Gergely Gulyas – Photo: MTI

Gulyas: Government to cover 2024 Erasmus grants if talks with EU fail

Hungary's government will cover students' 2024 Erasmus grants if it fails to reach an agreement with the European Union on Erasmus funding for universities run by foundations, the head of the Prime Minister's Office said on Thursday.

At a regular press briefing, Gergely Gulyas called it “unacceptable” that universities run by foundations would become ineligible for funding as part of the EU’s Erasmus programme, under which students from Hungary can study abroad. He said there were numerous examples of universities in western Europe that had active politicians sitting on their boards of trustees.

He said the matter was also “outrageous” because when Hungary reached an agreement with the European Commission, the government had followed the executive body’s rules on conflicts of interest. Hungary would have been open to adopting even stricter rules, but Brussels did not require it, he added.

Gulyas said the EC had not put forward clear requirements regarding higher education institutions.

He said Tibor Navracsics, the regional development minister, will consult with the EU on the matter. The government hopes “that this is just a misunderstanding and the matter can be resolved quickly”, he added. If no agreement is reached, Hungary will cover the costs of next year’s Erasmus grants, Gulyas said.

If the matter is not resolved, Hungary will file a lawsuit at the Court of Justice of the European Union (CJEU) over the resolution suspending the programme, he added.

This year’s Erasmus grants have already been approved and are not impacted by any council resolution or commission opinion, Gulyas said, adding that the decision applies to the 2024 grants.

Hungary wants to find a “peaceful solution” to the matter, he said, adding there may be little room for one given that the government had consulted with the EC and fulfilled its requests.

Meanwhile, Gulyas said the number of academic publications by universities that have adopted the foundational model increased by 18 percent over a single year.

Higher education admissions increased by 9 percent in 2021 and a further 7.5 percent in 2022 compared with 2020 despite there not having been more secondary school graduates in 2022 than in 2020, he said.

There are currently around 40,000 international students studying at Hungarian universities and colleges, up by 65 percent since 2013, he said. Hungarian higher education institutions received applications from 11,300 international students between 2020 and 2021 despite the coronavirus pandemic, most of which went to universities run by foundations, Gulyas said.

Hungarian universities have also moved up significantly in international rankings, he said, noting that there were 11 institutions ranked in the Times Higher Education World University Rankings this year, compared with nine two years ago and seven four years ago.

Also, government funding for higher education is now double what it had been in 2020 despite the difficult economic situation, Gulyas said.

Turning to the economy Gulyas said the 2023 state budget was dedicated to protecting the caps on household utility bills. Referring to changes to this year’s budget, expected to be passed by parliament in March, Gulyas said the government was committed to maintaining its utility price cap programme and high employment “amid a number of economic hazards”. The goals of increasing pensions and real wages have not changed, he added.

Gulyas said the goal of avoiding a recession was likely to be met, adding that most analysts were in agreement with the government’s growth target of 1.5 percent for this year. If that is met, he said, the utility price caps could be maintained for average consumption, while family subsidies could even increase.

The budget deficit is set to fall to 3.9 percent of GDP from 4.9 percent and the public debt is expected to decline further, he said.

The budget also covers the 13th month pension and pension hikes, Gulyas said, noting that the average pension has increased to 208,800 forints (EUR 523) from 97,000 forints in 2010. The government will spend a total of 6,150 billion forints on pensions in 2023, he said.

As for last year, Gulyas said “all indicators” showed an economic growth rate of 4.5 percent, which he said was one of the highest in the European Union. As in the previous two election years, Hungary in 2022 reduced the budget deficit to 4.9 percent from 6.8 percent and the public debt to 73.5 percent of GDP from 76.8 percent, Gulyas said.

Real wages rose by 4.3 percent in the first ten months of the year despite inflation, Gulyas said. Taking into account family benefits, real wages rose by 77 percent compared with 2010, the sixth highest growth rate in the EU, he added. Citing OECD data, he said Hungary was the only one of 32 countries to register real wage growth in the third quarter of 2022.

Gulyas noted that Hungary had achieved record high employment in 2022, whereas unemployment was on the rise elsewhere in Europe. He added that the government had managed to stabilise the forint exchange rate, which witnessed a “spectacular” strengthening since last month. On the subject of energy, the minister said the country’s energy bill increased from 7 billion euros to 17 billion last year, but 2,600 billion forints (EUR 6.5bn) can be tapped from the utility price protection fund help both families and municipal and state institutions with their expenses.

