Hungarian government agrees with the Germans: Israel doing the ‘dirty work’ for all of us

As regards the conflict between Israel and Iran, Gergely Gulyás, the head of the Prime Minister’s Office, quoted the German chancellor who said after the recent G7 summit that Israel was “doing the dirty work for all of us”.

Referendum on Ukraine’s EU accession

Voter interest in the government’s Vote 2025 referendum on Ukraine’s European Union accession is “unprecedentedly high”, with more then 2 million people having returned their questionnaires, Gulyás said on Wednesday, noting that the vote runs until midnight on Friday.

With the referendum coming to a close, Prime Minister Viktor Orbán will be able to represent a national position at next week’s EU summit that reflects its outcome, Gulyás told a regular government press briefing.

He said the Vote 2025 ballot would have the highest or second highest response rate of all National Consultation public surveys so far, adding that the response rate was also twice as high as in the opposition Tisza Party’s survey on the topic earlier this year.

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Gulyás underscored the importance of the vote, saying that the matter of whether the EU would suspend all existing regulations to force Ukraine into the bloc would have a fundamental impact on Hungary’s future.

He said the opposition Democratic Coalition (DK) and Tisza Party were “pro-Ukrainian parties” that backed Ukraine’s EU entry.

Hungarian voters vs foreign party elites

Gulyás said that despite Tisza MEP Zoltan Tarr and DK having called the vote “pointless”, the government believed that voters should be the ones to decide on this issue. He said Tisza and DK were not expected to express any other position on the matter because “unlimited support for Ukraine” was a requirement for membership in “their parent parties, the Socialists and Democrats and the European People’s Party, respectively”.

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The Hungarian government believes that it should be the Hungarian voters, rather than “foreign party elites” that decide on this issue, Gulyás said. Hungarians have until midnight on Friday to mail back the questionnaires or vote online, he said, adding that the result would be published as soon as possible.

Biased country report

Meanwhile, Gulyás said the European Commission’s latest country report for Hungary was “biased”. He said the government had discussed the report at a cabinet meeting and concluded that the recommendations made by the EC were “unacceptable”.

He pointed to positive conclusions and recommendations made by the EC, such as one to end an excessive deficit procedure against the country, and an acknowledgment of the government’s family-friendly measures. But he said some recommendations were against the interests of Hungary, such as ones on phasing out taxes levied on multinationals, the regulated utilities price scheme for households, the rate freeze for retail borrowers and caps on markups for some food and non-food products.

All of these measures, he said, had been introduced in the interests of Hungarians and contributed to utility costs being the lowest in Europe and in multinationals “shouldering their share of the burdens”. They also enable families to pay back their loans despite the increased interest rates and contribute to reducing inflation, he added.

Energy and Russia

He added that the EC’s recommendation on independence from Russian energy was also “unacceptable”. Gulyás said the world was realising the effect of the Israel-Iran war on energy prices, adding that the EC proposal to ban Russian energy imports posed a “serious risk” for Europe and was a matter of energy security for central Europe.

Gulyás said it was also “unacceptable” that the EC was trying to “disguise” sanctions as a trade policy decision that does not require unanimous approval and therefore cannot be vetoed by Hungary or Slovakia. The Hungarian government believes diversification is important but warned against going from “unilateral dependence on one supplier to another”. It would be best if Europe traded with everyone accepted the cheapest offer when it came to energy supply.

Pressure from Brussels to end profit caps

On another subject, Gulyás said Hungary’s government would resist pressure from Brussels and defend the mandatory markup caps. Commenting on the EC’s decision on Wednesday to launch infringement procedures against Hungary over the markup caps, Gulyás said it appeared that supporting Ukraine and the profits of multinationals were what was important for Brussels. The Hungarian government must represent the interests of Hungarians and local businesses, he added.

Meanwhile, he announced that the government has decided to extend a rate freeze on retail credit for another six months. Gulyás said the rate freeze, which was set to expire on June 30, affected around 286,000 loans with a value of 1,200 billion forints (EUR 3.0bn). Phasing out the rate freeze now would raise installments by close to 15 percent, on average, he added.

Gulyás said the government acknowledged lenders’ opposition to the measure and their case brought before the Constitutional Court. He added that the measure would cost banks around 55 billion forints in 2025 and 50 billion in 2026, but highlighted the importance of keeping repayments predictable in the long term.

