Gergely Gulyás, the Minister heading the Prime Minister’s Office
The government will set up a “Public Expenditure Review Task Force” at the request of the European Commission and following country-specific recommendations, the Finance Ministry announced. According to their statement, “the government’s position remains firm that we will not accede to any request from Brussels to abolish Hungarian family benefits and the cuts in the rationing of public utility bills.” The topic was also discussed at the Government Info meeting Thursday morning.
In May, the European Commission called on Hungary to further strengthen its fiscal balance and asked it to end the energy support measures in force by the end of 2023, i.e. the utility bills cuts. “We firmly reject Brussels’ desire for austerity and the abolition of the cuts,” the Finance Ministry stated.
The ministry stressed that
the cuts in overheads, family benefits, and pensioners’ protection are provided for in this year’s and next year’s budgets, and the government is not willing to give them up at the EU’s request.
They said that Hungary is unique in that the government has been able to reduce the deficit in the last three election years. The government will also preserve the country’s financial stability and balance, so the Finance Ministry expects a deficit target of 2.9 percent of GDP in 2024, and a reduction in public debt to 66.7 percent.
The European Commission recently came up with a plan for Member States to increase their contributions with billions of euros to the common budget.
This money would be used to finance aid to Ukraine, manage migration, and increase the salaries in Brussels. The Hungarian government has rejected the idea from the start, along with other Member States such as Austria or Germany, saying that the EU should first account for where the money from the 2021-2027 budget has gone.
Prime Minister Viktor Orbán criticized the plan to increase EU contributions, saying that the European Union wants the government to abolish the utility bill cuts in order to have a few billion euros left over to increase salaries in Brussels.
Gergely Gulyás, the Minister heading the Prime Minister’s Office, said at the Government Info meeting that
Hungary will review certain expenditures at the request of Brussels, but there is no chance of reducing family benefits or abolishing the reduction in utility bills.
He added that Brussels could not impose any binding requirements when reviewing the Hungarian expenditure which would justify a reduction in the amounts spent in these areas.
The minister noted that Brussels has asked Member States to pay an additional €98.5 billion, which is fifteen times the total annual Hungarian personal income tax contributions, roughly the total amount of the annual Hungarian state budget. He said that the amount is so huge that not even Austria or Germany want to take on the burden in this form. He also pointed out that the EU budget amendment requires unanimity, so there is no realistic chance of the planned amendment being adopted.
Featured photo via MTI/Máthé Zoltán