The Hungarian government is poised to introduce substantial reforms to the rules governing the implementation of Hungary’s Recovery and Resilience Plan, aiming to enhance the transparency of financial and administrative processes while improving access to EU funds.
According to Portfolio, the proposed measures span a broad range of areas, including project financing structures and oversight mechanisms. These reforms are expected to have far-reaching implications for both the Recovery EU Funds and the Cohesion Framework.
Photo: depositphotos.com
One of the most important changes is that the Restoration Fund now also covers investments based on projects financed from the central budget. This innovation means that the measures covered by the Restoration Fund will also be subject to the strict rules, even if they are not directly financed by EU funds.
The proposal redefines the concept of financial instruments to bring them into line with the current EU legal framework. The new rules will allow the combined use of grants, which will increase flexibility in the use of EU funds. The funds concerned are the European Regional Development Fund, the Cohesion Fund and the European Social Fund Plus.
Control and transparency
The Internal Audit and Integrity Directorate will also have a broader range of tasks, with a greater role in identifying conflicts of interest and conducting risk-based audits. To support this process, the ARACHNE risk assessment tool will be introduced to help identify potential irregularities in a data-driven manner.
This is partly in response to the European Commission’s expectations to prevent financial fraud and detect irregularities quickly. The rules for setting market prices are also being revised to further increase transparency. For instance, if there are not enough bids in a public procurement procedure, the shortfall can be made through online bidding.
Source: Pixabay
The role of EU Funds
The Regulation allows certain projects to be financed by the Cohesion Fund in the context of operational programmes for the period 2021-2027. This measure could be particularly important if there are obstacles to the absorption of RRF funds, as the deadline for the absorption of such funds is strictly limited to the summer of 2026.
The transfer of projects is subject to strict conditions to ensure that the original objectives and indicators are not compromised. This mechanism can provide a safety net to avoid loss of resources.
The proposal also clarifies a number of technical details. For example, the accuracy of data in the public accounts would be ensured through continuous information to the tax authorities, while the preparation of aid payments would be subject to stricter controls. Control procedures for advance payments would also be fine-tuned to reduce risks.
According to the rules, the new regulation will have a retroactive effect and will enter into force five days after it has been published. This means that the changes will also apply to pending cases.
The next steps
The draft regulation has been published for public consultation until the 17th of December. This will give stakeholders the opportunity to comment on the proposed changes. The government’s aim is to contribute to a faster and more efficient use of EU funds by clarifying the rules and increasing the flexibility of the legal framework while meeting the strict requirements of the EU.
The new rules will not only support more efficient implementation of current projects but will also help Hungary to be better prepared for future EU challenges and opportunities. The measures promise transparency, flexibility and optimal use of resources and EU funds.
“We are building a strong countryside because without that there would be no strong Hungary,” Prime Minister Viktor Orbán said at the inauguration of a section of Route 53 bypassing Soltvadkert, in southern Hungary, on Monday.
Hungary’s government had decided as far back as 2010 that it would put an end to the internal migration seen in rural Hungary, and had set out to ensure that certain parts of the country do not have to prosper at the expense of others. “We set out to make the Hungarian countryside an attractive place where it is worth living because there are jobs and high quality services and everything is accessible within a reasonable time frame,” the prime minister said. “It isn’t right that Budapest’s level of development is at 158 percent of the European Union average, while all other regions are below the average.”
Route 53 bypassing Soltvadkert, in southern Hungary. Photo: MTI
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Orbán said the town of Soltvadkert and Bács-Kiskun County were “winners of the government’s measures”. He said the employment rate in the county has risen to 74 percent from 56 percent since 2010 while the unemployment rate has fallen to 4 percent from 10 percent. Meanwhile, the average wage has risen to 490,000 forints from 160,000, he added. He said the region would play an even more important role in the future, noting the government’s plan to set up a new economic zone in the country’s southern regions. The government has earmarked 330 billion forints (EUR 806.5m) in next year’s budget for making the southern Hungarian countryside stronger, resilient and independent, Orbán said. He noted ongoing investment projects in Kecskemet, adding that bypasses are also being built next to Szeged and Baja, with another one planned for Pécs.
Orbán said that when he last visited Soltvadkert during the European Parliament election campaign in the spring, “there appeared to be no chance for peace” in neighbouring Ukraine. Hungary, he said, had been under “tremendous pressure” from the United States for its pro-peace position, “and the pro-war Brussels bureaucrats were also giving us a thrashing”. But over the past six months, the “pro-war, anti-migration and pro-family forces” have gained a majority in the Western world, he said. Hungary’s ruling parties secured a resounding victory in the EP elections, established the Patriots of Europe party, becoming essential players in the legislative body, and in the United States “our brother-in-arms” Donald Trump was elected president, Orbán said. He said the Hungarian economy was set for a “fantastic year” in 2025, saying Hungary would emerge stronger “from the shadow of the war that has been going on for three years now”.
Hungary’s Ökotárs Foundation is “the local distribution centre” of the “political pressure network”, the Sovereignty Protection Office said on Monday.
The office’s statement said the Ökotárs Foundation had been “distributing funds and building networks” for foreign pressure groups in Hungary since 1994.
Most of the foundation’s revenues come from abroad, it said. Initially, Ökotárs had received funding from American foundations like the Ford, Rockefeller and Soros Foundation via a central and eastern European network called the Environmental Partnership Association, and its financing model gradually changed following Hungary’s European Union accession, the statement said.
The office said that most of Ökotárs’s revenues today come from funds allocated by the European Commission, adding that the EC has earmarked 1.5 billion euros towards the “direct financing of political pressure groups” through its Citizens, Equality, Rights and Values (CERV) scheme.
