Hungarian government: Hungary is truly liberal, unlike ‘illiberal’ Brussels – UPDATE

Hungary is “liberal in the classical sense of the word”, the head of the Prime Minister’s Office said at a talk at the Károli Gaspar University of the Reformed Church in Budapest on Wednesday evening, arguing that, “unlike Brussels”, Hungary did not restrict the freedom of speech.

Hungarian public life makes room for diversity of opinion, “but we see the exact opposite of this in Brussels”, Gergely Gulyás said, insisting that “Brussels is actually the one that is illiberal”.

Asked by László Trócsányi, the university’s rector, how he thought Hungarians saw the European Union, Gulyás said he believed that like him, the Hungarian people had “a very bad opinion of the EU”, arguing that there was nothing happening in the bloc that he considered to be right.

Gulyás, added at the same time, that this did not change the fact that Europe had to be a unified economic community in the global economic competition of the 21st century, which he said the EU could guarantee.

Govt to roll out pensioners’ VAT rebate scheme in H2

The government will introduce a VAT rebate programme for pensioners in the second half of the year, Gulyás said at a press briefing on Thursday. He said the government had mandated the national economy ministry to hammer out the details of the programme announced by the prime minister in his annual state of the nation address. The VAT rebates will definitely apply to vegetables, fruit and dairy products, and add up to HUF 10,000-15,000 per month, he added. Pensioners may avail of the rebates by using a card.

Gulyás: USAID funding ‘biggest corruption scandal’ in Western world’

The prime minister has appointed Fidesz MEP Andras Laszlo to investigate American aid agency USAID’s foreign funding programmes involving Hungary, the head of the Prime Minister’s Office said on Wednesday, on Thursday, calling the case “the biggest corruption scandal in the Western world”.

The ruling Fidesz-Christian Democrat parliamentary groups will submit legislative and possibly even constitutional amendment proposals aimed at combatting foreign interference in public affairs “within weeks”, Gergely Gulyás said.

He said the “USAID affair” linked to the former US Democratic administration and uncovered by US President Donald Trump and Elon Musk, the head of the Trump administration’s Department of Government Efficiency, was the “biggest violation of sovereignty and the biggest attempted interference operation” in the Western world. “Media outlets, journalists, political activists and so-called civil organisations capable of influencing public opinion were bought off,” Gulyás said.

The Hungarian government believes the aspects of the case concerning Hungary call for the broadest possible investigation, he said. The prime minister has appointed MEP Laszlo to serve as the government commissioner to gather the evidence in the case concerning Hungary. He will be expected to reach out to American party organisations and compile a report identifying the recipients of USAID funding in Hungary, Gulyás said. The report will also detail how and with what purpose the previous Democratic administration had influenced Hungarian public opinion, he added.

“The practice of using money to influence Hungarian public opinion must be put to an end once and for all,” Gulyás said, adding that this was forbidden regardless of whether it came from Russia or the United States.

Hungary rolls out Europe’s biggest tax reduction programme

New measures announced by the government will give Hungary the “most comprehensive” tax system supporting children and employment in Europe or even the world, Gulyás said. Gulyás said the government had discussed the details of Europe’s biggest tax reduction programme at a cabinet meeting on Wednesday.

From October 1, a personal income tax exemption for mothers of three, affecting 250,000 taxpayers and leaving households with an annual HUF 200bn, will be rolled out, he added.

PIT exemptions will be introduced gradually for mothers of two, first for the 120,000 taxpayers under 40, from 2026, with an annual fiscal impact of HUF 120bn. The exemption will be extended to 210,000-220,000 mothers of two between 40 and 50 from 2027, to the close to 230,000 taxpaying mothers between 50 and 60 from 2028, and to 110,000 mothers over 60 from 2029.

