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Decline in European competitiveness is the gravest challenge 

On Tuesday in Strasbourg, Prime Minister Viktor Orbán described the decline in European competitiveness as one of the gravest challenges we are facing, indicating that the Hungarian EU presidency will present a proposal for the adoption of a new European competitiveness pact extending to a period of five years. 

At the press conference called to outline the programme of the Hungarian presidency, Mr Orbán said today the situation of the European Union is much graver than it was in 2011, at the time of the first Hungarian EU presidency. 

He said there is a war being waged in Ukraine, in Europe, there are serious conflicts in the Middle East and in Africa, the impacts and consequences of which can be felt also here. Today, every international conflict conveys the threat of escalation, he added.

Mr Orbán said since 2015 the migration crisis has grown out of all proportion, while there are ongoing security threats which may cause the entire Schengen Area to disintegrate.

He mentioned that during the day Sweden had announced the suspension of the rules relating to free movement. 

Meanwhile, the EU is continually losing its global competitiveness,

he stated. 

At this point, a young man interrupted the Prime Minister’s speech, shouting in Hungarian repeatedly ‘How much did you sell your country for Prime Minister?’. He added ‘You sold it to Putin, you sold it to Xi Jinping. How much did Balázs Orbán sell the country for Prime Minister?’ 

After the man was led out, Mr Orbán said a short explanation is necessary in order to better understand Hungarian political culture. Hungarian is a direct language, and communication, too, is rather harsh. But when a Hungarian politician calls another a ‘scoundrel’ “all it means in our language is that ‘I disagree with you,’” he said. 

Returning to the goals of the EU presidency, the Prime Minister mentioned Mario Draghi’s report and French President Emmanuel Macron’s opinion on competitiveness.

Mr Orbán said, compared with Mario Draghi and Emmanuel Macron, he is a moderate prime minister, but he, too, takes the view that the decline in European competitiveness is the gravest challenge we must face.

He recalled that the purpose of his visit was to introduce on Wednesday the programme of the Hungarian rotating presidency to the European Parliament. 

He said Hungary has held this office since 1 July, and after 2011, this is the second Hungarian presidency. He added that also in person he was in charge of this work for the second time, “and the third date, too, is written into my calendar as optimism is important.” 

In his view, also during the first Hungarian presidency, there was a critical period due to the after-effects of the financial crisis and the consequences of the Arab Spring and the Fukushima disaster. 

Mr Orbán said, according to the Hungarian position, we can only get over the present troubles if we change things. The European Union must change and the Hungarian presidency wants to be the engine of this change, he pointed out.

He observed that – due to the size of Hungary – the Hungarian presidency can only highlight problems and identify proposals, and the relevant decisions will eventually have to be made by the European institutions and the large states of Europe. 

He underlined that the improvement of European competitiveness lay at the centre of the objectives of the Hungarian presidency. For two decades now, economic growth in the EU has been slower than in the United States or China, and the EU’s share in world trade has also been on the decrease. A business in the European Union is compelled to pay two to three times more for electricity and four to five times more for natural gas than a business in the United States. 

European companies spend half as much on research and development compared with their American counterparts, and this is aggravated by the negative demographic processes observable in Europe.

There are quite a few European governments which seek to remedy the population decline with migration, but “the numbers still don’t add up,” not even migration is able to substitute for the missing unborn children.

In economic terms, this means that if we want to be competitive, we must factor in the fact that for the first time we are in a situation where the continual increase in workforce no longer supports the growth of the European gross domestic product, Mr Orbán explained. 

He added that the improvement of economic productivity was twice as important as before because the improvement of productivity must exceed the United States’ pace of development.

Mr Orbán informed members of the press that the Hungarian presidency would propose the adoption of a new European competitiveness pact extending to a period of five years at the informal meeting of European leaders due to be held on 8 November in Budapest. With such a pact, all European leaders and countries could commit to a long-term, five-year policy for the improvement of competitiveness, he pointed out. 

The competitiveness pact would include the reduction of administrative burdens and over-regulation, affordable energy prices and a green industrial policy. The latter must be harmonised with European industrial policy, he observed. 

