Gergely Gulyas – Photo: MTI

Gulyas: Hungary’s security top priority

Hungary's security is of paramount importance in the current situation, the prime minister's chief of staff said on Thursday. "It is in the country's explicit interest that it should not get dragged into the war" in Ukraine, he said.

The Hungarian government has “firmly decided” not to send troops to Ukraine, neither will it allow weapons to be transported across the Hungary-Ukraine border, Gergely Gulyas told a regular government press conference

Referring to “expert opinion and available information”, Gulyas said there was a fair chance that “such shipments could be destroyed”, adding that the Hungarian decision served the security of Transcarpathia and its people. The security of the local ethnic Hungarian minority is of prime importance, Gulyas said. Many have been forced to leave Ukraine, he said, but added that men between 18-60 were now forbidden to leave the country, therefore “many families have decided to stay”.

Gulyas also noted the government’s position that refugees should be accommodated in the first safe country, which, for Ukrainian refugees, was Hungary.

The minister noted the importance of providing humanitarian aid, adding that the government was working to coordinate and contribute to the aid campaign launched by civil groups. Border crossing stations are open continuously, while the government has appointed facilities to provide accommodation and help centres in six towns near border in an effort to “help every refugee”, Gulyas said.

According to Wednesday’s figures, some 120,000 people have crossed from Ukraine into Hungary, Gulyas said. The government has allocated 1.3 billion forints to Hungary’s charity organisations, he said, adding that the sum may be increased.

Hungary is a transit country for some of the refugees, especially for nationals of third countries that have so far been staying in Ukraine legally, but there are also ethnic Hungarians with family and friends in Hungary “with a place to go to, at least provisionally”, the minister said.

The government has sent aid to Transcarpathia worth 600 million forints, including 30 tonnes of food and 100 litres of fuel, Gulyas said. Another shipment of medical aid worth 140 million forints has just left Hungary, he added. Hungary will “do everything to help not only those who have fled to Hungary but those also who have stayed”, he said.

Hungary backs all sanctions against Russia that have the support of the rest of the EU, Gulyas said, adding that “Hungary has not used its veto and will not do so”. Hungary condmens Russia’s intervention in Ukraine, Gulyas said. “War is an unacceptable way to resolve disputes”, he said.

He warned, however, that “one must be careful with sanctions because it is important that the price of war should not be paid by the peoples of Hungary and Europe.” “There are grave differences of opinion concerning sanctions, and measures should not be taken that impact Europe’s residents more than those that the sanctions are aimed against,” Gulyas said.

He insisted that “some are demanding sanctions in areas where it could hurt us, such as in the energy sector”. He said that buying the electricity produced by the Paks nuclear plant on the market would cost the average Hungarian household an annual 260,000 forints extra.

Concerning businesses that have already been impacted by the sanctions, Gulyas said Sberbank Hungary had some 70,000 clients who would receive compensation of up to 100,000 euros each. Twelve Hungarian municipalities among depositors of larger amounts will receive assistance from central coffers, he added.

The minister called on “all political forces to set aside their own political interests” and contribute to creating “national unity concerning issues of security and war”. He said it was “regrettable” that the left wing “seems to disregard the perils of the war situation for Europe and Hungary”.

He slammed Peter Marki-Zay, prime ministerial candidate of the united opposition, for “calling refugees from Transcarpathia pro-Russian”. The country’s security is “even more important than the upcoming elections”, he said, adding that “making irresponsible remarks in this situation is escpecially harmful.”

Hungary will scrap mask mandates from Monday, and phase out most coronavirus-related measures, the prime minister’s chief of staff said.

The government will also lift regulations enabling companies to make vaccines mandatory for employees, and abolish those regulating the use of immunity certificates, Gergely Gulyas said.

Meanwhile, the special legal order will remain in place to enable swift government action should a sixth wave of the pandemic hit the country, he said.

The regulations might have to be reintroduced in case of a sixth wave, although “virologists are optimistic”, Gulyas said. In that case, the symptoms of the illness are expected to be milder than previously, he said.

Taking questions from journalists, Gulyas said that “as long as this government is in power”, Hungary will not deliver weapons or send soldiers to Ukraine. In connection with a statement of opposition prime ministerial candidate Peter Marki-Zay, who said refusing transit of deliveries to Ukraine from other countries constituted “treason”, Gulyas said such a step would “create risks that we better avoid if we want to protect Transcarpathia and the Hungarians living there.”

Gulyas noted that Hungary launched a large-scale development of its armed forces a few years ago “as if it had a premonition of the possibility of armed conflict,” Gulyas said. “The members of the current German parliament at the time talked about the importance of pacifism,” he said. “Europe may develop self-defence capabilities as a consequence of the war,” he said.