Gulyás said the government’s plans to fight inflation and reduce food prices were discussed at Wednesday’s cabinet meeting. The government was presented with an analysis of the current situation by Marton Nagy, the economy minister, adding that January data showed “an excessive rise in food prices, the most dangerous trend which must be addressed”. Nagy has already met with representatives of large food chains and “a comprehensive action plan involves introducing market protection measures, profit restrictions and cutting red tape for companies in the sector,” Gulyás said. He said the measures could bring positive results in March, but failing that, the government would set prices, but only as a “last resort”.

Concerning the VAT rebate programme for seniors, Gulyás said Orbán has instructed the economy minister to draft the details.

At its meeting, the government decided that its measures should cover vegetable, fruit, and dairy produce, Gulyás said, adding that seniors could expect to receive a refund between 10,000-15,000 forints (EUR 25-37) each month.

Meanwhile, the minister said the “USAID affair” linked to the former US Democratic administration, uncovered by US President Donald Trump and Elon Musk, the head of the Trump administration’s department of government efficiency, was the “the biggest corruption scandal … the biggest violation of sovereignty and the biggest attempted interference operation” in the Western world.

“Media outlets, journalists, political activists and so-called civil organisations capable of influencing public opinion were bought off,” Gulyás said. The Hungarian government believes the aspects of the case concerning Hungary call for the broadest possible investigation, he said.

The prime minister has appointed MEP András László to serve as the government commissioner to gather the evidence in the case concerning Hungary. He will be expected to reach out to US party organisations and compile a report identifying the recipients of USAID funding in Hungary, Gulyás said. The report will also detail how and with what purpose the previous Democratic administration influenced Hungarian public opinion, he added.

Gulyas said the government commissioner’s investigation would uncover how the foreign donations had made their way to Hungary, who the beneficiaries were and what they were spent on. “The practice of using money to influence Hungarian public opinion must be put to an end once and for all,” Gulyas said, adding that this was forbidden regardless of whether it came from Russia or the United States.

He said the government wanted parliament to pass the related amendments before Easter. He noted that similar investigations had been launched worldwide, noting that Germany’s conservative Christian Democratic Union (CDU) had also initiated one on the “unprecedented interference” in German domestic affairs.

Meanwhile, Gulyas said government will make several proposals to amend Hungary’s constitution. The constitution will stipulate that “there are two sexes: female and male”, he said. Further changes could ensure the right of small communities to self-defence “to ensure that small communities can decide whom they want to live together with,” Gulyas said.

He said the government had received such requests from many mayors, adding that the minister of public administration and regional development would facilitate consultations with local leaders on the subject. Furthermore, a prohibition on drug abuse will also be enshrined in the constitution, as will stipulations that “the right of children to physical, psychological and moral development precedes all rights with the exception of the right to life”, Gulyas said.

Government spokeswoman Eszter Vitályos said state investments with a value of over 70 billion forints (EUR 174.9m) have been completed in recent weeks. German engineering giant Bosch inaugurated a 54 billion forint 100,000sqm regional logistics and distribution centre in Miskolc, in north-eastern Hungary, she said.

Health-care related upgrades included the renovation of the Velkey László Paediatric Health Centre in Miskolc and the addition of a new operating theatre at the Kaposi Mor Teaching Hospital in Kaposvar, in western Hungary, she said.

The government has also completed 11 urban development projects with a combined value of 11.3 billion forints, Vitályos said. Regarding the government’s 21 point economic action plan, she said more than 12,000 people have applied for the zero-interest credit for young employees. Also, more than 1,800 businesses have registered for a scheme designed to support the competitiveness and investments of SMEs, she said.

Gulyás said he had been certain that “foreign mechanisms to influence public life (in Hungary) will be radically reduced with the change of administration in Washington.”

Asked about the funds allegedly totalling 30.5 billion forints disbursed by the “Soros network” in Hungary, Gulyás said the incoming government commissioner would reveal the figures in due course. He said political parties eligible for financing benefitted from over one billion forints a year, adding that “the magnitude of foreign influence should be compared to that amount”.

