Gergely Gulyas – Photo: MTI

Gulyas: Hungary proposes extension of import ban on Ukrainian grain

The Hungarian government proposes that the European Union should extend its ban on grain imports from Ukraine beyond September 15, Gergely Gulyas, the head of the Prime Minister's Office, told a regular press briefing on Thursday.

Should the EU reject the proposal, Hungary will introduce the same measures it applied earlier similarly to Bulgaria, Poland, Romania, and Slovakia, Gulyas said.

He said he hoped the EU would find a solution, adding that “destroying the agriculture of countries bordering Ukraine is not European solidarity.”

Gulyas noted that Europe’s introduction of a “solidarity corridor” for Ukrainian grain imports had resulted in those imports increasing to a monthly 250,000 tonnes in 2023, from an annual 40,000-50,000 tonnes before the war.

“The problem is that the EU’s rules forced Ukraine’s neighbours only to exercise solidarity rather than the whole of the community,” he argued.

Hungary, Bulgaria, Poland, Romania, and Slovakia therefore decided to “close their borders to Ukrainian grain” Gulyas said.

Meanwhile, Gulyas welcomed the successful completion of celebrations marking Hungary’s August 20 national holiday. He said the government had arranged for “the most spectacular light and fireworks show of all time”, which attracted a record number of spectators on site and public television viewers. Tens of thousands attended over 100 programmes during the three days of the celebrations, while “many hundreds of thousands” saw the fireworks that closed out the events, he said. He thanked the organisers and the nearly 3,000 police officers securing the events.

Gulyas also highlighted the World Athletics Championships now under way in Budapest, saying “Budapest is able to arrange for major events and is an excellent host to those programmes”. He added that the championships’ events had been attended by over 60,000 people at the National Athletics Centre on Sunday, while ticket sales have already exceeded 350,000.

Touching on the economy, Gulyas said that despite the current difficulties, the government was able to deliver on its commitment to push inflation into the single digits by the end of the year, and there was a good chance that this could happen by November or even October.

The government has achieved its most important economic policy goal of protecting jobs in the wartime situation, and Hungary is battling a labour shortage rather than unemployment, Gulyas said. Interest rates are also falling, he said, underlining the importance of returning to an interest rate environment that promotes lending and investment.

The government wants to ensure that wage growth continues to outpace inflation, he said, adding that there was a good chance to achieve real wage growth this year.

Government spokeswoman Alexandra Szentkiralyi said a probe of compliance with rules on offering consumers regular discounts on food products in a range of categories showed that around 10 percent of shops had violated rules. In 67 percent of the cases, she said, the shops had complied with the regulations but failed to indicate the reduction in price, while in 28 percent at least one of the mandatory products was not available.

Fines levied for those offenses add up to 25 million forints (EUR 65,000), she added.

Thanks to the Competition Office’s online price-monitoring platform, prices in 54 categories out of 62 have been reduced by an average 6.7 percent, bringing the inflation of food product prices down by 1.8 percent, Szentkiralyi added.

Szentkiralyi said the recent price drops indicated that multinational supermarkets had been unjustifiably overpricing products in the recent period. She said the price-monitoring platform had drawn some 1.2 million visitors since its launch on July 1, adding that it will receive updates in the near future, including an expansion of the product categories based on user feedback.

Meanwhile, Gulyas said in response to a question that more wage hikes were coming on January 1 next year, but the government was also working to ensure pay rises in the real economy throughout the year.

Gulyas said Hungary was consulting with every country on the potential introduction of national import bans on Ukrainian grain if the EU ban is not extended, particularly the four other countries bordering Ukraine. He emphasised, at the same time, that Hungary’s decision would not depend on what the other countries decide. Poland will certainly introduce a measure identical to Hungary’s, he added.

Asked about the current recession and whether he saw the need to amend the government’s target economic growth rate of 1.5 percent, Gulyas said the government would wait for the third-quarter GDP figures before finalising their decision in October.

He confirmed that there was little chance of achieving a growth rate of 1.5 percent in light of the figures registered in the first two quarters. The government had not expected a major change in the second quarter, he said, adding that the only positive development had been that the recession had eased. The government expects the economy to return to growth in the second half, Gulyas said, adding that the 4 percent growth target next year hopefully would be achieved.