Israel is doing the dirty work for all of us

As regards the conflict between Israel and Iran, Gulyás quoted the German chancellor who said after the recent G7 summit that Israel was “doing the dirty work for all of us”. Hungary, he said, did not have the military might to strike targets thousands of kilometres away, noting that under the constitution, Hungary was committed to peace.

Gulyás said the Hungarian government believes Israel has a right to defend itself, adding that they also opposed to other countries besides the current nuclear powers obtaining nuclear weapons. At the same time, he added, the best thing for Hungary, Israel and the entire world would be if the war ended quickly.

Asked how many Hungarians had asked for help to get home because of the Israel-Iran conflict, Gulyás said close to 800 people had registered for consular protection.

Family support, taxes, food vouchers for pensioners

Concerning next year’s state budget, Gulyás said the government would be able to take significant steps regarding family support measures from the second half of the year, mentioning the increase in family tax benefits and personal income tax exemptions for mothers as examples.

Asked about the markup caps, Gulyás said it appeared to be the best and most effective way of tackling inflation, adding that until inflation was a threat, the markup caps had to be kept in place.

He said that for now there was no talk of an EU fine over the measure, adding that Hungary has been asked to respond to the EU’s letters of formal notice, after which Brussels will decide whether or not it would sue Hungary over the matter.

He said rising inflation was caused by modest increases in the prices of products not covered by the market caps as well as by seasonal effects, adding that the government would have to wait a month to see whether it has to intervene.

Meanwhile, Gulyás said pensioners were likely to receive their food vouchers by no later than early September.

He said the government was sticking to and would meet all of its goals, including doubling family tax breaks, introducing personal income tax exemptions for mothers and giving VAT rebates to pensioners.

He also said the government could not afford not to talk about “a threat such as Ukraine’s EU accession”.

Gulyás said the government was “fighting” to thwart Brussels’s plans to wean the EU off Russian fossil fuels.

Under the EU treaty, defining the energy mix of a member state is a national competence, he said, adding that “‘we will decide; it is no business of the EU”.

He also added that “Hungary will have an answer” should the European Council adopt those plans. Asked if the Hungarian government would turn to the Court of Justice of the EU, Gulyás said the body was “not fair and impartial” but one “applying EU powers to the detriment of members’ powers”.

According to Gulyás, the only facility the EC could resort to in the case of Hungary’s non-compliance with such a measure would be to launch another infringement procedure.

Gulyás would discuss Budapest budget with Mayor Karácsony

Meanwhile, Gulyás said a recent non-binding decision concerning Budapest’s solidarity tax payment was “legally mistaken”, adding that the government should appeal the ruling. He said he saw no argument under which “the obligation to pay the tax or its amount could be questioned”. He added, however, that the central budget had refunded 10.2 billion forints to the city earlier in the day because “the government honours court rulings”.

Gulyás said he would meet Gergely Karacsony, the mayor of Budapest, to discuss municipal finances on Thursday.

“Budapest’s operations are not subject to party politics and cannot be a victim of a novel leadership under a Karacsony-Tisza coalition or of political conflicts … Budapest must stay operational and Budapest must be managed,” he said, adding that “we will gladly help the capital.”

Karacsony has agreed to a government vetting of all municipally-owned companies, Gulyás said, and quoted the mayor as saying that he had “nothing to hide”.

Budapest Pride

Asked if the government saw it as a “loss of prestige” if Budapest Pride were still to be held on June 28 dubbed as Freedom Festival, Gulyas said he did not see it as an issue of prestige.

“If you saw what happened at the Pride march in Vienna … it is difficult to say that it is not harmful for the physical, spiritual, and moral development of children,” Gulyas said.

“People half or stark naked, with makeup and wings who go skipping along Vienna’s Ring are expressing an opinion but the right to that expression is secondary to … the rights of children,” Gulyás said.

He insisted that the city of Budapest “is trying to play tricks” and “pretend that the [Pride] event is not governed by the law on assembly”. But he said the situation was “clear” and “there is no serious lawyer that would not say the opposite”.

Gulyás was asked about possible consequences for participants in the Pride march and said that “for the time being we cannot speak about consequences because the city notified the police about the event as if it was not subject to the assembly law”. He said “the police could acknowledge or ban the event” and in the latter case “they can turn to the courts”.

On the subject of air conditioning in hospitals, Gulyas said it was crucial to have it in operating theatres, in intensive care units and cardiology departments, adding that while 10 years ago only 60 percent of such facilities had AC, now that ratio was up at 96 percent. He also added that this year alone the government has spent 4 billion forints on installing the apparatus in hospitals.