Gergely Gulyas – Photo: MTI

Gulyas: Hungary wants to stay out of war in Ukraine

Hungary wants to stay out of the Russia-Ukraine war and does not want to participate in the NATO mission in Ukraine either, the head of the Prime Minister's Office said on Thursday.

Gergely Gulyas told a government press briefing that the government would make every effort to ensure that Hungarian soldiers and weaponry would not be sent to Ukraine.

The government maintains its position that the war cannot be resolved on the battlefield and NATO should focus all its efforts on activating an immediate ceasefire and starting peace talks as soon as possible, he added.

He said at Wednesday’s cabinet meeting the war situation was evaluated as having taken a more serious turn. New details revealed about NATO’s plans carried the risk of the alliance intervening directly in the war, he added.

The Government Information Centre (KTK) will send a “factual report” on war-related developments to members of the public, he added.

Gulyas said NATO’s Ukraine mission would involve military training and the coordination of weapon deliveries, as well as 100 billion US dollars of spending on the war in the next five years. The expectation that the war may last another five years was reason for concern in itself, he said, but the expectation that all NATO members should participate and “massive pressure” on Hungary to support the alliance’s plans were even more worrying, he said.

Gulyas said NATO may consider a member state to be under attack in the absence of an actual conflict on the ground if it were “directly threatened”. Such “moves and plans” had been mobilised, he said.

He said that at the same time Hungary, as “a loyal ally”, would work to keep NATO from at all intervening in the conflict. Failing that, Hungary would do everything in its power to stay out of any future military missions in Ukraine, he said.

Gulyas said Hungary was a loyal NATO ally and among those countries to have raised defence spending to 2 percent of GDP.

He said that at the same time “peace must be served”, and the government was developing the Hungarian armed forces with a view to guaranteeing the security of its own citizens and NATO as a whole, he said, adding that investments in defence were not about engaging “in missions that threaten to trigger a world war between nuclear powers”.

Guylas said the alliance’s leadership was likely to work towards a compromise before its meeting in Washington, DC over the summer.

On the subject of Chinese President Xi Jinping’s current visit to Hungary, Gulyas said Xi’s decision to visit Paris and Budapest was a sign of Hungary’s growing weight in the world. He slammed international media for employing “double standards” by “painting the visit to Paris as right and that one to Budapest as wrong”.

Gulyas noted that Chinese GDP, which was 20 years ago one-fifth of the EU’s, has surpassed that of the entire bloc by now, and this showed the EU’s slipping competitiveness and China’s “enormous journey in economic growth”.

In 2004 only fifteen of the world’s largest companies were Chinese; that number grew to 135 by 2023, Gulyas said. The country single-handedly produces 18 percent of the world’s GDP, he said.

Gulyas said it was in Hungary’s interest to attract as much Chinese investment as possible.

Hungary pursues the principle of connectivity in international cooperation, and the government would like to be able to conclude mutually beneficial deals on the highest-quality products possible, he said.

While four-fifths of Hungary’s investments come from Europe, it welcomes companies from all over the world, including the US and South Korea, he said, adding that all investments that created jobs and brought capital to the country were in Hungary’s interest and contributed to growing wages here.

The government reached its economic goal for 2023 and broke “war inflation”, as inflation fell to 3.6 percent in March, Gulyas said, adding that 2024 would be the year of “re-starting the economy”.

Commenting on economic indicators for the first quarter, he said goals for 2024, too, had been fulfilled so far, “despite the war environment dampening European growth”.

GDP grew by an annual 1.7 percent in the first quarter, and by 0.8 percent quarter on quarter, putting Hungary among the fastest growing EU member states, he said. Annual growth is the third highest in the EU, while quarter-on-quarter growth is the second highest, he said.

He said forecasts were less certain as long as the war in Ukraine was still ongoing, adding, however, that the 2.5 percent growth forecast for 2024 and the 4.1 percent growth projected for next year were “realistic” despite the current circumstances.

Gulyas welcomed the incipient recovery in consumption and the increase in retail sales in the first three months of 2024, following 13 consecutive months of decline.