The pact would also cover the strengthening of the internal market, and the elimination of the restrictions hindering the free movement of goods and services. According to the Draghi Report, with these rules alone, the EU is losing ten per cent of the European GDP, he highlighted. 

They will propose the implementation of a capital market union because today the savings of the European people land in the United States, and the European capital market is unable to keep the European people’s money here in Europe. 

Finally, he said connectivity is also part of the proposed pact, and mentioned the absurdity of the punitive tariffs to be imposed on Chinese electric vehicles as an example. He pointed out that 10 of the 27 Member States had supported the imposition of punitive tariffs, while 17 had not. The ten states account for just 45 per cent of the EU’s total population, meaning that not even the majority of people support this measure. The situation is all the more absurd because European car manufacturers – that the measure would in theory serve to protect – themselves oppose it, he added.

A protective tariff is a tariff that protects our own domestic industry, but this is more a violation of the actors concerned than a protective tariff, he added.

In the context of migration, Mr Orbán stressed that it was not possible to stop illegal immigration without hotspots outside the borders of the European Union. 

The only possible way to stop migration is if the EU’s Member States agree that those who want to enter the territory of the EU must stop outside the EU’s borders, must seek permission for entry, and may not enter the territory of the EU until the positive assessment of their applications. 

If we’re unable to achieve this, we will never stop migration, this is the only option,

he said. 

When someone has already gained entry into the territory of the EU and has the rights of a person residing in the territory of the EU, even if they are subsequently not granted permission to stay, they will never leave the territory of the EU, Mr Orbán explained.

He added that he was not aware of a single government that wanted to gather such people together with force, to put them on vehicles and to transport them out of the territory of the European Union.

“Only a migrant we don’t let in will not stay here,” the Prime Minister pointed out, observing that ever since 2015 this has been his position, for which he is sometimes called an idiot, sometimes evil, but in the end, everyone will share this position. 

Mr Orbán said, it is evident in his opinion that the EU’s asylum system is not working at present, and the consequences of illegal migration include the rise of anti-Semitism, acts of violence committed against women and the intensification of homophobia in Europe.

The Prime Minister stressed that as the EU had no successful common migration policy, Member States attempted to protect themselves individually. However, these individual attempts will tear the Schengen system apart, and so instead of them, “we need an overarching joint decision.” 

Mr Orbán said the Hungarian presidency will propose the introduction of a system of Schengen summits, meaning that – based on the model of the summits of the countries forming part of the Eurozone – the leaders of the countries forming part of the Schengen Zone should regularly meet and should manage together – the same as the euro – the Schengen borders at the highest political level. 

Among the items of the Hungarian presidency’s programme, Mr Orbán further spoke about an EU defence policy and the strengthening of its technological basis; this, too, will be on the agenda of the November meeting to be held in Budapest.

The Prime Minister mentioned enlargement as the next planned issue of talks, stressing that without the integration of the Balkans, Europe will never be complete. 

“Twenty years ago, we promised the countries of the Western Balkans that we will admit them; it’s time to deliver on that promise,” he warned, recalling that the Hungarian presidency has also convened an EU-Western Balkans summit. 

He pointed out that enlargement must be merit-based, observing at the same time that without Serbia enlargement cannot be successful; the countries of the Western Balkans cannot be integrated without Serbia. It is a country of such weight and strength without which the Balkans cannot be stabilised, he pointed out. 

He stressed that therefore, it was necessary to come to an agreement with Serbia, and in this regard Hungary wanted to make progress during the Hungarian EU presidency. 

He said the Hungarian presidency also wishes to address the issue of agriculture. The reason for this is that the planning of the seven-year financial framework beginning in 2027, the designation of the direction of the EU’s agricultural policy has already started. 

He laid down that the goal was to create a competitive, crisis-proof and farmer-friendly agriculture. 

If we implement the points of the Hungarian presidency, then its slogan, too, will come true: Make Europe Great Again,

he said. 

In answer to a question relating to the US presidential election, Mr Orbán highlighted that this was not for him to answer, “but I know one thing, if Mr Trump returns, we will open multiple bottles of champagne,” he said. 

He said it is a fortunate development that the informal meeting of European leaders will take place two days after the US elections, and so there will be time to discuss what should be next.