Answering another question concerning USAID activities in Hungary, Gulyás said Budapest Mayor Gergely Karácsony should clarify “how his negotiating partners influenced municipal decision-making”. “This is a problem for democracy and sovereignty … if those paid from abroad are paid for certain activities and they are expected to deliver something … any state would seek to prevent that,” Gulyás said.

Asked about the incoming USAID government commissioner’s work for the Megafon Incubator Centre, Gulyás said the centre had “repeatedly declared that it had not received any funding from abroad or from the Hungarian state”.

He was asked if the Hungarian government, similarly to the US, would send a government commissioner to Ukraine to investigate possible attempts at influence, Gulyás said: “When Ukraine has a government that declares that the previous government sought to influence unlawfully, or at least improperly, and the Hungarian public and expresses its readiness to investigate, the Hungarian government would delegate a commissioner.”

Asked about the head of the sovereignty protection office, Tamas Lanczi, and his asset declaration showing that he received 500,000-1,000,000 forints per month from the Hungarian Breweries Association who members are foreign-owned, Gulyás said “this hardly has any impact on national sovereignty”.

Meanwhile, Gulyás said he trusted that the German government would support attempts to seek uncover aid agreements between the European Commission and civil organisations.

“There are few organisations less discredited than the EC or the European institutions, therefore I cannot imagine a more shameless position than acting as a governor and demanding transparency from the member states,” he said.

Meanwhile, Gulyás said Budapest’s annual LGBTQ Pride festival “cannot take place in the public form as we have known it in the past few decades”. The government is committed to protecting children, and “the country does not need to tolerate a Pride march across downtown, now that the [former] US ambassador cannot lead it,” he said. He was asked if the government would use police force if Pride participants still chose to take to the streets, Gulyás said: “The government is not working under the assumption that people won’t abide by the regulations.”

Asked whether “exiling fundamental rights to between four walls” followed a Russian formula or was “the government’s own development”, Gulyás said the relevant bill “will not curb rights, but if there is a conflict between fundamental rights, it must be resolved.”

Concerning a suggestion that the annual Pride festival, so far organised 29 times, has not been seen problematic “despite the child protection law has been in force for some time”, Gulyás said “it has been a problem for a long time, but we had two boots on our chest”, adding that one of them had been the former US ambassador. “Now that has been removed, there is more freedom to breathe,” he added.

Answering a question how the sex of babies born with a biological deficiency would be determined in future, Gulyás suggested it would happen the same way it is done now.

Hungary will lift the state of emergency declared due to the war in Ukraine once there is peace, Gulyás said. He called for a return to “a policy of common sense”, insisting that the EU had made “irrational decisions” in connection with the war and had not served Europe’s interests. Gulyás said the new US administration’s push for peace had left Europe on its own.

Asked if Hungary would work with the US as a co-author on its peace plan, Gulyás said: “We know our place.” He said Hungary was aware of its relative military and economic strength, adding, at the same time, that the Hungarian government’s remarks could have had a positive impact on the US administration.

Asked if Hungary would take part in Ukraine’s reconstruction, Gulyás said the process of reconstruction had yet to begin.

He said the US was asking for Ukraine’s rare earth minerals and market access as a form of payment for its support, but it was unclear if Europe would be given any economic opportunities. Hungary, he said, had aided Ukraine on a bilateral basis without expecting anything in return.

Meanwhile, Gulyás said Hungary must make us of every possible opportunity to ensure that the rights of Ukraine’s minority communities are restored to the status quo ante 2015. The Hungarian government believes that until this is done, none of Ukraine’s European aspirations could be taken seriously, he said.

Gulyás said it was premature to talk about whether the autonomy of western Ukraine’s Transcarpathia region could be part of a peace agreement, adding that he had always supported minorities’ demands for autonomy.

Meanwhile, he said the European Commission has guaranteed that no EU candidate country can block a member state’s energy and gas imports.

On another subject, Gulyás said Prime Minister Viktor Orban was likely to meet US President Donald Trump before Hungary’s 2026 general election, and Trump could pay a visit to Hungary during his second term.

