The Government accepts the decision of the European Commission with regret, as it endangers the funding of the Erzsébet programme, which finances a Government welfare scheme, and imperils the funding of the scheme that stimulates the domestic tourism sector via the SZÉP (Széchenyi Recreation) Card.

Even in the midst of the economic crisis in the European Union, the Government managed to conceive a plan which provides needy families and children with vacation and recreation opportunities without putting a strain on the state or family budgets. The Erzsébet programme is a non-profit welfare scheme that provides social services. The programme has been proof that it is possible to find an innovative tool for demonstrating solidarity even under dire economic conditions.

With this step, the EC is endangering the future of a programme which has been highly successful in Hungary, has helped many Hungarian people and which stands for many countries as an example to follow. The Government hopes that the EC will acknowledge the legal standpoint that the provision of welfare services and their funding falls within the sphere of competence of member states and not of the EU.

Instead of creating a market monopoly with the introduction of the SZÉP Card, the Government has broken one up: while the former recreation voucher could only be sold by one market participant, the SZÉP Card has been marketed by three large companies, which are owned by both domestic and foreign stakeholders.

The EC’s verdict disputes the conditions of issuing the Card as laid down in the respective Government Decree, as the EC has found these to be too restrictive and in breach of EU regulations. It must be emphasised, however, that the issuing of the Card required strict conditions because consumers’ money had to be safeguarded. The SZÉP Card system currently handles the accounts of 840 thousand employees to which HUF 106bn has been transferred since the programme was launched. As issuers have concluded contracts with 45 thousand service providers, it is obvious that the system’s operation has required extremely solid guarantees. In the viewpoint of Government, the protection of the cardholders’ money justifies these extra requirements. Any enterprise which can fulfil these requirements is free to join the group of Card issuers without having to obtain any additional Government permit, certificate or decision.

The turnover data for the period since the Card was introduced indicates that the system is working in a safe and proper manner, and employees often choose and utilise this service. Thanks to the SZÉP Card, since autumn 2011, HUF 67bn has been channelled via the system to the economy, and the Card has been one of the key safeguards of the stability of the tourism and catering sectors.

The Government does not favour the reduction of real incomes – the transformation of the Cafeteria (fringe benefit) system – but intends to continue spending respective revenues exclusively on welfare objectives or boosting the economy.

(Ministry for National Economy)