Talks with German partners have revealed that large companies in Germany had hoped in vain that migrants would resolve their labour shortage. The demand for workers is further increasing in Germany and in surrounding countries, and they will most likely look towards eastern and central Europe to find a solution, he added.

Parragh said a significant wage increase has already started in central and eastern Europe but if other European Union countries want to attract more workers then current wages need to be further increased in central and eastern Europe. Last year the representatives of the government, businesses and employees signed a wage deal.

The government agreed to reduce burdens on labour by 5 percentage points this year and 2 percentage points next year.

The sides agreed that the minimum wage for unskilled workers would increase by 15 percent this year and 8 percent next year, and for skilled workers by 25 percent this year and 12 percent next year. Parragh said that if possible, the wage increase should be upped for next year, accompanied by a significant tax cut.

Republished with permission of Hungary Matters, MTI’s daily newsletter.