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Gulyas: Government to keep utility cuts

The Hungarian government will not abandon the utility cuts "as suggested by Brussels", Gergely Gulyas, the head of the Prime Minister's Office, said in weekly the podcast Mandiner Reakcio on Friday.

“There will be no austerity measures. They have never been a tool of Hungary’s civic governments,” he said, adding that “removing measures benefitting residents is … inconceivable.”

Concerning next year’s budget, Gulyas said it was designed to offset high energy prices or inflation. “We will cut inflation . by December or possibly as early as October, it could be in the single digits,” he said.

Hungary’s high inflation is caused by the country’s dependence on foreign exports, Gulyas said, adding that two thirds of its oil exports and 90 percent of its gas came from Russia.

He added, however, that “this year’s inflation is high only when compared with last year’s prices; it is on a downward path and will be reduced radically, and an inflation rate of 5 or 6 percent seems a realistic goal”.

Concerning recent changes to the family assistance system, Gulyas said a subsidy of 10-15 million forints (EUR 26,700-40,000) was sufficient to buy a home in the provinces but in Budapest, where property prices were much higher, “a more efficient instrument is needed”.

Gulyas said the government was “committed to giving teachers a robust raise” but added that it had “expected to receive EU funds at the first stages”.

The government plans to raise teachers’ salaries should increase in September, in January next year and then in January 2025 “to reach 800,000 forints, then one million at the end of this government cycle or at the beginning of the next”, Gulyas said. “But, unlike the other 25 member states, Poland and Hungary are denied community funding . when they can receive funds will be decided on political interests,” he added.

Gulyas insisted that Hungary was denied the funds because “Hungary’s leftist MEPs threaten and blackmail the European Commission”. Raising teachers’ pay will cost 7,000 billion forints until 2030, including 800 billion forints in EU funding, Gulyas said, adding he was “shocked that the Hungarian opposition will do everything to prevent teachers from receiving higher pay”.

On the subject of the war in Ukraine, Gulyas said it was “difficult to assume” that Ukraine could recapture territories “which Russia occupied violating international law” therefore “they must sit down and negotiate”. He added that the Hungarian government condemned Russia’s attack on Ukraine and was helping the latter country through humanitarian aid.

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