Answering a question on negotiations between the government and municipalities concerning energy subsidies, Gulyas said the government wanted another round of talks, “depending on the economic situation and trends in utility prices”. He warned against “too much optimism”, but noted that the price of gas and oil had reached its lowest level in the past eight months, adding that if that trend continued “it could help a lot both in terms of municipalities and the national economy”. Gulyas also welcomed an unusually mild winter’s resulting in low gas consumption and lower prices, and noted that Hungary’s gas storage facilities had “significantly large” reserves.

Asked if the government would roll out its energy subsidy programme to spas, some of which have been closed while others have raised their fees, Gulyas said the government will consider how much assistance they would need in the next season to survive.

Asked about the conditions of the Erasmus programme, Gulyas said the government would have been prepared to accept any EU request not to have politicians serving on the boards of trustees of universities, but no such request had been made.

The EC’s only requirement regarding conflicts of interest was that government officials should not be involved in decisions on EU funds, he said.

The government is unable to recall anyone from university boards of trustees; rather, it can only draft conflict-of-interest rules that prohibit members of government and state secretaries from sitting on university boards, he added.

Meanwhile, Gulyas said the European Parliament was “losing the credibility it had left to an unprecedented corruption scandal”. Hungarian MEPs will put forward an asset declaration proposal, he said, adding that the EP can only remain a serious institutional player in European politics if it fully examines the corruption allegations and draws the right conclusions. “It’s obvious that the asset declaration system can’t stay as it is,” he added.

As regards the Hungarian left’s campaign donations, Gulyas said Hungary’s campaign finance rules were adequate, noting that they banned all political parties from accepting foreign donations. It would be “an illusion” to think that foreign donors would not ask their beneficiaries for something in return, Gulyas said. “Hungary has a left-wing opposition that can be bought in dollars, and the Hungarian voters were wise not to elect them,” he added.

Concerning the war in Ukraine, Gulyas said Hungary believes it could only deliver weapons to its north-eastern neighbour via the Transcarpathia region, which has an ethnic Hungarian population of over 100,000. Hungary therefore does not send weapons to Ukraine because the number one priority is to spare Transcarpathia from the war, he added.

Meanwhile, Gulyas said Hungary’s offer to treat Ukrainian soldiers wounded in the war still stands, noting that dozens of troops had been treated in the country.

In response to a question, he said there were no plans for Prime Minister Viktor Orban to visit Ukraine.

As regards migration, Gulyas said migration pressure on the southern border was intensifying, adding that hopefully Slovenia and Croatia could protect their own borders. Every member of the passport-free Schengen zone has a duty to protect the area’s external borders, “which Hungary is fulfilling in exemplary fashion”, he said.

Asked why Hungary’s Eximbank had provided credit to Bosnia’s autonomous Serb Republic, Gulyas said it was in Hungary’s economic and strategic interest to invest in as many parts of the Balkans as possible. In response to a question, he said the Hungarian government had never supported this territory’s independence aspirations.

On another subject, he said Hungary had seized 870 million euros worth of Russian assets — most of it from Sberbank — in line with EU rules.

Asked if the reports about two owners of the battery plant being built in Debrecen being under house arrest in China had affected the government’s support for the project, Gulyas said the government wanted to clarify whether the reports were true. If they are, he said, it needed to be determined whether this had any effect on the operations of the company and the investment. The government has received no official confirmation of the reports, he added.

Asked if pensions may be raised again later in the year because of inflation, Gulyas said pensions could not be allowed to lose their real value. If annual inflation forecasts are above 15 percent by August, pensions will be raised by November at the latest, he said.

Concerning remarks by teacher unions that teachers at vocational schools may also join the strikes, Gulyas said the government was open to talks with anyone. The government’s proposed wage hikes are a guarantee for teachers getting the financial recognition they deserve, he said.

Answering a question on the cap on food prices, Gulyas said they may be maintained as long as they did not generate shortages, adding that the government was planning to maintain that regime until April 30. Concerning an earlier plan to get private doctors involved in state health services, Gulyas said that the government had dropped the idea following consultations with the sector; many doctors had protested against the proposal.

Meanwhile, Gulyas said the government was against the introduction of a tax on land.

Asked about a criminal complaint by the opposition Democratic Coalition suggesting that the government should take the blame for Hungary having been denied access to EU funding, he said Ferenc Gyurcsany, DK’s leader, had “started his political career in a mass murderous communist party state” and “he still thinks that law should serve politics”.

On the topic of the 2024 European Handball Championships, Gulyas said Hungary had decided against organising the event due to its high cost.

Asked about a government plan to spend 22 billion forints (EUR 55m) on monitoring the media in the next four years, Gulyas said the sum had been set aside but decisions about how much to spend would be made periodically.


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