Hungarian government imposes mandatory sales promotions on retail stores
Mandatory sales promotions in stores
Retail outlets will be required to sell certain products with mandatory promotions, and the products selected will always change.
STAPLE FOOD PRODUCTS ARE DIVIDED INTO 20 CATEGORIES AND AT the price of at LEAST ONE PRODUCT FROM EACH CATEGORY MUST BE REDUCED BY AT LEAST 10% PER WEEK COMPARED TO THE LOWEST PRICE OF THE LAST 30 DAYS. The discount may not affect foodstuffs currently in the price cap regime.
There will also be stricter controls on pricing, which means that shops will be raided. The price monitoring system will come into force from 1 July at the latest, when the price freeze is still planned to be in place.
Government spokeswoman Alexandra Szentkirályi said that the details of the measure are being worked out, and that the mandatory action will mainly affect large chains, not small shops.
How long the measure will stay in play will be revealed by the detailed rules, she added.
The government expects compulsory campaigns to create price competition, which will ultimately benefit consumers, Alexandra Szentkirályi said.
We won't let shops profit from the current situation,
she added.
The relevant ministry will work out the details of the compulsory promotions, but the government plans to have a turnover limit and the larger chains will be affected.
When asked about any potential plan to introduced regulated prices for beach admission tickets, Gergely Gulyás responded that this should be discussed with local governments, as it would affect their revenue.
THE IDEA OF EXTENDING THE PRICE FREEZE TO NEW PRODUCTS WAS NOT RAISED IN THE CONSULTATION.
Fuel price freeze not on the table for the time being
There is currently no proposal on the government's table for a new fuel price cap, and petrol prices are currently falling, Gulyás said, but added that "nothing can be ruled out." According to him, it still has to be seen how fuel prices develop, and reminded that when the cabinet had introduced the fuel price cap, market prices had been higher than currently.
The minister said there is no such proposal, but if fuel prices rise again, they can start discussing another step.
Inflation may be higher than the government expects
The government does not plan to bring forward the pension supplement because it does not know yet whether it will be needed, Gulyás said. The government calculates annual inflation and will implement the pension supplement accordingly. It is not possible to say today what inflation will be at the end of the year.
Several economic analyses say that inflation will be 1-2-3% higher than the government expects,
Gulyás said, but added that for the time being he would not call the government's forecast wrong.
The government expects a breakthrough in the trend of inflation in July and August.
Favourable sign
As we reported yesterday, Barnabás Virág, Deputy Governor of the National Bank of Hungarz, announced that the Monetary Council may decide at its meeting next Tuesdaz to tighten the interest rate corridor by bringing the top end of the band substantially lower. Gergely Gulyás said that the government welcomes this move, as it is
the first positive sign of a decrease in lending rates.
International Investment Bank exit
Asked if the Hungarian state will reclaim the money it is owed from the International Investment Bank (IIB) that is moving its headquarters to Russia after U.S. sanctions forced Hungary to exit the bank, Gulyás replied that the government has a claim of HUF 74 billion, and it wants a full refund. He also said that legislation will be published later today, stating that the IIB is no longer headquartered in Budapest.
According to the Hungarian government, the country has not suffered any direct damage from the U.S. sanctions on the IIB. Gulyás said the government wants to get the money it is owed from the bank back as soon as possible, but there is a procedure for doing so.
According to Gulyás, the institution often referred to as a Russian 'spy bank' did not pose a threat to Hungary because it would have been banned a long time ago.
Several media, including The New York Times had written about Hungary inviting a Trojan horse of the Russian secret service to the capital city and pampering IIB with extreme privileges. IIB replied to allegations in a separate statement.
Russia is not our friend, but our partner
Gulyás said Russia is not a friend of Hungary, but an economic partner. He also said that America is our ally and our allies are our friends, while for Russia to be a friend, it should respect international law, but he added that on this principle Hungary should not be friends with the U.S. either.
Ratification of Sweden's NATO membership
The Hungarian government's aim is that if we are to be allies in a military alliance with Sweden, we must first restore political trust between the two countries, Gulyás said in response to a question on when Budapest would ratify Sweden's membership in NATO.
According to Gulyás, it is understandable that there is irony about the disagreement between the government and the Fidesz faction, but added that there are indeed arguments worth considering in the Fidesz faction. Gulyás said that it is not a question of the faction flouting the government's plans, but of arguments that need to be considered.
GULYÁS DID NOT SAY WHEN THE GOVERNMENT WOULD RATIFY THE SWEDISH ACCESSION.
Along with Finland, Sweden applied to join NATO in May last year. Finland's application was processed in record time and it became the thirty-first member of the alliance on 4 April this year. Hungary and Turkey have been holding out to give their consent to its accession, and they are the only ones in the transatlantic defence alliance to ratify Sweden's membership.
NATO must agree unanimously for new members to join.
Turkish President Recep Tayyip Erdogan maintains his hostile attitude towards Sweden, accusing the country of embracing Kurdish militants and allowing them to demonstrate on the streets of Stockholm. Hungary's Prime Minister Viktor Orbán, emphasising Christian values when rejecting migration and tightening his grip on his "illiberal democracy", found a different fault with Stockholm.
Orbán, who has an iron grip on his ruling Fidesz party [this is why Gulyás labelled the dispute between the party and the government as ironic], said earlier there was dissent within party's parliamentary caucus regarding the ratification, as Finland, and Sweden in particular, have been
spreading blatant lies about Hungary, about the rule of law in Hungary, about democracy, about life here.
Other than that no one has a clue why he has been stalling Sweden's bid since last summer and especially why Budapest treated the parliamentary debate and vote on the membership of the two Nordic countries differently.
Fearing that they might be targeted after Russia invaded Ukraine on 24 February 2022, Finland and Sweden abandoned their traditional positions of military non-alignment to seek protection under NATO’s security umbrella.
More to follow!
