In Hungary today, 500,000 people earn income for their families in jobs related to the automotive industry. After the European Union decided that from 2035, Hungarian car factories cannot produce in their current form, so their fate will be either closure or technology development. If there is a battery factory next to the Hungarian car factories, they can escape, if not, they will be closed. It is in Hungary’s interest to save these machine industry capacities by complying with the strictest environmental regulations and by answering the questions and doubts that arise – the Prime Minister emphasizes.
Real wage increase
According to our hopes, in 2024-25 we will see real wage growth again, that is, wages will grow faster than prices – says the Prime Minister in response to a question from a member of parliament.
No more chocolate
There will not be a moment when the social security system ends and a similar form of support does not take its place, says Orbán regarding the transformation of family benefits. He points out that chocolate will end in the cities from January, but the government will work out the details of its continuation by then.
Hundreds of thousands of guest workers?
In Hungary, there is a clear rule that you can only bring in as many guest workers as there are open positions – replies Viktor Orbán to comments from representatives. According to him, there is no need to change this, it is a good rule.
Hungary could easily meet this year’s budget deficit target if Brussels did not harass us
– says the prime minister. According to him, they owe us 3 billion euros this year, while we fulfilled our payment obligation of one billion. He emphasizes that the arrival of this money due to us will “smooth out the budget”.
The government’s official deficit target for this year’s GDP ratio is 3.9%, but it has now admitted that this is not sustainable, the deficit could creep up to close to 6%, all the more so because the economic policy does not really bother to take further adjustment steps. (See our interview about this here.) At the same time, the prime minister’s argument is incomprehensible. The official deficit target is accrual-based, which means that as long as the Hungarian state has a claim against the EU, it will be increased by the revenues accounted for in the budget, regardless of whether it arrives or is delayed. In other words, the reduction of the deficit is not the result of politics around EU resources.
According to Orbán, a discussion is expected in the autumn about whether Brussels expects additional payments from us in the meantime.
In autumn, Hungary’s enemies will make their demands simultaneously
– says the Prime Minister. He adds that the Soros interests, Brussels diplomats and American Democrats also want to force us to make decisions that suit their own interests.
Hungary does not belong to the club of jawohl countries, which only say jawohl when they receive a phone call from Brussels
– states Orbán.
Another battle is taking place between Hungary and Brussels, demands have been nailed to us, for example, that we dismantle the energy subsidy systems by the end of 2023, the interest rate caps, and the decreasing foreign capital threaten our opportunities for innovation.
It will be difficult, we are facing a period when the conflict with Brussels can only be fought in open discussions and with the full support of the Hungarian people
– highlights Orbán in response to this.
According to the Prime Minister, we do not accept that Brussels decides how much the Hungarian people should pay for utilities, we cannot allow special taxes to be abolished.
The EU’s demand for the cancellation of the overhead reduction is an old topos of government communication, the effort to frame the overhead reduction as something that should be protected against the EU can be felt. But this is actually very simplistic. In the spring package of the European Semester referred to, there is no mention that the Hungarian overhead reduction should be specifically abolished. The Commission made the general recommendation for all member states that it would be worthwhile for all EU member states to moderate subsidy activity by the end of 2023 (also in view of the drop in prices), and that the need-based principle should be strengthened in the subsidy system, and targeted subsidies would be needed, which they also encourage energy conservation.This recommendation is therefore not specific to Hungary, practically all countries received it, and it is not aimed at abolishing the subsidy, but at transforming it:“All Member States should wind down the energy support measures in force by the end of 2023. Should renewed energy price increases necessitate support measures, these should be targeted at protecting vulnerable households and firms, fiscally affordable, and preserve incentives for energy savings.” (Q&A on the 2023 European Semester Spring Package (europa.eu)) In addition, the committee’s material has softened further, the version adopted by the Council (and legally valid) no longer speaks of the end of 2023, but of the period 2023-24 (“as soon as possible in 2023 and 2024”). It is also worth noting that, if it wanted to, the government could presumably prove in Brussels that the Hungarian overhead system is not far from enforcing the aspects considered desirable by the EU.