The Hungarian Sovereignty Protection Office said Anna Donáth, a former MEP of the opposition Momentum Movement, had played a key role in developing this financing model. Over the last two years, close to 18 million euros in CERV money has been transferred to Hungary, close to three-quarters of which had gone to “political pressure groups”, the office said. The Ökotárs Foundation received 3.3 million euros from those funds, which it distributed among “organisations belonging to the foreign pressure network like Amnesty International Hungary, the Helsinki Committee, the Hungarian Civil Liberties Union (TASZ)”, the statement said, adding that investigative reporting outfit Átlátszó and news outlet 444 had also received “significant amounts of money”.
The office said Ökotárs had also distributed funds disbursed by the the US embassy in Budapest. It said outgoing US Ambassador David Pressman had announced a call for applications for direct grants to “network actors” in the autumn of 2023, with the Ökotárs Foundation having been put in charge of distributing the funds. More than 115 million forints (EUR 281,000) in US funding was distributed by January 2024 among outlets like Telex, Klubradio, Nyugat.hu, 444, Magyar Narancs, Atlatszo and Tilos Radio, it said.
The Sovereignty Protection Office said it wanted to alert state authorities to the “grave risk” it said “the Ökotárs Foundation and the network covering the entire region” posed to Hungary’s sovereignty.
There are very few countries that have made more efforts than Hungary for a peaceful settlement of the Russia-Ukraine conflict over the past one thousand days, the foreign minister said on Sunday.
The war has been going on for more than a thousand days and Hungary’s position has not changed ever since it broke out, Péter Szijjártótold public broadcaster Kossuth rádió. Hungary’s position, which has since been proven true, is that this war has no solution on the battlefield where there is only death, suffering and more destruction, he said.
He said that the war claiming human lives in the ranges of a million had not opened the eyes of everyone, adding that weapon deliveries had not changed the balance of power. The Russian army is forging ahead and occupying more and more territories, Szijjártó said.
“The only solution is to be found solely at the negotiating table; there must be talks, but for peace talks a ceasefire in needed first,” the foreign minister said.
Szijjártó noted Prime Minister Viktor Orbán’s proposal of a ceasefire and an exchange of prisoners in humanitarian steps with the upcoming days of the Christmas celebrations taken into consideration.
He also noted the prime minister’s phone conversation with the Russian president earlier this week that lasted for more than an hour.
Photo: FB/Szijjártó
Szijjártó said that as Hungary’s foreign minister he had informed his Ukrainian counterpart as well as the head of the Ukrainian president’s office [about that phone conversation] asking them to arrange a phone conversation between Viktor Orban and the Ukrainian president which he said was rejected “in a bit uneasy, yet cultured manner”.
“Hungary has tried to do everything [possible] under its mission for peace in the past half year, even more than what could be or would have been expected from a country this size,” Szijjarto said.
“We have made every possible effort under our EU presidency in the past six months to use the presidency for a good cause, for a ceasefire, for starting peace talks,” Szijjártó said.
Talking about a threatening email received by Hungary’s embassy in Paris on Saturday, the minister said that it had been sent from a country neighbouring Hungary and contained a picture of a bomb.
The minister said his colleagues in Paris had immediately notified the foreign ministry’s security centre. French authorities arrived at the scene quickly and very professionally with appropriate technology and search dogs. As no explosive device was found, the embassy staff returned to their offices to continue their work, Szijjártó said.
Putin and Orbán in July in Moscow. Photo: FB/Orbán
He said that in his assessment “the world is in an especially dangerous situation today”, with armed conflicts going on at several places, terrorist attacks taking place, terrorist organisations carrying out coup attempts”. “In this situation every threat needs to be taken seriously,” the foreign minister said. “And we have done just that, as the safety, health and the life of our colleagues is most important to us,” he said. He also emphasized that “everything at the embassy has returned to normal,” adding that security regulations had been reinforced.
On another topic, Szijjártó called it a step “less worthy of allies” that the United States had put Gazprombank on a sanctions list as “it was clear which countries in the central European and south-eastern European regions buy energy from Russia due to physical, infrastructural and geographical realities, and it is also clear that they pay through Gazprombank“.
The minister said they had worked hard with the Slovaks, Serbians, Turks and Bulgarians in recent weeks to find a legal solution that will continue to guarantee the security of their energy supply without violating US sanctions, and they have succeeded.
Answering questions about how they managed to disperse a false media report that Bashar al-Assad’s airplane had landed in Budapest, he said that “it was a very rough situation” and it was incredibly dangerous “to involve Hungary in such a red hot conflict”.
“It is possible that this situation arose as part of an orchestrated secret service operation that posed an extraordinary threat to Hungary, so I believe that it is necessary to investigate as thoroughly as possible where this started, who participated in it, and those who participated why they did so.
“Putting Hungary in danger cannot go unpunished,” he said.
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The decision by European Union interior ministers on Bulgaria and Romania’s accession to the EU’s passport-free Schengen zone is one of historic significance and one of the most important achievements of the Hungarian EU presidency, the chief of Hungary’s Permanent Representation to the EU said on Friday.
Speaking to Bulgarian news agency BTA, Bálint Ódor noted that on Thursday EU interior ministers decided to remove checks on persons at the internal land borders with and between Bulgaria and Romania from Jan 1, 2025. “This achievement is not only significant for Bulgaria and Romania but also for the European Union and, of course, for Hungary,” Ódor said.
He said that during its six-month presidency of the Council of the EU, Hungary had managed to achieve a consensus on key policy objectives in areas like migration and the common agriculture policy, “which will guide EU actions for the next five years”. He said progress had also been made on the Hungarian presidency’s top priority of improving the bloc’s competitiveness.
