay increase, and health-care developments would not get under way. Meanwhile, Hungarian students would be kept from receiving the scholarships they were entitled to, primarily Erasmus funds, he added.

Gulyas said the Commission’s procedure had “no legal basis whatsoever” and they added to their demands once Hungarian legislative amendments had been confirmed in writing.

The government, he said, would answer all questions, adding that hopefully the new demands were not being made because the money had been spent on something else, “God forbid, given to a country that is not a member of the European Union”.

“The Commission should stop playing for time, violating the rules concerning its operations and forward the funds due to Hungary,” Gulyas said.

“Hungary has not even been paid back its contributions to the common budget, while it has allowed more developed countries into the Hungarian market,” Gulyas said.

Meanwhile, Gulyas said the Hungarian government’s ban on grain imports from Ukraine was “working”. He praised the government’s measure aimed at “preventing cheap and inferior quality Ukrainian grain from flooding the Hungarian market”. The government, however, continues to be a partner in efforts to forward those products to countries in Africa, and allows their transit, he said.

The original agreement was not aimed at “destroying the agricultural markets of Europe and Ukraine’s neighbours,” the minister said.

Gulyas said the government considered it essential for Ukraine to restore the ethnic Hungarian community’s right to use its mother tongue, particularly in education.

Unless those rights are restored, Hungary will not support “any form of progress” concerning Ukraine at any international forum, he said. If there remain any European values that everyone should represent, then the minority right to use the mother tongue is one of them, he said.

Meanwhile, Gulyas said the government continues to urge an immediate ceasefire in Ukraine, adding that this could only be achieved if the United States and Europe also pushed for it.

Turning to next year’s economic outlook, Gulyas said that after curbing inflation this year and bringing it into the single digits by November, the government trusted that growth could resume next year.

All of the benchmark projections, including those compiled by the European Bank for Reconstruction and Development (EBRD), indicated that Hungary could be the fastest-growing economy in the region next year, he said.

Meanwhile, government spokeswoman Alexandra Szentkiralyi said the online price-monitoring platform has been updated to include a new map function, allowing users to select the stores where they shop regularly on a map of their neighbourhood.

Average prices have fallen in 53 of the 62 product categories by 10-25 percent, she said.

Szentkiralyi noted that government-mandated discounts have been extended until the end of the year. Fines levied for violations of the rules add up to 5.3 billion forints, she added.

Answering a question, Gulyas said that since any amendment of the EU budget required unanimity, a non-EU member state could not receive a single cent from the EU budget until an EU member state had received what it was rightfully entitled to.

Answering a question on restrictions on other products from Ukraine, such as walnuts, he said there were no plans to introduce such restrictions. In addition to grain, import restrictions have been introduced on dozens of other products, and these are expected to be maintained, he said.

On the matter of the legal dispute initiated by Ukraine, Gulyas said Hungary would be “at their disposal”. As to the question of how long the legal procedure could take, he said it could take a long time.

Regarding the Polish government’s stance on Ukraine in respect of stopping arms deliveries, the minister said his private opinion was that the Polish government considered Ukraine “ungrateful”.

Poland, he said, had given its full support, had sent weapons and were the biggest advocates of the Ukrainian cause in the world. What they had to then suffer in the form of accusations was “disgraceful”, Gulyas said.

On the issue of the increasingly bitter conflict between the Serbians and Albanians in Kosovo, and whether this may lead to another war, he said there had been many occasions when ethnic tensions had led to bloody and destructive wars in the past three decades. This is why peacekeepers, Europe and the United States, must do everything to prevent ethnic tensions from spilling into bloodshed in the coming months and years, he added.

On the question of whether a possible agreement between Turkiye and the United States on supporting Sweden’s NATO accession would influence the governing parties’ position, he said “let’s not rule anything out”.

To be in the same alliance with someone, a minimum level of respect and trust are required, he said, adding that Sweden had done much to destroy this respect and trust between the two countries. This should be fostered, rather than destroyed, he said.

On whether NATO would be stronger with the accession of Sweden, he said the organisation would be strong if its member states were able to respect each other. If that is missing, that weakens NATO.

The government, he said, had not withdrawn the motion supporting the ratification of Sweden’s NATO accession, but there was little willingness in the parliamentary group to vote on it. “Maybe it is actually better for Sweden this way,” he said. “If they were forced to vote now, the result would be questionable.”

On the amendment of the EU budget and the related negotiations, Gulyas said they indicated that Hungary did not support this. As for statements concerning the adoption of the euro, he reiterated that the Hungarian government believed that this issue should be brought up if the performance of the Hungarian economy reached 85-90 percent of the European Union average. Until then, it would have more drawbacks than benefits, he said.