Obviously, the interest rate cap cannot stay with us forever, but the time has not yet come for its withdrawal, Brussels cannot demand that either, he says. According to him, the opposite should be done:
There can be no talk of austerity, families must be protected, the national debt must be reduced, pensioners must be given an increase in line with inflation in November. In addition, wages and prices must be brought into balance by the end of the year, so that real wages do not decrease at least on an annual basis.
The Hungarian government will not fulfill the request of the Ukrainian government in the autumn either, we will not force anyone back to Ukraine – says Orbán. According to him, the debate on migration between the Hungarian government and the European Commission will continue and deepen in the fall. He points out that the new migration pact adopted in the summer, which was adopted without Hungary and Poland, has now failed.
Hungary is ready to take on a stronger role in crisis zones, but there will be no migrant quota in Hungary, says the Prime Minister.
We also had to solve another problem of the central bank, we have to save the central bank from its predicament with a law amendment – says Orbán about the MNB’s loss and capital compensation. He points out that in the summer, retail investors had to be encouraged to buy government securities, which is beneficial for everyone.
Inflation is usually not the goal of governments, but of central banks, but inflation in Hungary has risen to such a level that
the central bank cannot cope, so we took the matter into our own hands and took our own measures.
He added that if the traders cannot stop the rise in fuel prices, the government is ready to intervene again.
We do not support Ukraine in anything
We will not support Ukraine in international life on any issue until it restores the laws that previously guaranteed the rights of Hungarian minorities – says the Prime Minister.
During the summer, a serious conflict arose between Hungary and the Brussels bureaucrats due to grain dumping from Ukraine, says the prime minister.
Let’s say it straight: we were deceived
– he states. According to him, contrary to promises, the Ukrainian grain was not taken to Africa, but sold here, thus displacing the Hungarian producers.
We managed to get a European import ban to come into effect, but this was lifted in September, so together with Poland and Slovakia, we ordered an import ban for 23 agricultural products from Ukraine. Since then, the dispute has expanded, worsened and has been brought before the WTO. We still expect Brussels to stand up for the Central European countries and not to betray Hungary either – adds Orbán.
We continue to maintain Hungary’s energy security, which is why we signed energy cooperation agreements with Turkey, Azerbaijan and Qatar in the summer.
Brussels has decided to disconnect Europe from Russian energy sources. In my view, this is against the interests of the continent and Hungary, but we currently do not have the strength to prevent this
– says Orbán. He adds: we raised our friendly relations with Central Asia to a strategic level well in advance, so the war and the blowing up of the Nord Stream pipeline did not present us with an unsolved task in terms of the country’s energy security.
The government has done its homework, filled up the gas storages, currently there is an amount of raw material in the storages corresponding to 60 percent of the annual consumption, he points out. With the construction of Paks II, the extension of the operating hours of Paks I, solar energy and the deployment of backup power plants
we make Hungary independent. It is no exaggeration that Hungary belongs to the club of climate champions.
We successfully organized the biggest sports event in Hungary’s history, the World Althetics Championship in Budapest – begins the Prime Minister’s speech. After that, he lists the results of the World Cup, highlights that the event generated income for the economy that exceeded the expenditure twice.
Soon, Viktor Orbán will speak live about the “challenges and tasks” ahead of us
The plenary session of the Parliament begins at one o’clock in the afternoon, which will be opened by Viktor Orbán with his speech before the agenda. The title of the Prime Minister’s speech: “On the challenges and tasks facing Hungary”, can be read on the parliament’s website. The Prime Minister can touch on several important economic issues, so it can be discussed, for example:
- The state of the budget, the current deficit target and growth forecast
- the structure of the possible adjustments, the possible increase of the bank tax, for example,
- the fate of EU funds,
- Sweden’s accession to NATO,
- the planned new family support system,
- the expected development of inflation.
Portfolio reports live on the Prime Minister’s speech and possible market reactions in the early afternoon.
Cover image source: MTI Photo/Prime Minister’s Press Office/Zoltán Fischer