Asked if German-Hungarian relations could improve after last weekend’s German federal election, Gulyás said: “They won’t deteriorate because they couldn’t get any worse”. He said the Hungarian government had not had a good relationship with the previous German leadership, noting their “sharp ideological differences”. The question, he said, was what kind of policies CDU/CSU would pursue.

Gulyás did not want to comment on a fresh report that the Court of Justice of the EU, at the proposal of the advocate-general, could annul an earlier ruling approving Hungary’s state aid for the expansion of its Paks nuclear power plant. Gulyás said that because “months pass” between the advocate-general’s proposal and a court ruling, there was still time to prepare.

Meanwhile, he said the personal income tax exemption for under-25s will leave an extra 230 billion forints with young people in 2026. The PIT exemption for mothers under the age of 30 will save them 40 billion forints, while mothers under the age of 40 with two children will save 120 billion forints next year, he said.

The PIT exemption for mothers raising three children will save them an annual 200 billion forints, and mothers with four children will save 50 billion, he said. Tax exemptions on CSED (baby care) and GYED (child care) will save recipients some 20 billion forints, he added.

Gulyás said the newly-announced family benefits will not impact this year’s budget, adding that next year’s budget would have to be drafted with these in mind.

In response to another question, Gulyás said the budget deficit target of 3.7 percent of GDP was achievable, adding that the “most pessimistic” projections put economic growth this year between 2 and 3 percent.

Gulyás said parliament was expected to pass the 2026 budget on June 16. Asked about the dispute between the government and the Budapest metropolitan council, Gulyás said Budapest’s obligation to pay the solidarity tax was to the benefit of the other localities.

Asked about the impact the tariffs the US plans to impose on imports from the EU will have on Hungary, Gulyás said Hungary was trying to help limit the impact of the measure on Europe and ensure that Hungary is exempt of the tariffs, but this was “not easy” given the EU’s common customs regulations.

“No decision has been made yet, and we have to talk to the Americans,” he said, adding that the current situation of the EU imposing “far higher tariffs” on American cars than vice-versa was “unsustainable”. He acknowledged that the US tariffs on European car imports would primarily impact the German economy, adding that Hungary, too, would be affected given the presence of German carmakers in the country.

He said the European Commission’s decision to uphold a 10 percent tariff on US vehicle imports showed “a total lack of common sense” on its part. He said it would be a “big step forward” if the US administration accepted the tariff imposed in Europe.

Asked about the EV market, Gulyás said it was still growing, though not as fast as before. Hungary had not made the wrong decision by choosing to support EV production, he said, adding that the start of production at China’s BYD plant in Hungary would contribute significantly to the economy..

Government drafts complex action plan to bring down inflation

The government is drawing up a complex action plan to bring down inflation, especially food prices, Gulyás said. National Economy Minister Marton Nagy gave an assessment of the economic situation and outlined the most effective measures against inflation at a cabinet meeting on Wednesday, Gulyás said.

The action plan involves the introduction of market protection measures and profit caps as well as cutting red tape, he said. If the measures fail to produce results in March, the government will introduce regulated prices, he added. He said regulated prices were a “last resort” but would be introduced if necessary. He noted that Nagy had held talks with industry insiders to address “excessive” price increases that showed up in January data.

Government proposes several changes to constitution

The government will make several proposals to amend Hungary’s constitution, Gulyás said. The constitution will stipulate that “there are two sexes: female and male”, Gergely Gulyás said.

Further changes could ensure the right of small communities to self-defence “to ensure that small communities can decide whom they want to live together with,” Gulyás said. He said the government had received such requests from many mayors, adding that the minister of public administration and regional development would facilitate consultations with local leaders on the subject.

Furthermore, a prohibition on drug abuse will also be encoded in the constitution, and the Fundamental Law will include stipulations that “the right of children to physical, psychological and moral development precedes all rights with the exception of the right to life”, Gulyás said.

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