Source: FB/Hungarian Police
Ódor said Hungary had also aimed to speed up the accession procedure of the Western Balkan countries. He said the opening of the first stage of accession talks with Albania had been another breakthrough. In response to a question, he said transatlantic relations will always be crucial for the EU. Hungary, he said, had a “good relationship” with US President-elect Donald Trump, adding he believed the country could “act as a bridge”.
Tuzson: Hungarian presidency will have last impact on EU competitiveness
Hungary’s EU presidency will be talked about “for a very long time” as its approach to competitiveness will have a lasting effect on how the whole bloc functions, Bence Tuzson, the justice minister, said in Brussels on Friday.
Speaking before a meeting of the Council of Justice Ministers, Tuzson said Hungary’s presidency had highlighted the importance of taking a broad approach to competitiveness that “permeates the operations of the entire European Union … in all areas, from civil law, the economy to criminal law.”
Competitiveness, he added, was a priority as Europe lagged behind its competitors. The Hungarian presidency has promoted matters that help improve the bloc’s competitiveness, the minister said.
Concerning the council meeting’s agenda, Tuzson said it would include a proposal to promote the application of artificial intelligence in justice, in order to make procedures faster and more efficient.
In terms of criminal law, Tuzson said it was important to adopt a planned directive aimed at preventing people smuggling. “If the EU wants to protect Europe’s borders it will need to take more effective measures against smugglers,” he said. He called for “firm and clear” action by the EU “to facilitate prevention of people smuggling across borders.”
The aim is to make EU members more competitive
Tuzson said passing European legislation against the sexual harassment and exploitation of children was a priority of the Hungarian presidency. The resulting new rules will increase international cooperation to investigate such cases and to take perpetrators to court, he added.
The Hungarian presidency made “unprecedented progress” on a directive concerning economic competitiveness and bankruptcy procedures, Tuzson said, adding that uniform regulations were necessary “to make European countries increasingly competitive and help them stand the test of time in decades to come”.
The minister was asked about money laundering charges against former EU commissioner Didier Reynders, and he said “such cases undermine trust in the EU” and called on the European Commission to do everything to restore people’s trust in European institutions.
Speaking at a press conference after the meeting, Tuzson said one of the most important achievements of the Hungarian presidency had been a change in direction in the bloc in terms of shifting the focus of EU policies to the improvement of European competitiveness.
Tuzson said the Hungarian presidency had managed to ensure that every EU policy has to be considered from the point of view of whether it helps improve competitiveness.
The Budapest Declaration on a new European Competitiveness Deal establishes a comprehensive principle that competitiveness has to be a key consideration in all areas, the minister said.
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Hungarian surgeons have performed the first ever pacemaker implantation in African country – read more HERE
Hungarian surgeons have performed the first ever pacemaker implantation in Chad, the state secretary for helping persecuted Christians said on Friday.
Hungary carried out two successful medical missions in Chad in the autumn which included fundamental life-saving screening tests, training, as well as the country’s first ever pacemaker implantation, Tristan Azbej told MTI.
The implantation was performed by a team of health-care volunteers from Budapest’s St. Ferenc Hospital as part of the Hungary Helps Agency’s medical mission, Azbej said. This milestone, he said, was the start of a new chapter in Chad’s health-care system, involving local doctors and experts.
Photo: FB/Tristan Azbej
The support provided through the Hungary Helps humanitarian scheme was indispensible in ensuring that pacemaker implantations could be performed locally, contributing to reducing mortality rates related to heart disease, he said. The programme’s long-term goal is to allow local surgeons to master the skills needed for implanting and programming pacemakers, ensuring that these procedures could be performed in Chad. Azbej added that the mission involved ECG and pacemaker programming training sessions.
Chad’s health ministry wants to ensure that pacemaker implantations can be performed locally so that patients do not have to travel abroad to get the procedure done, the state secretary said. The Hungary Helps Agency’s programme did not just provide life-saving care, but also laid the foundations for the local health-care system’s long-term sufficiency in this area, he added.
Hungarian volunteers spent 140 working days treating refugees, carrying out hospital duties and conducting training programmes in Chad over the last two months, in cooperation with the country’s health ministry, Azbej said.
The Hungary Helps Agency has also donated a significant supply of medicine to the most important hospitals in N’Djamena and outside the capital.
Local and central government officials inaugurated a 4-kilometre new motorway stretch of the M85 motorway, between the city of Sopron and the border with Austria, on Saturday.
The stretch, which includes a 780-metre twin tube tunnel, was built at a cost of HUF 67.2bn, funded entirely with state resources. The stretch was built by a consortium of Domper, Subterra-Raab and Pannon-Doprastav.Sopron only able to develop when connected to world around it, says PM OrbánThroughout its history, the city of Sopron has only been able to develop when it was connected to the world around it, Prime Minister Viktor Orbán said in Sopron, in western Hungary, on Saturday, at the inauguration of the final stretch of the M85 motorway and the Vienna Hill tunnel.
In his speech, Orbánnoted that in 1921 Sopron and its surrounding villages voted in a referendum to remain within Hungary’s borders, but the global powers had separated Hungarians with the new borders forced on them. But, he added, the fact that “we are here 103 years later” was a testament to the nation’s strength and its confidence in the future.
The prime minister said that after the first world war Hungary’s enemies had decided that Hungarians “should be small and poor”. But Hungarians never accepted this fate, and “we always wanted Hungary to be a big and rich country”. “If we lose the war, we’ll win peace,” Orbán said. He said Hungarians had always lost out when the nation had been “pushed to civilisational borders”. “We were on the losing end when the Christian-Islam civilisational border was located on the country’s territory, centuries of war cost Hungarian lives, and the country’s economic strength was also lost,” he said.
