On Thursday in Budapest the Minister heading the Prime Minister’s Office described the draft of the European Union’s budget for the period between 2021 and 2027 as unacceptable.
At his press conference – rendering an account of the proceedings of the Wednesday cabinet meeting – Gergely Gulyás said that the proposal would regroup funds from poorer states to richer ones.
Laying down that Hungary’s future lies in institutionalised European cooperation, the Minister said the Hungarian government is only able to accept an EU budget which does not penalise performance and the countries which are able to generate a more substantial economic growth. In his view,
He said in explanation that the proposed development policy would take account of the economic growth of the past few years, and therefore the Member States which are more advanced in terms of their living standards than the Central European Member States could find themselves in a more privileged position on account of the fact that in recent years they have failed to observe fiscal discipline. This proposal would, in actual fact, reward economic policies which violate EU law, he explained.
Common border protection must be supported
Mr Gulyás also said that
He further pointed out that migration falls within the competence of the Member States, and therefore a budget which takes funds away from European citizens and gives them to migrants is not acceptable. He added that the budget must support the continent’s common border protection efforts, and Hungary maintains that
Money should be saved on Brussels bureaucracy above all, he stated, with reference to the fact that the European Commission itself shared this view earlier.
The Minister said it is also unacceptable that in actual fact the draft consists of two budgets as there are separate development funds allocated to members of the Eurozone. He said it is likewise unacceptable that Member States would only be allowed to retain 10 per cent of their customs revenues instead of 20 per cent.
Mr Gulyás took the view that the proposal clearly demonstrates the legitimacy of the Hungarian government’s criticism to the effect that the European Commission has a flawed view on its role. He added that the Commission must serve as a guardian of the Treaties, and its duties are laid down in the Treaties. The fact that the Commission looks upon itself as a political body has already caused a great deal of harm as it is, he stressed.
In his view, the proposed budget is a political proposal which does not serve the interests of the whole of the European community, and contains a concealed amendment to the Treaties. He believes that the fact that the drawdown of budgetary funds would be rendered dependent on criteria regarding the rule of law constitutes an amendment to the Treaties.
The politician said it is also unacceptable that the European Anti-Fraud Office (OLAF) should be used as a means of political blackmail. Fifty-two per cent of OLAF procedures affect the very Member States which do not wish to join the European Public Prosecutor’s Office, he said.
Mr Gulyás stressed that the Hungarian government is open to a swift agreement on the budget, and believes that a fair compromise hurts everyone equally. He said that from now on the government will hold a meeting focusing on EU issues every month.
Budget of safe growth
He spoke about the budget submitted to Parliament on Wednesday which he described as a budget of safe growth. Among the goals of next year’s budget – in addition to security – he mentioned growth, family support and full employment. He added that the country’s growth prospects are very good as economic expansion has not been this promising in Hungary for some 15 years.
In his view, full employment appears to be an achievable goal, against the background of the current 3.8 per cent unemployment rate. He observed that, according to the science of economics, a 3 per cent unemployment rate practically means full employment, but the government believes that the attainment of a 2.5 per cent unemployment rate is also realistic.
Among the priority plans of the Prime Minister’s Office, Mr Gulyás mentioned the Modern Villages and Modern Cities Programmes – an allocation of HUF 150 billion will be available for the latter –, the development of Budapest and its environs, and the coordination of suburban transport.
In answer to a question regarding the Modern Villages Programme, he said that the concept is expected to be completed by the autumn, and they will then assign the required funds to the programme through the amendment of the Budget Act.
Regarding the amendment of the Fundamental Law, he said that the protection of Hungarian culture – as a Christian culture – is a constitutional duty of the state also today. In answer to another question he added that no one should feel excluded from Christian culture just because they are not a member of a Christian denomination.
In answer to another question asserting that HUF 150 billion would be withdrawn from Hungary due to irregular EU calls for proposals, Mr Gulyás said that today the conditions of an unbiased audit on OLAF’s part do not exist in the case of Hungary. He indicated at the same time that he would investigate each case in dispute.
He said they will have talks with the owner regarding the purchase of the painting Calvary by Mihály Munkácsy. In his view, the Hungarian state’s offer of HUF 3 billion appears to be a reasonable starting point.
He also said that since 1998 Prime Minister Viktor Orbán had attended every World Cup final, and if that is the case on the present occasion as well it is hardly conceivable that he should not meet with the Russian head of state.
He said it is to be hoped that the pay of civil servants will increase by more than 10 to 15 per cent next year.
Regarding the grants provided for the Red Bull air race in Budapest, Government Spokesperson Zoltán Kovács said that a tax revenue of HUF 5 billion – well in excess of the grants provided for the event – is expected to be raised, and if the entire tourism sector is also included in these calculations, the budget may raise a total revenue of some HUF 20 billion.
European Commission’s official proposal continues to feature a mandatory mechanism without an upper limit
According to the Minister heading the Prime Minister’s Office, Hungary has good chances in the struggle against the mandatory quotas.
