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Mr. Speaker, Honourable House,
In accordance with our parliamentary tradition, at the beginning of the autumn session I will report to Parliament on the events of the months since the end of the spring session, and inform you of the Government’s plans.
First of all, I need to talk about the floods. For ten days from mid-September our country was in a difficult situation, facing a serious threat. Suddenly there was a flood wave which caused serious losses in many countries in Central Europe. Here it was the second worst flood of the century. We defended the entire stretch of the Danube from Győr through Dunaszekcső to Mohács. The defence operations were methodical and went according to plan. We succeeded in averting disaster. I would like to thank all the volunteers, water management experts, police officers, disaster relief workers, firefighters and soldiers for the resilience they showed. Once again we have seen that when there is trouble, Hungarians unite in an exemplary way. Something of this should be carried over into calmer times. We can say that over the course of a decade Hungary and the Hungarian state have visibly strengthened. Compared with the 2013 flood defence operations, the Hungarian state has become more efficient, better organised and better prepared. We made the right decision when we supplemented the lines of defence after the 2013 floods. After the 2013 floods we spent a total of 435 billion forints on flood protection improvements, of which 150 billion was spent on reinforcing the defence lines along the Danube. The Moson–Danube floodgate was completed, and so during this year’s floods the city of Győr was not in danger. We built a floodgate at the mouth of the Barát stream in Csillaghegy in Budapest to protect North Buda and Budakalász. In the Komárom area we built a new section of flood defence wall, we renovated the Komárom flood defence wall, and increased the height of the flood defence embankment on the Danube at Komárom–Almásfüzitő.
The Danube water level rose by 6.5 metres as a result of the floods, and so we had to build temporary barriers along 40 kilometres of the river, and mobile flood barriers along 4.6 kilometres. We also needed two million sandbags and 55,000 tonnes of sand. In the near future we will complete the flood protection upgrading work in Esztergom, which we started in January. As usual, the water management authority will present its post-flood report to the Government soon, and then we will decide on further improvements to the Danube flood defence system.
Honourable Members,
In Hungary it is a long-standing tradition that the state also plays a role in arranging for children’s holidays. This summer forty thousand children had the opportunity to spend their holidays in Erzsébet camps on Lake Balaton. More than three thousand were from beyond our borders, and we also arranged the holidays of a hundred Ukrainian children. The Government regularly takes stock of the situation when school starts in September. This shows that in recent years we have built and renovated kindergartens and schools at a cost of 1,400 billion forints. I can report to the House that 57 school swimming pools, 87 gyms and 31 new schools are currently being built. In particular I must mention – because the whole country can be proud of it – that at the end of August we inaugurated the largest school project in the country, the Dunakeszi Student Quarter: a 20-classroom high school, a 26-classroom technical and vocational school, a gymnasium for each of them, and a municipal swimming pool, all over an area of 32,000 square metres. This new educational centre can accommodate 1,500 pupils. For the start of the school year 13 million textbooks have been distributed free of charge to students in general education and vocational training. free textbooks will be provided to 1.2 million pupils, saving families 15 billion forints. We have also provided 80,000 free school kits to families in need.
Honourable House,
One of the Government’s priority development plans is the Digital Hungary programme. In July we reached an important milestone: the EgészségAblak [“Health Window”] application gives access to eighty healthcare institutions, and patients can book appointments in outpatient clinics digitally. During the summer we continued the Government’s telecare programme. Around 650,000 people have registered, meaning that one in three people over 65 now use personal alarms, so that their lives and health are safer today than they were before. We also launched the Digital Citizenship Programme. You can now use your mobile phone for official identification purposes, find all your personal and vehicle details in one place, and book an appointment at a government office at the touch of a button. The programme will continue to add new services throughout the year.
Honourable Members,
For the success of any economic year, an important prerequisite is good performance from the tourism industry. Summer is a key factor in our country because of our natural characteristics. This summer was a record one for Hungarian tourism, and this year promises to be a record year. Never before have so many of our fellow citizens spent holidays within our borders, and never before have so many tourists visited our country. This is in addition to the fact that never before have so many Hungarians holidayed abroad as did this year. I would also like to remind you that in June, after almost twenty years, we took Budapest’s Ferenc Liszt International Airport back into national ownership: we took back the global gateway to our country. I would like to inform the House that, based on summer figures, the airport will deal with 17.5 million passengers, and will once again be able to compete with rival EU airports. Incidentally, I should also mention that MVM, Magyar Villamos Művek [“Hungarian Electrical Works”], has acquired a stake in one of the world’s largest natural gas fields. In all modesty this can be regarded as historic. If we add to this the fact that Hungary ranks third in the world after Chile and Greece in terms of the share of solar energy in electricity generation, we can see that we are rapidly approaching energy independence.