Asked if this year’s budget would be workable, Gulyas said this could only be determined once the Q3 data was in. The government sees no fundamental issues with the budget, and the most difficult task will be keeping to the deficit target, he said.

Asked about battery plants and guest workers in Hungary, Gulyas said guest workers were allowed to enter and work in Hungary under strict regulations and only in areas where there was a labour shortage. Concerning local residents’ concerns, he said it was up to the employer to ensure that “foreign workers do not pose a problem” for locals.

Migrants who turn up at the border without skills in the hope of a better life “should be stopped”, he said. Guest workers, however, subject to national security vetting arriving via registered agencies “to take a vacant position for a definite period of time, are a different category,” he said.

Referring to concerns about battery plants being built in Hungary, Gulyas said they were necessary “if Hungary wants to save its car industry”, since “the European Union had the idea of eliminating internal combustion engines”. Without those battery plants, Hungary would lose its car makers within 10 years, he insisted.

All plants working with hazardous materials will be closed if they break relevant rules, he said, adding that opportunities to raise the fines for such violations would be examined.

Answering a question about the closure of the Matrai power station, Gulyas said the government was negotiating a possible extension with the European Commission. Should the commission grant its approval “the government will take up the opportunity, but this will largely be dependent on the energy situation,” he added.

Meanwhile, Gulyas said Hungary’s gas storage facilities were 88 percent full, ensuring heating for homes for 219 winter days.

On another subject, Gulyas said the government was expected to make a decision on raising the price of motorway stickers in the second half of September, adding that the rule of thumb was to index prices to inflation.

Answering a question about railway services, Gulyas said the government was not planning any further closures of lines.

Addressing the issue of a possible shortage of teachers, Gulyas said the government expected the start of the school year would be problem-free throughout the country. The number of teachers, he added, was sufficient, though it was harder to find a teacher in certain areas.

Commenting on the EU Erasmus programme, he said the government was waiting for the European Commission to communicate its position. He added that it was “baffling” that the EC “prefers Czech or German students to Hungarians”.

Asked why certain leaders of EU member states such as Poland and Slovakia had not been invited to Hungary’s August 20 national holiday celebrations, he said Slovakia and Poland were allies, and he cited Slovakia as having a caretaker government, while Poland was in the midst of an election campaign.

Referring to President Katalin Novak’s recent visit to Transcarpathia and Kyiv, he said it was welcome that the sides discussed the “disenfranchisement of Transcarpathian Hungarians caused by the Ukrainian state” and how this must be rectified. Hopefully Ukraine would take substantive measures to restore the rights that Transcarpathian Hungarians had been stripped, he added.

Asked whether the government agreed with Novak’s view that the war in Ukraine should end with the liberation of the Crimean peninsula, Gulyas said the government had consistently condemned both the annexation of Crimea and Russian aggression as violations of international law. However, respect for international law was relative, he added, arguing that powerful actors relativised it.

“We’d like to see an immediate ceasefire and peace negotiations,” he said.

On the subject of large amounts of weapons getting into the hands of mercenaries, he said “this always carries a risk”, but it was unlikely that he region or Russia would be destabilised as a result.

Commenting on the situation in Niger and the direct impact of migration on Hungary and Europe, he said both had an interest in the region’s stability. A Hungarian citizen was evacuated from Niger on Aug. 2 thanks to the coordination of the Tripoli and Rome embassies, he noted.

Meanwhile, Gulyas said that each day 420 migrants tried to come to Hungary on average between Jan. 1 and Aug. 22.

Regarding proceedings related to the beating in Budapest of a man by Turkish Prime Minister Erdogan’s security team, Gulyas said everyone must abide by the law, and he condemned violence as “unacceptable”. He added that no serious injuries had been sustained, however, and the Hungarian police’s actions to remove the aggressors from the Hungarian man had been “exemplary”.

Guylas noted that the Prime Minister will go on holiday at the end of August and take part in a citizens’ picnic “on the first or second weekend of September”.

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