Mr Gulyás said at his Thursday press conference held in Budapest that migration will be one of the priority topics of the meeting of the European Council scheduled for 28-29 June, and in this respect there was an important development last week when the proposal of the Bulgarian Presidency was discussed in the Council of home ministers. At this point in time, 16 Member States do not support this draft, while 5 Member States indicated their unconditional support for the proposal, the Minister said.
It is to be hoped that the Bulgarian Presidency’s proposal regarding the mandatory quotas will not be pushed through at the upcoming summit of EU heads of state and government, he said. As far as they can see, the balance has shifted in the direction of the position of the Hungarian government – due to political changes and changes of government, among others – and today we have incomparably more allies on the issue than we had a few years or even a few months ago.
Mr Gulyás said the European Commission’s official proposal continues to feature a mandatory mechanism without an upper limit, but they believe that the chances are good in this struggle, the decision on the quotas can be deferred, or can even be changed.
He indicated that the Venice Commission will decide on the Stop Soros legislative package next week, and according to the usual practice the draft of the Commission’s recommendations will be disclosed a few days earlier. Parliament will be able to decide in light of those recommendations.
Regarding the amendment of the Fundamental Law on homelessness, he said that also today the situation is that – while there are no precise statistical figures concerning the number of homeless people – according to the majority of experts there are enough beds and other facilities for everyone. This means that the required capacity is available, and the government is also ready to allocate significant extra funds for extending the capacity of these facilities if necessary, he stressed. In the government’s view, no one has the right to use public premises in the way that homelessness involves. Those who do so must be taken to night or daytime shelters.
He told the press that the government is determined to take action, and they support Fidesz’s proposal.
Regarding a recent Fidesz proposal that administrative courts should not come under the supervision of the National Judicial Council, he said that this is a perfectly legitimate proposal. Judicial administration has a number of different forms, and each and every one of these operating in Europe is constitutional and operational.
In answer to a question he said that there is no proposal before the Government that would change the VAT on new housing properties, meaning “the intention that was made clear earlier” to uphold the preferential VAT rate until the end of 2019.
In the context of the instruction regarding a review of motorway projects published in Magyar Közlöny [Hungarian Gazette], he said that the Minister will table a report, and the government will decide in light of the findings of that report. They are examining several motorway sections, including the Miskolc-Kassa (Kosice) section, he indicated.
In response to a journalist’s suggestion that there is a contradiction between the communique of the Ministry of Human Capacities and a statement made by the minister regarding the school year, he said that the World Cup is just beginning, and the school year will not be extended. He said as a child he only ever sympathised with governments in his “childhood political experiences” which did not want to shorten the summer holiday, and in this respect he still has not grown up. In answer to another question, he said that he is rooting for the England team at the World Cup as the Italians did not qualify.
Mr Gulyás said he believes that the ten-week summer holiday is a good thing. According to the government, the idea that everyone should have the opportunity to go to summer camps for two weeks should be fully supported, but there is no need to make this compulsory. Everyone should decide for themselves, and it is good if the state is able to provide favourable conditions for that decision, the Minister highlighted.
Regarding reports that “Lőrinc Mészáros should have a giga-bank as a rival to OTP”, he said he is not aware of such plans, and the government has no intentions of this nature. They would like minimum 50 per cent of the Hungarian banking system to be in Hungarian ownership. This is an issue of national sovereignty, but the rest of the story is nothing but journalistic indulgence, he said.
He said regarding opposition reactions to next year’s budget that it is nonsense to claim that less money will be spent on education and culture than on the construction of stadiums. There are no excess funds for the latter in general: the construction of the Puskás Stadium must be finished, and there are additional funds allocated specifically for the purpose, he laid down.
Concerning the raising of the security reserves in the budget, he indicated that there are signs which call for caution. He agrees with the Finance Minister that there will probably not be a crisis, and certainly not on the scale of the 2008 crisis, but a number of EU Member States struggle with very high sovereign debt rates, and interest levels are rising throughout the world. At the same time, a trade war is unfolding between the United States of America and Europe, and there is no way of knowing to what extent this will escalate. The government supports the approach that the EU should adopt clear and proportionate counter-measures.
The Minister agreed that Budapest should have a stadium with a capacity of almost 70,000 which will also host concerts, in addition to sports events, and will be the region’s largest facility of this type. This will clearly enhance Budapest’s attractiveness, and will generate revenues for the city which will offset the expenditures, he argued.
In answer to another question, he said they support the development of bathing complexes, but the municipalities concerned will make the relevant decisions.
Mr Gulyás said regarding recent talks in Germany that there is a good dialogue between CDU and Fidesz as between two allies, while as far as the dialogue between CSU and Fidesz is concerned, there was never any faltering. They agreed with the Secretary General of CDU that there must be permanent cooperation between the two parties, and in the future they would like regular, annual meetings on the most important content issues Europe faces as at any time in order to lay down what they agree and what they disagree on.