While Russia is Hungary’s key economic partner in ensuring energy supplies, NATO and the EU are its allies, Gulyas said. Ties with Russia were “more a marriage of convenience rather than a love affair,” he said.

Regarding possible outcomes of the war, Gulyas said the ideal solution would be if both parties retreated to antebellum territories. “Together with our allies, we will decide whether to accept the new status quo. We haven’t enough forces to have a significant impact on the outcome,” he said.

Gulyas called the Russian demand that NATO restore its 1997 borders, before the former Communist states became members, “impossible”. NATO membership “guarantees the greatest possible security for Hungary,” he said.

Responding to questions about the Russian-backed International Investment Bank (IIB), which was hit by EU sanctions and lost five EU member states as its clients this week, Gulyas said Hungary would remain in the institution as the bank backed Hungarian investments. At the same time, the IIB’s liquidity may be at risk if its other EU members follow suit, he said.

Regarding gas supplies, Gulyas said Russia has already raised its prices. In the unlikely case it decided to “close the taps”, Hungary would be one of the last countries to suffer, he said. Hungarian reservoirs are 54 percent full, while other EU countries have reserves of between 17 and 38 percent of their capacity, he said.

Should Russia cease to deliver gas, Hungary would have to turn to more costly alternatives, Gulyas said. The government, at the same time, “is committed to maintaining the utility price caps”, he said.

The EU is not going to hit Russian gas deliveries with sanctions “because that would kill its economy,” Gulyas said, noting that the bloc had failed to diversify its energy resources in the past thirty years.

Strategic reservoirs currently hold three months’ supplies, he said.

Regarding the European Parliament’s recommendation to cease cooperation with Russian state-owned Rosatom, the developer of the upgrade of the Paks nuclear plant, Gulyas said a show of unity with the EU was now more important than “eliminating points of the document Hungary does not agree with”. The sanctions will not delay or raise the costs of the upgrade, “but the effects of the war are impossible to foretell,” he said.

Commenting on the effectiveness of sanctions, Gulyas said that ever since tha annexation of Crimea, sanctions have been in force against Russia, but they had failed to prevent war while causing damage to Europe’s economy.

Hungary will not go against a united European position, but the country will succeed best if it tries to dampen the effects of the sanctions, he said. Sanctions that cause the least possible damage are needed, he said, while bankruptcy went against the country’s interests, he added. For the time being, the price of the sanctions has been paid by those who do not get compensation from the deposit insurance fund.

He said it was uncertain what further sanctions would be introduced, but those already in place were damaging not only Russia but also Europe. “Despite this, Hungary’s economy is performing well,” he added.

Figures from the first month-and-a-half of this year show that “Hungary’s economy has a firm footing and growth of around 7 percent carried through from last year, a thirty year record high”, he said.

The weakening of the forint and share market fluctuations “lack any economic basis; the supporting pillars of the Hungarian economy are extremely stable,” he said. “We trust that the Hungarian economy, with obvious losses caused by the sanctions, will survive this difficult period without extreme harm being done,” he added.

In response to a question, he said the productivity of Hungary’s agriculture had been growing in recent years, and while “the price of wheat will surge” as a result of the war, the volume harvested in Hungary is sufficient to feed some 22 million people.

Gulyas said some inflation projections of around 9 percent this year were “baseless”. At the same time, he added that the war would put pressure on inflation, with the increase in commodity prices also affecting Hungary.

In response to a question about whether this year’s budget would need to be amended in light of the war, he said this would be decided around the middle of the year.

Meanwhile, Gulyas said that the government’s policy for Hungarian communities abroad involved encouraging people to stay in their place of birth, but those who do not want to return home after the war will get support in finding work so they can settle. In response to a question about support available for refugees, he said there was “certainly no upper limit to our help”.

Gulyas said it was impossible to forecast how many people would seek refuge in Hungary. “Vaccination capacities are significant, and seem to be unlimited compared to demand.” Refugees can get any type of vaccine they want, including jabs against the coronavirus and other vaccines which are not automatically given to children in Ukraine, he added.

He said a working team has been set up by the government to find ways to channel refugees to the labour market, including those who stay temporarily.

There are some 80,000 unfilled jobs in Hungary, mainly in the construction sector, he said.

Gulyas said the Visegrad Group of countries were united in rejecting a European Commission proposal to offer temporary protection to refugees. Those who arrive in Hungary receive refugee status, and clear regulations apply to them, he added.

Commenting on the liquidation of Sberbank, he said the government would enable local governments affected by the bank’s collapse to take out a loan under preferential conditions. He added that there were around 3,000 clients with savings of more than 100,000 euros. Sums above that threshold are not covered by the deposit insurance fund.

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