Hungarian government to postpone €1.73 billion worth of investments due to poor state of budget

The last government briefing prior to this week was held on 16 February. Although the government has obviously continued to meet regularly in the meantime, the break was partly necessitated by the health of the Minister of the Prime Minister’s Office, Gergely Gulyás who was in so much pain on 16 February that he had to receive an injection. Since then, he has undergone spinal surgery, after which he has had to practically learn to walk again.

Meanwhile, the former Government Spokesperson Alexandra Szentkirályi, who is focusing on her campaign for mayor of Budapest, is no longer at Gulyás' side, as she has been replaced by Fidesz MP Eszter Vitályos in the position – at the personal request of PM Viktor Orbán. Thursday was thus the first time Vitályos has attended a government briefing in this capacity.

Gulyás and Vitályos were joined by Finance Minister Mihály Varga and Minister of Agriculture István Nagy, their presence foreshadowing that most of the subjects discussed would have to do with finances and the agriculture.

EU Migration and Asylum Pact “stunningly bad”

Gergely Gulyás began by commenting on the Migration and Asylum Pact, adopted in the European Parliament on Wednesday. He said that the government considers the draft to be a stunningly bad one and can only agree with Polish Prime Minister Donald Tusk who said he would not support any form of relocation. Gulyás said that they do not intend to accept any solution in Central Europe that would make accepting migrants mandatory, and therefore they do not wish to implement it. He added that they are going to oppose all decisions on this.

Answering a question on this later on, Gulyás reiterated that they would not agree to implementing the pact and said that it should be examined whether the European Union acted within its own competence when adopting it. He also indicated that the Hungarian government might turn to blocking the adoption of the budget, which requires unanimity.

Mihály Varga: HUF 675 billions worth of investments to be postponed

Minister of Finance Mihály Varga began by explaining that the Hungarian economy is one of the most open economies in the world, which means that we import and export a lot, but produce relatively little for ourselves. This means that we are very dependent on exports and on economies that purchase Hungarian goods and services. According to Varga, the Hungarian economy is in bad shape because our export partners are also struggling.

He reiterated that they expect the country's economy to grow this year, and they currently expect this growth to reach 2.5 percent, while their prognosis for next year is a 4.1 percent growth.

This year's budget predicts a 4.5 percent deficit, he said, adding that spending has been very high as a result of the utility cost subsidies and the increased expenditure on interest rates. Due to the poor fiscal situation

675 billion forints’ (€1.73 billion) worth of investments are being postponed for the next period.

Portfolio recently reported that the budget had a deficit of 617 billion forints in March. The aggregate deficit for the first quarter of the year is HUF 2,321 billion, which is more than 92 percent of the deficit planned last spring.

Varga said that in spite of this, there is a lot of investment going on in Hungary currently. He did not disclose which investments were being postponed.

EU-related funds

Answering a question about the joint EU loan, he said: Hungary participated in it as a guarantor, but for the time being has only received an advance of the money and the appropriate conclusions will be drawn from this.

According to Mihály Varga, the budget will not be affected by how long the European Commission withholds EU funds from Hungary. He said that the payments have already started and they expect them to continue flowing in from now on, as well as that more than 500 billion forints have already been received in recent months.

István Nagy: Brussels has betrayed Hungarian farmers, but the government is going to help them

The Minister of Agriculture said that European agriculture has never been under such green ideological pressure as in the recent past, and called the green deal a dictate without professional basis, which has made European farmers lose their competitiveness and their vision of the future.

The Russia-Ukraine war has also created serious challenges, with Ukrainian products entering the EU market in huge quantities due to duty-free access. In his opinion it was this situation, coupled with other global factors, that contributed to low producer prices across Europe and has led to a serious oversupply in the market.

In addition, the burden on farmers is higher than ever before, which makes it clear that

Brussels has betrayed Hungarian farmers and is supporting Ukrainian oligarchs instead.

In difficult situations, the Hungarian government has always acted in the interests of the farmers who have in turn continued to ensure the country's food supply even in difficult years, Nagy stressed. Due to all of the above, the government's role in the sector is increasingly important, which is why a five-point package is going to be announced.

Answering a question from the press, Nagy that they expect there to be legal action from the EU relating to the import ban on Ukrainian grain, but they intend to do everything they can to stand up for the interests of Hungarian farmers nevertheless. Asked whether they want to form alliances with other countries on this subject, he said that in the end it always turns out that Hungary can only count on itself.

Hungarian-US relations

In response to a question from Telex, Varga said that the two leading US presidential candidates have different attitudes towards the war in Ukraine, and the Hungarian government must take this into account, just as it does with the statements that increase the threat of war.

According to the minister, Hungarian-American economic relations underwent significant growth under Trump, which is why they are not worried about a potential change in the American presidency. Varga added that in his view, Trump is seeking a bilateral balance, but the administration that followed him has for example canceled the double taxation agreement, which was detrimental.

When asked how long Hungary can maintain its pro-peace stance, Gulyás said that hopefully until peace returns, and stressed that the presidential elections in the United States are going to be a watershed in this. If the US leadership decides that the war should end, then the attitude on this issue might change.

Bolsonaro

In response to a question from the press, Gulyás said that former Brasilian president Jair Bolsonaro spending two days at the Hungarian Embassy in Brasilia does not violate any international laws. In his opinion, those interested in the subject should read Bolsonaro's statement about it.