Photo: MTI
“We were also losers of the Cold War when we were ripped away from Europe,” the prime minister said. “Sopron was also a loser of this period, with the most difficult period in its history being the time when the Iron Curtain was but a few kilometres away, multiplying all the tragedies of the Trianon peace treaty.”
Sopron has only been able to develop when it was connected to the world around it, Orbán said. The Sopron area connects not just north and south, but also east and west, and is where the Carpathian Basin meets the Alps region, Orbán said. “And what’s true for Sopron is also true for Hungary: it can only develop if it can take advantage of its favourable geographical location and if it connects to the world around it instead of closing itself off,” the prime minister added.
He said this required active political and economic relations as well as infrastructure connecting the country to the rest of the world such as airports, railways, bridges and motorways.
Photo: MTI
He said his government had decided to turn areas that had been on the periphery during the Cold War into central hubs and “put Hungary on the map, in the middle of Europe”.
The government has spent 4,200 billion forints (EUR 10.3bn) on public road developments over the last 15 years, building 870 kilometres of motorways and highways, Orbán said.
Including the M85 motorway, there are now 10 expressways that extend to the country’s borders compared to just three in 2010, Orbán said.
The completion of the M85 links it with the Austrian border and the entire Hungarian motorway network, he said.
Romania’s accession to the European Union’s passport-free Schengen zone meant that “we have eliminated the Romania-Hungary border”, he said, adding that Saturday’s inauguration could be considered connecting Hungarians in Burgenland with Hungarians in Transylvania.
Photo: MTI
He said next year will see the M44 expressway linked to the motorway at Kecskemet, in central Hungary, and preparatory works are under way on road M49 as well as the new section of the M4 motorway. Today there are ten four-lane expressways that extend to the border, but that number will rise to 19 within ten years, he added.
Next year the government will spend some 8,100 forints on more than 300 investment projects which will make Hungary a “real connection point” and a commercial and logistics hub in Europe.
Orbán said his plan was that in 2025 “we’ll push the clouds of war aside”, adding that the government was working to make 2025 “a fantastic year” for the economy.
BMW and China’s CATL and BYD plants will start production and the Demjan Sandor Programme which aims to scale up SMEs will also be launched, the prime minister said.
Wages will rise, and Hungary will see an unprecedented minimum wage increase over the next three years, he added.
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Levente Magyar, a state secretary at the Ministry of Foreign Affairs and Trade, has started business talks in Florida on strengthening economic ties between Hungary and the United States, building on the good ties with the incoming US administration.
Magyar said in a statement on Friday that the excellent ties between Hungary and the Trump administration could pave the way for new opportunities in the area of economic cooperation. On the basis of the talks, products and services could appear in Hungary that would benefit the whole economy, he added.
Among the people with whom Magyar met was the investor Tamás Péterffy.
Deputy FM Magyar. Photo: MTI
Official: Age of sovereignty has arrived
2025 will usher in “a new age of sovereignty”, Balázs Orbán, the Prime Minister’s political director said, addressing the Budapest Global Dialogue conference on Friday. He said 2024 marked the end of an old era of an obsolete neoliberalism which had neither worked in the EU nor the US. Participating in a roundtable at the the conference organised by the Hungarian Institute of International Affairs and the Observer Research Foundation, Orbán said the Western world was undergoing a shake-up and hopefully the biggest success of 2025 would be the end of the Russia-Ukraine war, “which has caused serious damage to the entire world”.
He said there was already “political momentum” to end the war thanks to new forces in the EU, the US, India and China. “We’re optimistic,” he said. “I think we can convince the warring parties to find a path to peace.” Commenting on the US elections, Orbán said the outcome was down to issues such as migration and law enforcement policy as well as the situation of the judiciary and “the stagnation of the economy”. He added that changes in America would positively affect the rest of the world, adding that a strong US, China and Europe, would have a stabilising effect.
Max Abrahms, a professor of political science at Northeastern University, said US foreign policy would discard liberal internationalism and become more transactional, adding that the US foreign policy would not be uniform but “differ from country to country and region to region”.
Austrian geopolitical strategist Velina Tchakarova said US-EU relations were likely to see a positive turn. “We have reached a crossroads”, she said, adding that the bloc would have to change its methods because Europe was now among the losers. The big question, she said, was how Europeans could solve security issues while meeting challenges related to industry and climate change.
The governing parties have a comfortable lead, while more and more potential voters have been put off by Peter Magyar’s opposition Tisza Party over the past month, according to a Századvég December poll.
Among those who are certain or likely to vote, the Fidesz-Christian Democrat alliance had 40 percent support, followed by Tisza with 31 percent, the think-tank said on Friday.
The Two-Tailed Dog Party was in third place with 7 percent, while Our Homeland Movement was on 6 percent.
The Democratic Coalition, Momentum and Socialists were below the 5 percent threshold for entering parliament, while 7 percent were undecided.
Among decided voters, the Fidesz-led alliance had 42 percent support, while Tisza had 34 percent. The two parties definitely in contention for seats in parliament were on 7 percent, while 5 percent would vote for the Democratic Coalition (Momentum and Socialists have 3 and 1 percent support, respectively).
Szazadvégsaid that Magyar’sstanding had worsened due to incidents involving the politician and the ensuring negative press coverage in recent weeks, and he personally had a negative approval rating of minus 12 percent in November, while this fell to minus 18 percent the following month.
