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Hungary’s government will continue to back only those sanctions which don’t hurt Hungary and Europe more than they hurt Russia, the prime minister’s press chief said on Friday, adding that an embargo on Russian gas imports would threaten the entire continent’s gas supply. The decisions taken by Brussels so far have contributed to the record-high inflation rate, Gergely Gulyás told a regular press briefing, adding that the imposition of a gas embargo would put the energy supply of the whole of Europe at risk. He called on the European community to return to the sanctions as described in the “consensus reached in Versailles”, which exempted energy resources from the sanctions imposed on Russia as a response to the war in Ukraine. While “we somehow got over the issue of coal and oil”, further sanctions on gas deliveries would have “extremely negative effects”, he said.
Meanwhile, Gulyás also said the Hungarian government did not support the introduction of a global minimum tax, a position which the finance minister would hold firm on at Friday’s Ecofin meeting. This matter requires a unanimous decision, which cannot be reached without Hungary, he added. Gulyás said a global minimum tax would force Hungary to double tax burdens on businesses, arguing that they currently pay a rate of 7.5% and the global minimum tax rate would be 15%. The global minimum tax would cost Hungary its tax advantage in the region and Europe, and place burdens on businesses that would be too heavy even in a normal economic situation, let alone in a time of war, he added.
Gulyás said the economic crisis caused by the war called for economic growth, tax cuts and investment promotion with a view to protecting jobs. He said the reason why the Hungarian government had originally been in favour of a global minimum tax was because it was supposed to be imposed on tech giants that avoided paying all their taxes. Yet these sort of companies are not included in the current package while all other types of commodity producing companies are, he said. Gulyás said the “EU is rushing into things again” and would introduce the new tax when it was uncertain that the package would be backed by the United States Congress given the upcoming midterm election there. He noted that a Republican-backed organisation that deals with taxation opposes the minimum tax.
In response to a question, Gulyás said the government continued to reject a congestion fee for Budapest motorists, adding that the measure would “make motorists’ life impossible” in the city. Gulyás accused the Budapest municipality of aiming to “make life impossible for motorists in every other way”, and warned politicians against “handing out lifestyle advice”. Hungarians have a right to live as they like, within the confines of the law, he said. “Although 21st century Liberalism actively opposes freedom in western Europe, it is not a good discipline to transfer to Hungary,” Gulyás said. The government can only provide incentives, he added.