Hungary will not accept more than 15% EU budget cut, minister says

This means the cabinet minister hopes to come away with cuts less than the 24% in real terms Hungary is anticipating. Meanwhile, according to a report by Index, he also said "we cannot accept a budget in which funds allocated to Hungary are decreased," which appears to hint that Hungary will veto any EU budget proposal in case its funding its diminished in any way.

Ambiguous statements aside, the words of Gulyás reveal that the Hungarian government does not expect the European Council to reach a decision on the main points of the 2021-2027 budget during the Finnish presidency in the second half of the year. The Council has recently urged leaders of member states to reach an agreement this autumn, as the lengthy legislation could mean individual member states will be unable to launch development programmes at the beginning of 2021 and tens of thousands of projects could be delayed.

Gulyás had been the first government official to say that it would not be a tragedy if the new budget was to be passed only in the second half of 2020. This also coincides with the most probable scenario anticipated by Portfolio, namely that the final agreement will only be reached during the German presidency in the second half of 2020, under the guidance of the biggest net contributor.

Such a late deal holds little promise to Hungary after its government has received sharp criticism from Germany. It would also lead to a shortage of funding between 2020 and 2022 as Hungary will use most of the funding available in the current cycle by 2020 and the next cycle will not take off in earnest before 2022. All this could have an impact on economic performance in 2021 and 2022.

Further points made by Gulyás at the hearing included:

• It was partly an act of solidarity with Poland when Prime Minister Viktor Orbán vetoed the EU's 2050 climate neutrality strategy at last week's summit. Also, there is already a unified strategy throught 2030.
• Regarding the Brexit, the government of Hungary does not expect the October 31 target date for leaving to be postponed, which means there is a good chance the UK will leave the EU with no deal. According to Gulyás, the government is prepared for such a scenario and could soften the blow of a hard Brexit as early as tomorrow if required.
• "We owe the European Union nothing," Guulyás said when asked about EU funding. In his view, Hungary undertook to compete with stronger economies when it joined in 2004, receiving cohesion funds in return. Also, the 10 countries joining in 2004 received considerably less funding than those joining in the eighties such as Greece, Spain or Portugal.
• As long as there is no full agreement on the 2021-2027 budget draft, there will be no budget, Gulyás said. Hungary is adamant on certain points such as agricultural policy, cohesion fund subsidies and the payment of border protection costs.
• The Hungarian government disagrees with the current draft budget on several points, and although the UK leaving means remaining member states will "share a smaller cake" as regards funding, the government can "not accept a budget that allocates less funding to Hungary," Gulyás said.

Cover photo: Attila Kovács (MTI)

• Tags:
• economy,
• cohesion,
• budget,
• agriculture,
• gergely gulyás,
• european union,
• subsidy