Hungarian government warns of escalating war risks – UPDATED with main points of press briefing🔄

“The danger of war is greater than ever,” the head of the Prime Minister’s Office told a regular government press briefing on Thursday.

Gergely Gulyás noted that the US would have a new administration from 20 January next year, but said “it seems that in the remaining less than two months the incumbent Democrat government and some European leaders will do everything to increase the danger of an escalating war.”

Hungary’s defence council and the government discussed the situation and increased air defences along the Hungary-Ukraine border in the wake of recent attacks on the Transcarpathia region, Gulyás said.

The Hungarian government “firmly opposes” attempts to thwart the incoming US administration’s pro-peace policy by sending more weapons to Ukraine.

Meanwhile, next year’s budget would represent “a new economic policy”, Gulyás said, citing Mihály Varga, the finance minister.

Gulyás said a real wage increase of around 10 percent was expected this year, and the wage agreement based on growth reached by employers, employees and the government would guarantee this for the next three years. Affordable housing was another important issue, he said, so next year’s budget would provide employers and employees with the means to ensure affordable housing.

A renovation scheme for rural homes will be launched next year, providing state support of a maximum of three million forints for people living in small settlements, and employers would be able to give housing support of up to 150,000 forints a month at the most favourable tax rate possible, he said.

Gulyás said the housing loan with a 5 percent interest rate cap guaranteed by banks for first-home buyers appeared to be faltering because the criteria set by banks were “excessively restrictive”, so only few people were taking advantage of this opportunity. So banks are being encouraged to modify the conditions so that this option can be made available to a wide range of customers, he added.

Gulyás said the government would extend a rate freeze on retail credit for another six months, ensuring that families’ interest payment burdens would not increase. But for the rate freeze, families would have had to pay hundreds of billions of forints, but the bank sector was willing to cover the additional costs, he said.

He said the government did not believe it would be right to abolish the rate freeze in the current interest-rate environment, he added.

At Wednesday’s cabinet meeting, the government authorised Marton Nagy, the national economy minister, to consult the Hungarian Chamber of Industry and Commerce on the details of the programmes, Gulyás said, adding that the programme would inject a total of 1,400 billion forints into the economy next year.

Gulyás noted that the budget also contained measures to double tax relief for families raising children in the space of a single year while also guaranteeing the 13th month pension.

This year pensions were raised by 6 percent, as inflation was slightly above 3 percent, and the government hopes that next year not only the 13th month pension will be guaranteed but also an increase in the real value of pensions, Gulyás said.

Regarding the wage agreement, Gulyás said wages were expected to rise by 40 percent over two years, and with inflation forecast at 2-4 percent in the long term, this would translate to a real wage increase of a similar size.

He said the size of the minimum wage increase put it among the top five in Europe, and the government would provide the necessary resources for it in the public sector.

Meanwhile, Gulyás said that the “pact” formed between the European People’s Party and the European left and liberals in Brussels “does not serve the interests of Europe or Hungary” but fell in line with the new European Commission’s programme.

Gulyás said the plan included implementing the migration pact, noting that the document did not confine asylum procedures to outside the European Union’s borders.

The pact, he said, also pledged further support for Ukraine and the war, adding that this went against the will of European voters “and the changes that’ll happen in the United States in January”.

Gulyás said the government also condemned the call to allow EU funds to be withheld on the basis of “political sympathy”.

Gulyás said it was “especially detrimental” that the pact included the introduction of new European taxes, which he said contravened European law under which taxation is a national competency.

“Brussels must not be given powers beyond those it already has in any area,” Gulyás said, adding that some of those powers should even be curbed because “Brussels is acquiring those rights through a stealthy expansion of its powers and bypassing or neglecting the treaties rather than amending them.”

Gulyás also said the pact included “an attack” on Hungary’s child protection law since “proposals aimed at ensuring the possibility of adoption to same-sex partners can be raised.” Such proposals “go against the Hungarian constitution and are incompatible with the interest of children,” he added.