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Ukrainian and Serbian guest workers in Hungary should not be worried about the changes; however, Vietnamese, Indian, Kyrgyz, Kazakh, Montenegrin, Venezuelan, etc. employees will earn less if they raise children, are below 25, or get a tax benefit due to marriage.
New rules will decrease the salaries of many guest workers in Hungary
Regarding tax benefits, the Hungarian state is rather generous to families raising three or more children. On the other hand, allowances based on social status are much lower than in most European countries because the Hungarian government believes such financial help should only be given to those who work and, as a result, contribute to the country’s GDP increase.
Although the Hungarian government seemed committed to attracting guest workers to Hungary with several alleviations, a significant change is coming in 2025 thanks to the modification of tax laws in Hungary.
According to Telex, many guest workers will no longer be eligible for family tax benefits, lose the allowance for young couples in first marriage, and can no longer receive the tax benefits for employees under 25.
There are around 70 thousand unfilled positions in Hungary. Photo: depositphotos.com
The good news is that the modified tax rules do not apply to guest workers coming from neighbouring countries. Therefore, Ukrainians and Serbians should not be worried. However, all other citizens coming from non-EEA countries should be aware that their revenues may fall next year.
Three types of tax benefits will be unavailable
According to Telex, based on the LV. Law of 2024 about the change of several tax laws, from January, Vietnamese, Indian, Indonesian, Kyrgyz, Uzbek, Venezuelan, Montenegrin, Filipino, etc. workers may earn less. The reason is that they and all other 3rd-country nationals not coming from the neighbouring countries will no longer be eligible for family tax allowance, the allowance for young couples in first marriage, and the tax benefits for employees under 25.
Telex wrote that one of the biggest Hungarian HR companies informed its employees about the changes. That means all of them will have to pay 15% personal income tax and 18.5% social security contribution. The calculation is simple: your gross wage minus 33.5% will be your net salary paid in cash or transferred to your bank account.
This means that if a 3rd-country employee not from neighbouring countries like Ukraine or Serbia is employed for a HUF 450,000 (EUR 1,100) gross wage per month, he gets HUF 299,250 (EUR 731) even if he e.g. raises three or more kids.
Employees raising one kid will get HUF 10,000 (EUR 24) less, and that number increases to HUF 40,000 (EUR 98) in the case of two kids and HUF 99,000 (EUR 242) in the case of three kids. Young employees under 25 will receive 15% less (because they will have to pay personal income tax), while young couples in first marriage will get HUF 5,000 (EUR 12) less.
Stricter conditions to hire guest workers
Earlier this year, the Orbán cabinet introduced stricter rules concerning the employment of guest workers. First, employers punished with administrative or OSHA fines in the previous 12 months cannot hire a guest worker. Secondly, they cannot hire a guest worker from a third country if they were punished for illegally employing guest workers before. Finally, employers under compulsory liquidation, and forced strike-off cannot hire a guest worker. Moreover, if a Hungarian employer rejects to hire a Hungarian job seeker due to unsupported claims, they should expect sanctions.
According to Telex, employers believe those modifications did not prevent the growth of the number of Asian guest workers in Hungary. FM Péter Szijjártó talked about 128,000 workers from countries outside of the European Union in Hungary in October. Of course, the majority of them are Ukrainians and Serbians. Meanwhile, the number of unfilled positions stood at 71,000 then.
The increase in the number of guest workers flattened
Károly Radnai, the CEO of Andersen Adótanácsadó Ltd, agreed with the abolishment of the tax benefits for 3rd-country guest workers since the government’s aim is not to settle those employees. According to the latest data from the Hungarian Central Statistical Office (KSH), the number of guest workers in Hungary stagnated in the past few months. Telex or the KSH did not give a reason, but it is a fact that the Hungarian government is struggling with multiple structural problems, and GDP growth is expected to be extremely low this year.
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Output of Hungary’s industrial sector edged down 0.2pc in October, a detailed release of data by the Central Statistics Office (KSH) on Friday shows.
The detailed data show output of the automotive industry, Hungary’s biggest manufacturing sector, fell 3.9pc year-on-year in October. The segment accounted for 26pc of manufacturing output during the month.
Output of the computer, electronics and optical equipment segment, accounting for 11.0pc of manufacturing, rose 16.3pc. Output of the electrical equipment segment, which made up 9.4pc of manufacturing output, fell 16.9pc. Output of the food, drinks and tobacco segment, which made up 13pc of manufacturing sector output, climbed 2.7pc.
Adjusted for the number of workdays, headline output was down 3.1pc. In a month-on-month comparison, output was up 2.0pc, on a seasonally- and workday-adjusted basis.
According to Forbes, despite the Hungarian government’s allegations, the output of the Hungarian industry does not keep falling because of the struggling German economy but due to the malaise of the battery industry.
Construction sector output slips 0.5pc in October
Output of Hungary’s construction sector edged down 0.5pc year-on-year in October, data released by the Central Statistics Office (KSH) on Friday show. Output of the buildings segment fell 5.7pc but civil engineering output climbed 7.5pc. In absolute terms, construction sector output reached HUF 679bn in October. The buildings segment accounted for 57pc of the total.
In a month-on-month comparison, construction sector output rose 4.6pc, adjusted for seasonal and workday effects. Order stock was 31.8pc higher at the end of October than twelve months earlier. Buildings segment orders inched down 2.2pc but civil engineering orders jumped 66.0pc.
New orders dropped 44.2pc during the period. New orders in the buildings segment were down 34.5pc and new civil engineering orders fell 53.4pc. For the period January-October, construction sector output edged up 0.7pc from the same period a year earlier.
