Good morning, Ladies and Gentlemen.
Thank you for allowing me to be present at this event, which is made possible by the agreement that has been reached; otherwise, I would not be here today. So first of all, I would like to congratulate those who have brought this agreement to fruition: the employers and employees. We are happy to announce this agreement and to add the Government’s signature to it, because this agreement does not deviate from the grand plan that has guided our actions for decades – or for a decade and a half now. Our grand plan – and now I do not consider it necessary to go into its historical background and justification – is for Hungary to become a work-based society. History plays a role here in that, having lost our natural resources, this country can only survive on what it creates – through either physical strength or intellectual ability. This is the bitter reality of the previous century. And if Hungary does not have a work-based society, then neither will it have economic performance; this is why we must not follow the model of societies that call themselves prosperous, but are in fact welfare-based. We can successfully declare that if there is full employment and everyone has work, then there is economic development and an increase in living standards; and in international competition we are even able to overtake countries that started out from a much better position. Of course, this requires an enhanced perception of productive life in the world of culture, lifestyle or philosophy of life, so that people value their neighbours, friends and colleagues who perform well and profess a kind of productive philosophy of life. In addition, we need economic policy that puts jobs first: one that undertakes the mission of ensuring that those who want to work are able to work. This is the grand plan: that in the end, everyone will want to work. We are not doing badly in implementing this, as, compared to 2010, one million more Hungarians have decided to work: one million more people are in work. Essentially I can say that we are in a state of full employment, and that today a greater challenge for the economy than unemployment is a shortage of labour. Minister for Economy Márton Nagy has just published the relevant figures and made his decision regarding guest workers, and the Government has determined that there are currently 65,000 job vacancies in Hungary. We will issue 35,000 guest worker permits – and even then there will still be 30,000 job vacancies; but for the time being we will not allow them to be filled by guest workers from abroad. We hope that we will be able to fill these 30,000 job vacancies from within Hungary, and so we expect further growth in employment. As far as the Government is concerned, this is the thinking behind the agreement. Every governmental signature must be backed by some kind of philosophical or economic strategy consideration. Well, this is ours.
Of course it is pointless to have jobs if people feel that their work is inadequately compensated. Naturally, all of us in Hungary feel that our work is inadequately compensated – I am one of the very few exceptions. But people generally believe that the value of their work is greater than the wages they receive for it. In the Hungarian labour market this is a fundamental given, which is why there is constant wage pressure, including on employers. And when the state acts as an employer, because we also have many employees, we feel this pressure. And higher wages are argued for not simply on the basis of economic rationality, but also in terms of fairness – people say that the work they do is worth more than the money they get for it. And there is certainly a lot of truth in that; but the problem is that it is not us who decide how much a job is worth, but the market. And this is why it is very important for us that in Hungary the market takes precedence in determining wages. This is why – as the presidents speaking before me have said – the minimum wage in Hungary is not determined by the Government, even though it could be. So this is not a government decree, edict or diktat, but rather something that I have been striving for, I don’t know for how many years now, perhaps almost twenty years: that what is acceptable and what is not should always be agreed on by the parties in the market. Because the fact that no one gets the pay they think they deserve for their work is a problem that cannot be dealt with politically. This issue can only be addressed in the workplace, where employees and employers can discuss with one another other how much their work is actually worth, how much economic benefit it generates, and how that benefit can then be distributed among workers and the owners of capital. This is why my philosophy has always been, and still is, that the Government should not decide on the minimum wage. One of my nightmares is that employers and employees will be unable to agree with each other, and in the end the Government will have to use its authority to decide what the minimum wage should be. Such a situation may arise in the future – it cannot be ruled out. The law provides for a reassuring solution in such a situation, but it is not healthy for it to happen that way. It is healthy for employers and employees to be able to agree. I am very grateful to them for having done this work.
