Gulyas: Hungary politics aims to find allies

On the topic of energy, Gergely Gulyas said it was impossible to replace Russian oil imports at this point despite the fact that the Hungarian government had done everything in its power over the last several years to secure alternative energy sources.

Diversifying energy sources has been a constant goal for Hungary since the change of regime over three decades ago, he said.

“While Hungarian post-Communist governments all paid lip service to diversification, we were the ones to do the most… while the country could import gas only from Austria and Ukraine when we came to power in 2010, we now have interconnectors with six of our seven neighbours,” he said.

“The problem is that over the last thirty years Europe has failed to satisfy the demand . for alternative sources of raw materials and energy,” Gulyas said. “Until alternative sources are in place, we’ll be heavily dependent on Russian oil and gas. Once the Greek-Bulgarian interconnector is finally completed . we’ll also have the option of importing gas from Azerbaijan.”

He said the government understood that the EU could not turn a blind eye to Russia’s aggression. Because the government did not want to break the bloc’s unity on its response, Hungary backed the first five sanctions packages against Russia, he noted. But when the sixth package was put forward after member states had reached a consensus on rejecting the possibility of an energy embargo at the summit in Versailles, Hungary had no choice but to make it clear that it relies on Russian oil for the security of its energy supply, Gulyas added.

In response to a question, he said the government wanted the standard of living in Hungary to catch up with that of western Europe. “This has been the goal of Hungarian policies since the change of regime, and we’ve taken big steps towards reaching it in the past decades,” Gulyas said. “We’re still doing everything we can to ensure this continues.”

Gulyas said the average wage under the previous Socialist governments had been lower than the minimum wage is now, and the standard of living had risen over the past decade.

Central Europe must keep the competitive advantage it has over western Europe in areas like public security, social peace, its opposition to immigration and the view that parents are right to think that their children could have a better life than they had, Gulyas said.

He noted that Hungary’s GDP is 74 percent of the EU average, with the country having overtaken Portugal. “But we have to keep moving forward, and the goal is to reach the EU average in the foreseeable future,” he said. “And if we keep going at the rate we were over the previous government cycle, then — in spite of all the difficulties, the war and the recovery from the pandemic — we’ll have reason to be satisfied with this cycle as well.”

Regarding the Budapest municipality and Mayor Gergely Karacsony, Gulyas said the government respected the rights and autonomy of local governments, as enshrined in the Fundamental Law. The government does not intend to force the municipality’s hand on contentious issues, “even though we might get further if the relationship between the government and the municipality wasn’t determined by party lines,” he said.

Gulyas called on the opposition to stop “trying to block agreements between Hungary and the EU at every turn, such as the agreement on the [pandemic] recovery fund and that on the 2021-2027 financial framework.” Those actions “do not harm the government but rather teachers and doctors, whose wage raises would be financed form the funds.”

He said the government would welcome a cross-party stance on the issue, as a “first sign that leftist MEPs and members of their party groups, whom they have fired up, will stop undermining our opportunities to receive the EU monies we are entitled to.”

Asked about the recently introduced windfall tax on large companies, Gulyas said the current economic climate was determined by recovery from the coronavirus pandemic, which brought about inflation, and the war in Ukraine, which exacerbated it. War-time inflation has a visible impact on the economy, and “it is as yet impossible to know how far it will go as no one can foretell when the war is going to end”, he said.

“The conservative, balanced economic policy exercised by the Hungarian government is the most effective answer to this,” he said.

“We are asking sectors with large profits, where profits often grew during the crisis, to increase their share of the tax burden,” he said.

Thanks to these steps, Hungary will probably not exceed a 4.9 percent budget deficit in 2022, and hopefully slash it to 3.5 percent next year, despite the risks in the world economy, he said.

Meanwhile, the government will increase funding for family allowances and protect its utility fee cut scheme, he said.