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The summer of 2018 was a crucial period not only for the Information Office, which is a branch of the secret service in charge of foreign intelligence, but also for the Hungarian political system. An unprecedented intelligence operation and power struggle took place, putting the relationship between the government and the intelligence services on a new level.
For a long time, the Information Office operated under the supervision of János Lázár, then head of the Prime Minister’s Office. According to Telex, during his years as the head of the Information Office, János Lázár paid considerable attention to intelligence activities related to the EU institutions. This practice did not only concern OLAF, but also other EU delegations and officials in Hungary. The Information Office’s increasing surveillance activities not only put the Hungarian intelligence services in a delicate position but also undermined trust within the EU.
This arrangement was terminated in 2018 when the fourth Orbán government was formed, and the Information Office was placed under the Ministry of Foreign Affairs and Trade, led by Péter Szijjártó. However, the handover process was not smooth and the situation quickly became tense.
Photo: Facebook/Szijjártó Péter
Szijjártó’s first step was to invite the heads of the Information Office, including István Pásztor, the director general of the office, to a meeting. At the same time, however, he received an unusual order from the security department of the Ministry of Foreign Affairs: a special 30-strong team was to be allowed into the Information Office, demanding full access to the archives.
The search for documents
The task force, made up of representatives from various departments of the Ministry of the Interior, spent weeks at the headquarters of the Information Office. The official purpose of their investigation was to conduct a comprehensive review of the functioning of the intelligence services, but in reality, they were interested in information on specific cases. These included the economic affairs of the Orbán family, in particular those of István Tiborcz, the prime minister’s son-in-law, and the public procurement scandal involving Elios Plc.
During the raid, prosecutors questioned staff, searched archives and confiscated computers. The dismissed managers were not allowed to return to their offices, and their personal belongings were not returned until later.
Photo: FB/Orbán
The raid was carried out by the forces supervised by the Minister of the Interior, Sándor Pintér, but the initiative may have been backed by Viktor Orbán’s circles. The aim was to find out what information the Information Office had collected in the previous years of the government, particularly on the affairs of the Orbán family. The events shed light on the internal power struggles between the different actors in the government.
OLAF monitoring and the Elios case
One of the most controversial areas of the Information Office’s work has been the monitoring of OLAF, the European Union’s anti-fraud office. Under the leadership of János Lázár, the Information Office actively monitored OLAF’s investigation in Hungary into procurement abuses by Elios Plc. OLAF staff were tapped by telephone, followed physically and even secretly recorded. The aim was to gain early access to information gathered by the EU body.
OLAF investigations eventually revealed irregularities in the Elios projects and recommended the recovery of HUF 13 billion (EUR 31 million) of EU funds. However, the Hungarian government covered this from the budget, thus avoiding direct financial responsibility.
The consequences
The events of 2018 highlighted the lack of transparency and political independence of the Hungarian intelligence services. The task force’s actions also raised legal questions, as the lack of official documentation could indicate illegal activity. According to Miklós Ligeti, legal director of Transparency International Hungary, the events raise suspicions of criminality in several respects.
The 2018 crackdown not only led to the replacement of the IH leadership but also to a complete reorganisation of the functioning and internal power relations of the Hungarian intelligence service. Viktor Orbán personally criticised the previous activities of the Information Office, and it became clear that the intelligence service was coming under tighter control of government interests.
Hungary’s Ministry of Interior is prepared to move to the Buda Castle and leave an astonishing Budapest palace behind at the Pest bridgehead of the Chain Bridge. According to Telex, the government would end the building’s protected status and sell it.
The Budapest palace building, in the heart of the city, is the neighbour of the well-known Four Seasons Hotel Gresham Palace, a favourite place of Hollywood stars to stayin the Hungarian capital.
According to Telex, the Hungarian Parliament’s Committee on Legislation revoked the building’s protected status on their Thursday session. According to the explanation of the bill, the state no longer requires the building to carry out public services. Therefore, its purchase is justifiable.
On the left, there is the Four Seasons Hotel Gresham Palace. How will the new owner use the building? Photo: Google Street View
Hungarian media: buyer on the horizon
The Interior Ministry has been using the building for decades. According to 24.hu, there is already a buyer for the beautiful building often referred to as the building of Mihály Pollack. Gergely Gulyás, the Minister of the Prime Minister’s Office, said in a press conference that they did not urge the ministry’s migration to the Buda Castle due to business reasons.
A former finance ministry building will host the interior ministry in the Buda Castle. The January staff meeting is already organised there, so they have no time to waste. The finance ministry currently operates in Pest but will move to the Buda Castle soon.
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“At Christmas at least, no one should die on the front line,” Prime Minister Viktor Orbán said in an interview to public radio on Friday, outlining his recent proposal to the warring Russian and Ukrainian sides regarding a ceasefire.
Orbánsaid that at Hungary’s initiative an offer was on the table, and the sides may also “agree on an exchange of prisoners of war at last, which would make hundreds of thousands of people happy”.
“One side has accepted the proposal while the other apparently rejects it, but still there are a few days until Christmas, so let’s hope that the situation can change,” the prime minister added.
“While we swim in international waters, the Hungarian pool is paramount; we must keep that tidy, first and foremost,” Orbán said. The 2025 budget is taking its final shape, giving an outlook for families and businesses for the next year, he added.
Orbán said Hungarian diplomacy had gone above and beyond to attempt to gain a “few days of a ceasefire” as was befitting “a thousand-year-old Christian European state”.
PM Orbán’s interview in the Kossuth Rádió. Photo: MTI
Orbán spoke with the Americans, the Russians, the Europeans, the Turks
The prime minister noted that he had spoken with “the Americans, the Russians, the Europeans, the Turks”, and he was positive that once Donald Trump took office the world would make an about-turn.