In the tourism sector, commercial and private accommodations registered 7.1 million guest nights in the first quarter, a 14 percent increase compared with the same period last year, with the number of foreign guests rising by 18 percent to 2.9 million, he said.

Gulyas also said more than one million more people had jobs than during the Fidesz government’s left-wing predecessor, while the minimum wage has grown 3.5-fold and the average wage 3-fold since then.

Government spokesperson Eszter Vitalyos said more than 3,100 families have applied for over 83 billion forints in CSOK Plusz home purchase subsidies so far, with the applications averaging 26 million forints. More than 35 billion forints had been awarded to more than 1,400 families by the end of March, she added.

Meanwhile, she said more than 210 billion forints-worth of developments have been carried out across the country, of which 180 billion has gone towards public road upgrades.

In connection with Chinese President Xi Jinping’s visit, Gulyas said China’s economy is the world’s second largest, and it had a good chance of becoming its strongest within a decade.

“China needs markets … and it is interested in having as many capital investments as possible in EU countries. Adopting an anti-China position deteriorates the EU’s competitiveness,” he said, noting that China’s economy in the past two years grew by 700 percent, as against 80 percent in the US and 30 percent in the EU.

Asked whether Chinese companies would contribute to the Paks nuclear power plant expansion, he noted that besides the Russian contractor, US, German, and French companies were involved in the project, and China was not expected to have any significant role.

Asked about the issue of freedom of speech in connection with an incident involving “Chinese people wearing red caps” who had questioned an opposition Momentum MP regarding an EU flag as well as the concealment of a Tibetan flag during the presidential visit, Gulyas said an investigation should first ascertain “if such things in fact happened”, adding that only Hungarian police had such powers in the country.

Regarding the war in Ukraine and China’s related peace plan, he said Hungary alone could not establish peace, and the US and China would have an important say. “We can encourage them to do as much as possible towards attaining an immediate ceasefire and peace,” he said, adding that “war psychosis”, led by the Polish government, was growing.

Gulyas said Prime Minister Viktor Orban was considering whether to participate in a peace summit to be held in Switzerland in mid-June at the initiative of the Ukrainian president. He said a peace summit without both warring parties present “would have not much point”, adding that progress could not be made before the parties sat down and negotiated a ceasefire. He added that he saw no chance off Orban and Ukrainian President Volodymyr Zelensky meeting before the European parliamentary elections.

Concerning the preconditions Ukraine must meet before joining the EU, Gulyas said the Hungarian government expected Ukraine to restore the situation prior to 2015 in respect of the ethnic Hungarian minority and the legal status of minority schools, the option to take secondary school final examinations in Hungarian, and using the Hungarian language in higher education, culture, public administration and social life without restrictions. Failing to meet those criteria, Ukraine could not make real progress in its accession talks, Gulyas added.

He said Hungary supported Ukraine as the victim of the Russian attack but not by sending weapons to the country or by contributing to “prolonging the war in any way”.

Regarding aid to Ukraine, he said graft was “a serious problem”, adding it was up to the EU to establish a system to monitor the funds sent there.

Answering a question, he said that in times of war it may be valid to seize the assets of those believed to share responsibility for the war and spend the frozen funds appropriately, but “seizing the assets of a person just because they are Russian evokes the worst of pre-second-world-war times.”

On the topic of the Iranian ex-president’s visit to the National University of Public Service, he said no government member had met the “well-known Holocaust denier”, adding that “it is not easy to ban university lectures in a free country”. The government, he noted, maintained a pro-Israel policy.

On the subject of Europe, Gulyas said that even now he would vote for Hungary to join the EU despite “bad feelings” and “worries about the EU’s operations”. “Hungary has no alternative to European cooperation and the common market, and this is true of the other countries of central Europe,” he said.

Commenting on the European Commission’s readiness to scrap the Article 7 procedure against Poland, Gulyas said Poland now had a “pro-war government which the commission considers as an ally, and which is sufficient reason to close the procedure… Rule of law issues in the EU no longer have anything to do with the law; they have become a purely political matter.”