Honourable House,
I can report the following about the country’s economic situation. In terms of economic growth, we are 11th out of the 27 countries in the European Union, with a growth rate one and a half times the European Union average. Those behind us include the French, the Italians, the Germans and the Austrians. But we cannot be satisfied with this, and in the future we will need even better performance and greater growth. In terms of investment we are in 4th place in the European Union, with performance of 24.5 per cent related to gross domestic product. This is good, but here too we should aim for first place. Our economy continues to have full employment, with 4.74 million people in work, and those who want work being able to find it and support their families. I can report to the House that this summer the average gross wage rose to 636,700 forints. This is an increase of 14 per cent on last year. If we deduct inflation from this, we see a 9.4 per cent increase in real wages. The situation is that real wages in Hungary have been rising steadily for the past twelve months. Although obituaries are regularly written for the Hungarian economy, it is doing well, thank you, and is preparing to fight the battles ahead. It may be true that those for whom obituaries are written live long lives.
Honourable House,
I can tell you that the country’s financial situation is reassuringly stable. Public debt is on a downward path, at around 75 per cent, but we have to aim for a level below 50 per cent. We want to bring the budget deficit down from 6.5 per cent last year to 4.5 per cent, and we are on track for this. I can report to Parliament that this summer we extended the retail interest rate freeze. This is protecting 300,000 families from high interest rates. We will only lift the interest rate freeze if interest rates continue to fall perceptibly, and do not place an unbearable and unfair burden on families. Over the summer the Government also extended the childbirth pledge deadline for baby loans that have already been taken out. The new deadline is 1 July 2026. The financial situation of families will also be improved by the launch on 1 July of a new home renovation programme supporting the energy modernisation of detached houses built before 1990. We estimate that at least 20,000 houses could be renovated under this programme.
Honourable House,
The financial situation of the country is strongly influenced by inflation and the related interest rates. By the end of last year we had fulfilled our commitment and brought inflation below 10 per cent. We continued this work, and by the end of the summer inflation was at 3.4 per cent. Meanwhile the Central Bank base rate is 6.5 per cent. As we saw at the annual roving conference, among economists there is lively and heated debate about the desirable level of interest rates. This is understandable when one looks at interest rates in other countries in the region. I would like to make it clear to you that, while the Government wants higher economic growth and more favourable credit conditions than today, we respect the independence of the Central Bank 100 per cent, and the Government will live with the interest rate environment set by the Central Bank.
Honourable Members,
This year’s changes in the global economy have convinced us that if we want to achieve economic success in the future we will need new economic policies and new economic solutions. In fact I believe that without a new economic policy it will not be possible to defend the results achieved so far.
Mr. Speaker, Honourable House,
The pandemic, the war and the sanctions have accelerated the transformation of the world economy. A formerly unified world economy is rapidly splitting into a Western and an Eastern economy. For Hungary this is the worst possible scenario. It is well known that both world wars ended with Hungary on the losing side, thereby losing the territories that had earlier provided energy, raw materials and natural resources to the Hungarian economy. Our internal market also shrank, and therefore our national economy – and with it the Hungarian state – can only survive if we are able to produce and manufacture competitive products for the world market, and are able to sell them there. For this reason the smooth functioning of the world economy and the unified structure of world trade are existential for Hungary. Today Hungary’s exports account for 76 per cent of our gross domestic product, which puts us in 33rd place in the world ranking – while we are only 95th in the world population ranking. Ladies and Gentlemen, the past few months have only added to the problem. Despite European citizens having voted for change, yet again a Commission has been formed in Brussels that will continue the policy of dividing and splitting the world economy. What I see is that Brussels is becoming ever more committed to the politics of bloc formation, with the tone and spirit of the Cold War becoming ever more prevalent. Brussels – and the European Union as a whole – could choose to improve its competitiveness, strengthen its immune system, enter into what is undoubtedly increasingly fierce competition, and take up the challenges from the emerging countries of the world economy. Unfortunately it is not doing so. For Hungary this path – the path of bloc formation – is impassable. That path could lead to a reduction in our economic autonomy, to vulnerability, dependence, economic stagnation and immiseration. Therefore Hungary must not go down that path. We need a new economic policy, we need to build a policy of economic neutrality.