“We’re still in perilous times: the governments in Germany and France have failed and Syria, the biggest source of migration in the past decade, has seen it’s government toppled,” he said.
He added, however, that no longer would “we have to navigate stormy seas” and “calmer waters lie before us”.
Orbán said it would only take “a day or two after January 20” for the about-turn to take place, because “the new administration in America will get off to a flying start”, and the changes would soon reach Europe on issues “that are also most important to us”.
Romania, Bulgaria Schengen Zone membership “fantastic achievement”
The prime minister called Romania and Bulgaria’s accession to the Schengen zone a “fantastic” achievement, adding that Romania’s accession had been long awaited by ethnic Hungarians and was “a crucial step for the unity of the Hungarian nation”. In the interview, Orbán said this achievement was owing to the efforts of interior minister Sándor Pintér and European affairs minister János Bóka.
Ártánd, the border crossing between Hungary and Romania. Photo: MTI/Czeglédi Zsolt
Orbán said big European countries had blocked their accession, and removing the obstacle had been “no small diplomatic feat”.
He added that Hungarians in Transylvania had looked forward to Schengen accession for a long time, and now they could travel without barriers in the way.
Romanians, too, had wanted it, so a “sunny afternoon” had emerged in the history of stormy Romanian-Hungarian relations. He added that Romania “knows this and has been constructive”.
After a transitional period, “we can remove our police” from the Romanian-Hungarian border, he said, adding that the would relieve law enforcement of staffing problems.
Attempt to involve Hungary in the Syrian conflict
Meanwhile, Orbán said an attempt had been made to “involve Hungary in a hot conflict” by concocting and spreading a story that would put Hungary in the cross hairs. He told public radio that the “fake news” regarding Syrian President Assad’s appearance in Budapest had been “the most important event of the week” and the most “painful”.
Orbán noted that during the first phase of the Syrian civil war around 2015, a massive migration and terror wave “swept through Europe” and hundreds of people had died in Europe.
“So what’s going on in Syria and its impact on Europe is not … a joke or fake news that can be spread; this could get bloody,” he said.
The prime minister said “someone wants to involve Hungary in a hot conflict … and make Hungary a target.” He added that someone was hunting Assad and whoever claimed that Assad was in Hungary had wanted to make the country a “hunting ground”.
“Who’s behind this? Who came up with this? For what purpose? Who from Hungary were involved? Through whom was this hoax spread? What did they want to achieve?” he asked.
UPDATE: Orbán says all troubles are rooted in the war
Concerning Hungary’s 2025 budget, Orbán said “the key word is war … all troubles of the European economy are rooted in the war [in Ukraine],” adding that “if we want to cure the European economy, Hungary’s included, we must start by putting an end to the war.”
He said parliament had set the date for adopting the budget to December because “the US election has provided an answer to the question whether 2025 should call for a war or a peace budget.”
A turnaround will happen and “the 2025 budget should be based on that turnaround,” he said. “So far, we have had war years, and now … years of peace will come; the goal is to make the Hungarian economy strong again,” Orbán said.
For Hungarian families, he said, this meant that “in 2025, we can start on an upward path”. “We’ll have a fantastic year ahead.”
Once “the ominous cloud of war” disappears, he added, life would change and “efforts will become more meaningful; the budget is built on that fact of psychology,” the prime minister said.
He said the government expected an economic growth of above 3 percent “in the first peace year after the war” and planned “a number of measures to lift the country”.
Firm financial foundations for economic growth
He noted the recent three-year agreement with trade unions and employers aiming at ensuring a 40 percent pay rise, “the largest in Europe in recent decades”. He also noted a significant hike for teachers in 2024, which he said would continue next year, as well as higher wages for water management staff and for the judiciary.
The prime minister added, however, that wages were “still unfair” in certain sectors, but he pledged to provide a remedy in the next three years. “Now we can see the light at the end of the tunnel; once the war is over, everybody will see that their efforts have a point … and their work is profitable,” he said.
Referring to a credit rating agency’s recent decision to revise Hungary’s rating from negative to stable, Orbán said this meant that “rating agencies are saying that Hungary’s economic plans for 2025 have firm financial foundations.” He said some agencies had more positive views and others were “more restrained”, but “the carpet is hovering … it will fly”.
Hungary will complete 500 new investment projects next year and start 300 new ones, with BMW and China’s BYD car plants, as well as several large battery makers starting production, Orbán said, adding that “all this reflects that the government’s hopes for economic growth really have firm financial and economic foundations.”
Meanwhile, in connection with the murder of a boy 24 years ago, details of which have recently come to light, Orbán said a lesson from case was that “a missing child must be searched for and you should never give up.” He said, however, that the police had done a “fantastic” job; they “never gave up, they did not shut the case down, and they take their job of fighting crime seriously.”
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Interior Minister Sándor Pintér highlighted the importance of the protection of the external borders of the European Union and of in-depth controls within the bloc, at a press conference held after a meeting of the Justice and Home Affairs Council (JHA) in Brussels on Thursday.
At a press conference held on Thursday evening together with Magnus Brunner, the commissioner for internal affairs and migration, Pintér said that it was of “historic” importance that the Schengen integration process of Bulgaria and Romania had been completed, “after negotiations spanning almost a decade”.
Their integration into the Schengen Area was the most important achievement of the Hungarian EU presidency, he said.
After the decision, the meeting reviewed the inter-operability of IT systems with the Schengen Area’s associated members, especially in view of a planned border registration system, Pintér said.