In response to a question regarding a potential visit by Israeli Prime Minister Benjamin Netanyahu, Gulyas said no plans have been made for an actual visit but Netanyahu was always welcome in Hungary.

When asked about a micro-donation case involving Budapest Mayor Gergely Karacsony and the 99 Movement, he said “getting caught in such an obvious fashion is rarely seen in politics”. The explanation given had been hard to believe right from the start, but for quite some time it had not been proven untrue, he added. The mayor should come forward and reveal the truth, he said.

Commenting on remarks by opposition DK leader Ferenc Gyurcsany promising that a change of government was approaching, he said the left wing in Hungary had been using anti-democratic methods for decades but they “hopefully want to achieve a change of government by democratic means this time”. The era when Gyurcsany was prime minister was “the most corrupt and least successful period of government” in Hungary’s three-and-a-half-decade democracy, when “freedoms and democractic achievements were trampled on”, he added.

Meanwhile, Gulyas said in response to a question that current projections indicated inflation of 17.5-18.0 percent.

Commenting on teachers’ wages, he said teachers had already received an increase this year from the central budget and their salaries would further grow next year. The increase, he said, would be implemented even if the European Union refused to transfer resources owed to Hungary, but in this case it would take longer.

Gulyas said very few teachers — around 700 — had indicated a work stoppage because of the new law on teachers’ legal status.

Meanwhile, he said talks are under way with Brussels regarding rules for building wind farms. Hungary would like to introduce “significantly softer” rules but “we will insist that no wind farms are built without the approval of the local community within one kilometre of the town or village border, he added.

Commenting on debt settlement for hospitals that accumulated record hight debt in the range of 100 billion forints, he said the exact figure must be assessed as well as the reason why it accumulated. Then a decision will be made on whether state intervention was necessary or the available resources in the health fund could be used to pay the debts.

Asked about why the government was transferring property worth 100 billion forints to the Hungarian Catholic Church when the number of Catholics was significantly falling, he said figures from the Central Statistical Office showed that 60 percent of people identified as Catholic in a recent census. He said there were nearly 3 million Catholics, and the other churches also had many followers in Hungary. The public services offered by churches are also accessible to those that do not belong to any of them, he added.

In response to a question on a potential increase in the windfall tax on banks, he said it was clear that banks would again enjoy big profits this year and a decision must be made on whether to tax the large profits or give lending a boost. The latter would benefit the economy and people more, he added.

Commenting on the high deficit and a potential new target, he flatly excluded the possibility of introducing austerity measures.

Asked about why Dunaferr had received special treatment when it came to environmental regulations, he said a decision had to be made on whether the plant that employed several thousand workers should be rescued. “The decision has been made and it will be rescued,” he added.

Asked about whether the amendment to the law on child protection would include restrictions affecting the Pride march and banning gay people from the army, he said he had seen neither of those among the proposals. “The government will support what is included in the bill,” he added.

Gulyas said this year the public debt-GDP ratio was likely to fall owing to the fact that a large part of it was in forints, linked to inflation, rather than in foreign currency.

Third-quarter data will be available in October, he said. Whether the budget deficit should be raised and whether other measures were needed would become clear at that point, he added.

The deficit could be tamped down if the EU handed over Hungary’s funding, Gulyas said, adding that it appeared that Hungary had a “good chance” of receiving the monies soon.

Commenting on the railways, he said extra funding would be available and the majority of the EU funds for transport may be used for fixed track developments. This, he added, would “lead to the renewal of rolling stock”. The government hopes to adopt a multi-year rail development plan in the coming weeks, he added.

Meanwhile, he said talks on the planned state purchase of Budapest’s international airport were going “very well”, and the chance of an agreement was “very, very high”, though, he added, aspects of the agreement in respect of the state’s partner in the purchase had to be ironed out.

On the subject of the Visegrad Group, he said V4 prime ministers would hopefully meet after the Slovak and Polish elections. He noted that Czechia will soon take over the V4 presidency, and V4 leaders normally met during the changeover. Much of the V4 cooperation would hinge on the outcome of the upcoming elections in Slovakia and Poland, he said.

Asked about cooperation with the Transcarpathian governor, he said cooperation between the governor and Hungarian organisations and institutions had been “correct” but it was unclear whether laws that guaranteed the use of the mother tongue, primarily in the field of education, would be restored within an appropriate framework at presidential and legislative levels. Gulyas said Ukraine could count on Hungary’s support in international forums only if this happens, adding that he was “moderately optimistic” that “positive changes” were afoot.

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