Meanwhile, the minister said next year could bring peace and economic growth despite all difficulties. For the first time, he said, there was a chance of peace in Hungary’s neighbourhood, replacing the war looming over Europe. This could lead to lower energy prices and a chance to restore Europe’s competitiveness, he added.

He said large companies such as BYD, CATL and BMW starting production in Hungary next year provided “an excellent chance” for the economy to pick up, and he noted forecasts of a favourable growth trend. He said projections of a 3.4 percent growth were conservative, while “peace coming at the Ukrainian front could have a further boosting effect.”

Concerning the incoming European Commission, Gulyás said that European politics and the commission’s leadership of would remain the same, flying in the face of the will of voters expressed in the European elections. Meanwhile, he welcomed the re-appointment of Hungary’s commissioner, Oliver Varhelyi.

Gulyás said it was “worrying” that the European People’s Party was “deceiving its voters across Europe,” since the party had campaigned on a platform that excluded the left and opened up to the right, before opening up to the left-liberals and shutting off the right straight after the vote. The three group leaders’ pact signed on Wednesday “topped up the deceit”, he added.

Government spokeswoman Eszter Vitályos said state investments with a value of close to 14 billion forints were completed in the past two weeks. She said a stretch of the 441 highway between Kecskemet and Nagykoros, in central Hungary, has been resurfaced at a cost of more than 9 billion forints.

Among health developments, Vitályos mentioned a hospital in Nagyatad, in the south-west of the country, renovated at a cost of 700 million forints, apart from other renovation projects benefitting kindergartens, schools, and churches across the country.

Answering a question, Gulyás said central Europe and Hungary “must be saved from migrants”. He said the EU’s migration pact was “not functional” and could not be implemented. “The relocation of migrants is unfeasible and unacceptable,” he added. He said Hungary enjoyed a “national consensus” on migration but “the opposition has not joined it and has sided with migrants instead”.

Asked about the fine levied on Hungary in connection with its migration policy, Gulyás said it would depend on the new European Commission whether a solution to the issue could be found.

He said without Hungary’s big spending on protecting the EU’s external borders, migrants from the south would stop in Vienna, Berlin and Amsterdam. “It would be in the interest of the European Commission to reach an agreement, but the fact is that Brussels supports migration and has not given up on its goal to bring as many migrants to the EU as possible,” said Gulyás.

Meanwhile, addressing the issue of the current forint exchange rate, Gulyás said this was the central bank’s scope of responsibility and the government respected the bank’s independence. The Hungarian economy benefitted from a steady exchange rate but “currently this isn’t the case”. Current volatility, he added, could be eliminated, however.

Asked about government intervention to reduce inflation, Gulyás said the government had a tool-kit for cutting inflation, while the tools for handling the exchange rate were in the hands of the central bank. He said the government could help by supporting strong economic growth and by cutting the budget deficit “by 2 percent this year”.

Answering a question about Hungary’s electoral system, Gulyás called it “good and proportionate”, adding that the five percent threshold required for a party to enter parliament should not be changed. The foundations of the legal system have not changed since 1990, he said, adding that the new amendment submitted on the election law was aimed at ensuring the proportionality of individual constituencies

In response to another question, Gulyás said if American ambassador David Pressman was looking to find anti-Semites he should “put them among guests invited to the Seder dinner held at his residence” and examine them in light of the “brutal anti-Semitism” has developed in universities in his own country “infected by Democrat ideology”. He noted that Hungary will host soccer team Maccabi Tel Aviv, which was unable to play a match in the Netherlands without encountering anti-Semitic incidents there.

Insisting that support for the new European Commission was “significantly lower” than for its previous iterations, Gulyás said the reason was that European people had voted for parties and party alliances that were critical of the body.

Gulyás said the commission’s activities were defined in light of the personality of its president as well as the party family backgrounds of the commissioners and the countries they came from. “Although the European People’s Party had a poor showing in the two previous elections, it has the largest group in the European Parliament, and they the defining force in Brussels,” Gulyás said.