Photo: MTI
Although the full-scale introduction of the automatic IT system for registering the border crossings of third country citizens is being delayed, the JHA reiterated its commitment to set up a schedule to minimise the damage caused, he said. “The goal is to finish [work on] interoperability by 2027.”
The council also pledged to reinforce Greece’s borders with Türkiye and Bulgaria, as well as the stretch between Bulgaria and Türkiye. The latter will receive a contingent of over 100 Hungarian, Romanian and Austrian troops, he added.
Besides border protection, controls will be strengthened within the EU too. Hungary will maintain “secondary border control” on its Romanian border until June 30, just as Austria does on its Hungarian border, he added.
Fake asylum seekers have no place in Hungary, the interior minister said
Asked whether Hungary could request to suspend granting asylum requests similarly to other EU member states, Pintér noted that Hungary has no joint borders with Belarus or Russia as Poland and other countries do, that pointed to a threat of hybrid warfare.
Meanwhile, Hungary’s borders remain open to Ukrainian refugees, he said. “Those coming from other countries on the old Silk Road will continue to be turned away, and if they do get in, there is no way they will be granted asylum without unequivocal proof of persecution,” Pintér said.
“We accept real refugees, but fake asylum seekers have no place in Hungary,” he said.
The ministers also tabled legislation proposal on the fight against the sexual abuse of children, “but we couldn’t achieve results there. I hope that the Polish presidency will be more successful on that topic, as it is about our future, our children,” he said.
The councilalso discussed opportunities for cooperation with third countries on migration challenges, he said. They also reviewed semi-annual reports of European security and intelligence agencies, including that of the Hungarian anti-terrorism and constitutional protection offices, he said.
They then adopted strategic directives, and the council’s priorities in domestic and judicial cooperation in the new cycle, “an outstanding achievement for the Hungarian presidency and the council itself, as it was the first such document adopted in a decade,” he said.
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Cooperation between Hungary and Turkiye is better and more mutually beneficial than ever, and the two countries have also outlined a new “milestone” target for the coming years, Péter Szijjártó, the minister of foreign affairs and trade, said in Ankara on Thursday.
Hungary–Turkiye cooperation
Prime Minister Viktor Orbán had talks with President Recep Tayyip Erdogan today as part of the Hungarian peace mission, “which is especially important as the only really successful attempt at mediation in the war in Ukraine in the past thousand days is connected to Turkiye,” Szijjártó said, according to a ministry statement.
“Hungary has stuck to the same stance for a thousand days. It has become certain that there is no solution on the battlefield, that a settlement is possible only at the negotiating table, and that we need a ceasefire and peace talks as soon as possible,” he said.
At the meeting, they welcomed the unprecedented heights of bilateral cooperation which, he said, benefited both countries.
Meanwhile, the two countries reached a “strategic milestone” this year, when Hungary became the first non-neighbouring country to which Turkiye exports natural gas, Szijjártó said, adding that Hungary has already bought 275 million cubic meters.
“Today, we agreed to maintain that cooperation, and Hungary will receive natural gas next year too,” he said.
Turkiye and Hungary have also outlined a new milestone, to be achieved in the coming years, he said. “An agreement was made under which the leading oil companies of Hungary and Turkiye, MOL and TPAO, will start a new strategic cooperation that will enable MOL to be involved in exploring and tap new oil fields in Turkiye and also open an opportunity to the Turkish oil company to enter the Hungarian market,” he said.
“This is the new strategic goal we must achieve in the coming years,” he said.
Meanwhile, bilateral trade has hit new records, he said. “Cooperation also extends to new sectors, with cooperation between banks and in railway construction also on the list.”
Regarding energy security, Szijjártó said Turkiye was an important contributor to securing Hungary’s natural gas supply.
“More than 7 billion cubic meters of gas has arrived in Hungary through the Turkish Stream pipeline via Turkiye. This is a good deal more than the total [deliveries] last year. This year has shown that the Turkish Stream pipeline is capable of delivering more than 20 million cubic meters a day, which is good news regarding the energy security of the coming period,” he said.
Turkiye and Hungary also agreed on coordinating the measures they will have to take due to the US’s decision to put Russia’s Gazprombank on the sanctions list, Szijjártó said.
“Cooperation between Hungary and Turkiye continues to be very beneficial … and in view of current processes and trends, we can say that next year, Hungary will profit from it even more; and so will Turkiye,” he said.
Raising support for families and strengthening businesses are the most important goals of next year’s budget, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on Thursday.
Supporting families, strengthening businesses
Gulyás said the government’s budget bill contained additional resources for all important areas. Lawmakers are set to take the final vote on the bill on Friday, December 20, he added.
Tax allowances for families raising children will double over a year, while the Demján Sándor Programme will make HUF 1,400bn available for scaling up SMEs, he said. The 2025 budget ensures the resources necessary to maintain the system of regulated prices for household utilities, while it will raise the value of pensions, adjusted for inflation, and guarantee the country’s physical security, primarily against illegal migration, he added.
He said HUF 3,750bn was earmarked for family support, HUF 3,717bn for healthcare and HUF 3,876bn for education. The 3.7pc-of-GDP deficit target is realistic, he added, auguring a reduction of the gap to under 3pc in 2026.
The government has decided to raise the age threshold for taking out subsidised prenatal baby loans from 30 to 35 years, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on Thursday.
Raised age threshold for prenatal baby credit
Gulyás said the modification of the age threshold — which applies to the wife of the couple applying for the credit — was made on the recommendation of the Young Families Club (Ficsak) and other family organisations. Borrowers availing of the new threshold have five years to have their first child to maintain eligibility, he added.
