Hungary understands that due to Brexit one of the largest contributors is leaving the EU and this causes the EU budget to shrink but we oppose the cutting of cohesion and agricultural funds, Minister of Finance Mihály Varga said after he received EU Commissioner for Competition Margrethe Vestager in his office. Another topic which the two officials discussed was the taxation of digital enterprises.

Speaking of the programming period 2021-2027, the Minister said that a strong, safe and competitive EU was in Hungary’s interest and this required a long-term budget which provides adequate funding for new challenges and traditional policies but which can also contribute to the fulfilment of common goals, he noted. Funding aimed for the protection of the border of the EU, for preventing from outside the EU and blocking the wave of illegal migrants must be increased at an EU level but that cannot destruct existing cohesion fund regulations and frameworks. The pooling of funds designed to narrow the development gap between regions and financial instruments designed to tackle demographic problems would raise a number of issues. From the EU proposal it also becomes clear that the funding gap left by the Brexit is planned to be closed by the reduction of funds for traditional policies, the cohesion policy and the agricultural policy.  EU funds are not hand-outs, they are resources due to member states to help assist economic and social convergence, Mihály Varga pointed out.

The Government of Hungary is of the view that the extent to which a member state contributes to the Brussels-orchestrated handling of the migration issue cannot become a criterion for fund allocation.

The fair taxing of digital enterprises was another topic discussed at the meeting. Until the new, EU-coordinated common regulation is introduced a transitory scheme should be used, the Minister noted, as the principle of equitable taxation gets thus undermined in this period from which only the digital giants would profit, and the budgets of member states may miss millions of euros in revenues.  Related debates must be brought to a close as quickly as possible without harming the sovereign right of member states to have their own tax regime, he said.

(Ministry of Finance)