Regarding domestic politics, Gulyas said Gergely Karacsony, the mayor of Budapest, should admit to accepting unlawful funding from abroad for his election campaign in 2019.

In connection with the Tisza Party’s entry into the Budapest municipal election campaign, Gulyas said the election rules were amended six months ago in line with the opposition’s request for a purely party list system; the change had not been made because of the Tisza Party.

Commenting on the increasing popularity of Peter Magyar’s party, he said “a wrecking derby” was taking place within the left wing, and “voters will decide which leftist party to support.” “It would be unsurprising if Tisza fielded candidates who would work in Brussels to prevent Hungarians from paying lower public utility fees,” he said. “The Hungarian left wing has always been against” the government’s scheme to keep household energy bills low.

“In the end Peter Magyar and [former Socialist PM] Ferenc Gyurcsany will form an alliance … causing a serious loss of credibility to the leftist parties.”

Gulyas said the government would increase tax breaks for families with children once the necessary resources were available. He conceded that though tax benefits for families with two children had increased by 100 percent in the previous government term, the personal income tax breaks offered “significantly less help today than when they were first introduced”. He said the government intended to increase the size of the tax breaks, “but no such decision has been made yet”.

He said the reason behind last month’s fall in the budget deficit had been a 10 percent increase in budget revenues, noting that that the government targeted a deficit of 3.7 percent of GDP in 2025 and 2.9 percent in 2026.

He said retail sales were up compared with 2023, noting that they grew by 4.2 percent in March, with food sales alone rising by 5.7 percent.

Meanwhile, Gulyas attributed the fall in the industrial output to the slowdown of the German economy, but said it had only made a dent in the “higher-than-expected growth rate”. He expressed hope that industrial output figures would improve in the future.

As regards motor fuel prices, he said Friday’s price cut would bring prices at the pump below the average prices in neighbouring countries, and expressed hope that local fuel companies would keep to their agreement with the Hungarian mineral oil association (MASZ).

Meanwhile, Gulyas said the cabinet had not discussed lowering the price of single-day motorway vignettes to 1,000 forints.

Asked to comment on figures published by national health insurance fund NEAK which show that 47,000 Hungarians are on waiting lists for scheduled operations as against 40,000 last year, Gulyas said the government planned to discuss proposals to shorten the waiting lists.

Out of thirteen types of operations, patients currently have to wait longer than 60 days for cataract, hip and knee replacement surgery, and spinal stabilisation surgery. The goal is that no one should have to wait for operations, he said, pointing out that though there were more people on the lists this year, this did not mean that they had to wait longer. He added that the average wait time had decreased from 90-100 to 45 days.

Government spokesperson Eszter Vitalyos added that when waiting lists were the longest, 43,000 patients had to wait for more than 60 days for operations, and now there were 26,000 such patients.

Meanwhile, Gulyas said the government has earmarked 63.4 billion forints for the settlement of hospital debts, “and it’s very likely that another similar decision will have to be taken his year”.

Asked if the government will give supplementary funding to the struggling Budapest University of Technology and Economics (BME), Gulyas said the financing of higher education institutions would be discussed at the next few cabinet meetings. He added that Hungary had increased government funding for higher education more than any other EU country over the last 2-3 years.

Asked to comment on the BME rector’s remarks that state-financed universities did not receive a share of these resources and were being pushed towards a new management model, Gulyas said state universities had also seen pay hikes in recent years, though not as significant as the institutions that had adopted the new management model. He added that the option of switching to the new model was open to all universities.

Asked about the court ruling suspending the environmental permit of the Samsung battery plant in God, near Budapest, Gulyas said the decision had to be complied with. He said the Hungarian authorities were experienced when it came to handling cases concerning the operations of battery plants, adding that the factories had to adhere to the strictest environmental protection standards.

Asked about the proposed rail shuttle service that would run to and from the Liszt Ferenc International Airport, Gulyas said Hungary needed to explore the possibilities for building a direct rail link between the airport and Budapest and accept the best offer, adding, at the same time, that speculation on any such project was “premature”.

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