I am convinced, Mr. Speaker, Honourable House, that Hungary must not enter either bloc. We must stay out of the conflicts that force us to choose between the Eastern and Western economies. It is in our interest to maintain economic relations with everyone. We must not look at the economy through the lens of politics, but must only pursue the interests of the Hungarian economy. We should only adopt what is useful and reasonable for Hungary – and adopt it from both the East and the West. Anything that leads to armed conflict or a trade war must be rejected. The Government believes that in the new world economy that is taking shape, those who succeed will be those who do not allow themselves to be forced down a certain path, who are able to keep their options open, and who retain their capacity to act. Hungary needs the best of everything: in technology, in capital investment, and in credit programmes. It needs cutting-edge technology, long-term capital investment, the most advantageous lending programmes, and balanced links to all corners of the globe. The new neutral economic policy, Mr. Speaker, Honourable House, also requires new instruments. We will deploy these successively in the months and years ahead. What is needed is not some kind of reform package reminiscent of the socialist era or a great leap forward, but rather successive and interdependent action plans for industrial policy, enterprise development and finance.
The measures in the first action plan are already included in the budget that will be presented to you shortly. Workers’ loans similar to student loans, capital grants for small and medium-sized enterprises, putting the thirteenth month’s pension on a permanent footing, and the doubling of child tax credit: these will be the first steps in a new economic policy that will give a boost to economic growth. Although we are still in the top half of the European Union in terms of economic growth, I feel that next year this will not be enough. We need to bring the Hungarian economy’s growth rate into the 3 to 6 per cent range, even if no one in Europe except us succeeds in doing so. We must do it on our own if we have to, and I am convinced that Hungary can do it.
Honourable House,
Allow me to speak briefly about the issue of migration, because this summer has brought heated debates throughout Europe. Germany has closed its borders, and France is restoring order at its borders, according to the new Prime Minister. The Netherlands has announced its toughest ever anti-migration legislation. The governments of Sweden and Finland are debating anti-migration laws. The era of unrestricted travel is coming to an end. All they needed to do was to take Hungary’s advice, follow Hungary’s example and not let migrants in at the start. Countless knife attacks are being committed in Germany. Parts of England were in the grip of open conflict for weeks. In most Western countries conditions are dire. We are not happy to be proved right. It is still not too late to come to our senses, but unfortunately that is not what we are seeing. Nowadays it is fashionable to persecute and punish those who defend their own borders, who defend the borders of Europe, and who speak the truth. Hungary is being made to pay because it has defended Europe. They want to imprison Italy’s Deputy Prime Minister Salvini because he defended his country. If Brussels continues to insist on its decision to punish us, it will get what it wants: we will transport the migrants who are pounding on Hungary’s gates to the main square in Brussels.
Honourable House, Mr. Speaker,
I am afraid we will be right about the war, just as we are right about migration. The West entered the Ukrainian–Russian war recklessly, on the basis of miscalculations and with a flawed strategy. The situation is getting worse, with the fighting not diminishing but escalating. There is no solution to the war on the battlefield, where there is only death, suffering and destruction. What is needed is a ceasefire, negotiations and peace. In Europe today only Hungary still sees its mission as peace. But soon, as happened with migration, others will see the error of supporting the war, and will switch to the side of peace. Hungary has launched peace missions to Kyiv/Kiev, Moscow and Beijing, and by visiting President Trump. In doing so, we have also opened up the debate on peace in Europe – something which was previously impossible. At Hungary’s initiative, an international group called “Friends of Peace” was formed by countries which do not want to stand idly by and watch the whole of humanity being driven to the brink of the Third World War.
Honourable Members,
Whatever the issue, whether it is flooding, the economy, the European Union, migration or war, we always end up at the question of sovereignty and national independence. Hungary’s government is a national government, and is therefore necessarily sovereigntist. International cooperation is an important and beautiful thing, but we know that we can only really rely on ourselves. Trouble has always been brought to Hungary from the international arena, and the solution has always been national resistance, national unity and national governance. In many countries in Europe it has been the other way round – for example in Germany, which is why they distrust sovereigntist governments. In fact, sometimes they are not only distrustful of them, but hostile to them. There are also attempts to limit the sovereignty of national governments – sometimes overtly, sometimes covertly. Overt attacks, such as those by the European Parliament, are easier to detect and easier to defend against. Covert attacks, attempts at destabilisation, are more difficult. In these cases successful defence is more difficult, but not impossible. Let us take the example of the report published in the summer which exposed the US disinformation war against Chinese vaccines during the COVID pandemic. It was produced by the international media group Reuters – not by [the Hungarian news agency] MTI, but Reuters! I think we can expect ever more of this in the future. Therefore I want to assure the House that the Government will not hesitate to use all the instruments of the Hungarian state in the interests of Hungary’s sovereignty and independence. We shall defend Hungary against all actions that threaten the interests, security, well-being and health of the Hungarian people – regardless of the direction from which these attacks come. We will not have an easy task, but I am convinced – and indeed it is my experience – that no matter how hopeless the situation, if you persevere and do your best, everything will turn out well in the end.
In this spirit, I wish Members of this House much meaningful and fruitful debate during the autumn session.
Thank you for listening to me.