I am particularly grateful in the current circumstances, when one of the prerequisites for the agreement is the recognition that we are living in a time of war, and that the war is blocking economic growth. So whatever we do, no matter how much we do, we cannot raise economic growth above a certain level as long as the war is here, while the shadow of war is hanging over our heads, and it is having such a serious impact on Central Europe – and within that, primarily on the German economic zone. So in such difficult circumstances it is even more valuable that it was not the Government that had to decide, but that the parties were able to reach an agreement. What’s more, the agreement was made more difficult by the fact that a previously concluded three-year agreement had to be revised. You probably don’t remember, but we have been here together in this room before. In 2024 we signed a three-year wage agreement. We have now had to revise that agreement because growth has slowed due to the war, making it impossible to uphold the commitments set out in the original text. It had to be amended. Amending an agreement requires much more will from the parties than creating an agreement does. This is why I say that it was a particular challenge, and I consider it a serious achievement that the parties were able to agree on an amendment to the agreement.
The truth is that we are also employers, the Government is also an employer, and we also implement sectoral wage increases, which have influenced this agreement. I will not list them now, but you are all familiar with them. Teachers, healthcare workers, the judiciary, armed law enforcement, water management, local government employees, culture, the social sector: all of these will see minimum wage increases of 15 per cent in 2026 – in addition to tax cuts, which will primarily improve the situation of families.
The presidents have talked about percentages. I think it is my job to tell you the specific amount. So, in light of this agreement, the minimum wage will increase by 11 per cent, which will mean 322,800 forints per month. This is the new minimum wage in Hungary. The guaranteed wage minimum will increase by 7 per cent, amounting to 373,200 forints per month. These are the new figures that the Hungarian economy will be working with in 2026. There is another important figure. How many people does this affect? Those directly affected – who work under this wage regulation, in two groups – number 700,000 in total. So in the coming year this agreement will directly improve the incomes of 700,000 workers – or, we could say, 700,000 families.
I repeat that the agreement is not the Government’s achievement: it was concluded between employers and employees. The Government provided assistance in this regard, partly through tax cuts and partly through an 11-point agreement with the Chamber of Commerce and Industry on tax breaks for small and medium-sized enterprises. This took 90 billion forints out of the budget, so – in addition to the 90 billion forints allocated to small and medium-sized enterprises – it was not possible to implement the payroll tax cut we would have liked to see, as this simply did not fit within the bounds of reasonable budgetary management. We have not given up on it, but we cannot start the year with it.
And in my opinion there is another important factor: the Government supported the agreement on the 3 per cent loan programme for first-time home buyers. Although this is a different story and not related to wages, it is still connected to them in the sense that for most people the goal of earning an income is to be able to buy their own home. This is especially true for young people. And by making it cheaper for them to buy their first home, to some extent it has been possible to limit their wage demands – or the pressure coming from them – and bring them to a level that can be agreed on.
In conclusion, I must say a few words about the international context. I must say that in recent years – over the past fifteen years – Hungary has achieved a minimum wage increase that is three times the EU average. So, if I put everything that has happened and is happening with the minimum wage into an international, European context, I can say that over a period of fifteen years it has increased at three times the EU average. In 2010 the minimum wage was 73,000 forints, and the guaranteed wage minimum was 89,000 forints. We tend not to remember these figures, but it does not hurt to recall them sometimes, especially if there’s a danger they might come back. Overall, therefore, I have to say that over the past fifteen years the direction of economic policy – which has served to create a work-based economy – is sustainable, and should be maintained.
This agreement will assist the Government by helping it to ensure that both employers and employees feel that wage regulation has been shaped or developed independently of the Government, based on market conditions in accordance with their own decisions, and that they can continue to accept the Government not as a public authority intervening in wage formation, but rather as an economic policy partner. It has been important to me in recent years – and will continue to be important in the future – that when it comes to economic policy you, employers and employees, do not view the Government as a power, but primarily as a partner. No government economic policy can be successful if it is not supported by employers and employees. And the fact that today Hungary has a distinctly market-friendly, business-friendly, performance-based economic policy is only possible because both employers and employees support the Government in these objectives. We have every chance of keeping the Hungarian economy on track.
Once again, I would like to thank the trade unions and employers’ interest groups for bringing this agreement to fruition, and I would also like to thank them for being partners of the Hungarian government in recent years.
Thank you very much for your attention.