He drew attention to the significant difference between the Democratic leadership and the Republicans, adding that if the Democrats are unable to stay in office and the president will be a Republican, that will open a new chapter.

According to his expectations, if Donald Trump is elected president, we will have to take seriously what he says: he will not wait until his inauguration as president before getting down to managing the war in Ukraine and a possible peace. We European leaders will not have 2 to 3 months before the elections and the entry into office of the new president, he stated. 

In answer to a question about the activist who interrupted his press conference, Mr Orbán said a person who decides to become prime minister of Hungary and is elected must prepare for a life full of interludes. “At home, it’s like this every day,” he stated.

In answer to the questions as to why he does not support the extension of another loan of 35 billion to Ukraine and whether he would fight against Russian President Vladimir Putin, he recalled that Hungary was in the process of conducting the largest humanitarian aid campaign of its history. People are arriving from Ukraine in very large numbers, we take them in immediately, without any pre-condition, also today, tens of thousands of Ukrainian nationals are living in Hungary, Ukrainian schools have been opened for them, despite the fact that in the meantime Hungarian schools are being closed down in Ukraine. We are doing everything that a Christian country can, assisting a neighbouring country.

He took the view that the debate was about an expected attitude in the European Union, and Hungary’s opinion differed from the position of the majority of EU states. The Hungarian intention is to ensure that a ceasefire is achieved within the shortest possible time because this war cannot be won on the battlefield. If the parties are unable to win on the battlefield, they must conclude a ceasefire and save human lives, he laid down, adding that Hungary would like to help with this.

At present, communication is seen as a sin in the EU, but without communication a war situation cannot be successfully resolved. We must communicate and involve as many countries as possible in order to achieve a ceasefire. At this point in time, we are in a strong minority, but this is no reason for us to surrender our perfectly clear position altogether, he stated. 

He also said there are major changes under way in European politics; this process started some time ago and will take more than a couple of days to complete. There is a European elite comprised of the Left, the liberals and the centre-right which calls itself a ‘mainstream elite.” 

The people are ever less satisfied with their performance, and the mainstream elite is surrounded by a ring of protest. The people do not agree with the war, do not agree with migration, do not want to let illegal immigrants in, do not agree with the present economic policy, their agriculture is being destroyed, businesses are over-regulated and purchasing power is declining.

As we live in democracy, these voices find their representatives, and new parties, new actors are emerging with ever more weight. Unless the elite changes, they will find themselves in a minority, he said, observing that a change of course is a concomitant of democracy. 

Mr Orbán called for calm and composure, pointing out that they should be reasonable, should understand what the people want and should change. Rather than excluding the patriots, they should invite them in. 

He said he has been a Member of Parliament for 34 years, and in the Hungarian Parliament not once has a situated developed where a party gets into Parliament and is not given the committee leadership roles that it would be entitled to. This is inconceivable in the Hungarian Parliament, he laid down. 

He also said the Brussels mainstream, the Brussels bureaucracy must finally decide whether they continue to protect the status quo or will listen to the people’s opinions. 

The Patriots are only a symptom, he added, stating in continuation that if the Brussels elite is not prepared to change, they must be pushed out of the way.

At the same time, according to Mr Orbán, the mainstream elite, too, can be part of the change, they do not necessarily want to push them out. However, they must understand that certain changes are required in the management of migration, in agriculture and on the issue of competitiveness.

In answer to a question, the Hungarian prime Minister said Member States must help each other, rather than block decisions. 

In his view, there are changes in EU culture, these started in 2015, partly with the migration crisis and partly with Brexit.

He said migration was an enormous blow to European unity, and highlighted that “we are different in so many ways.” 

Instead of allowing each Member State to pursue its own migration policy, the big boys decided that a single common migration policy was required, he said. 

He added that this policy must also be followed by those who do not want it; Hungary is required to pay a fine of EUR 200 million because it does not want to let migrants in. 

Mr Orbán said with the departure of the United Kingdom, the balance between those who want a centralised, federalist Europe and the pro-sovereignty forces was upset. This situation has led to ever more conflicts, he pointed out, observing that while Britain was still a member, there was no rule of law procedure. Rather than seeking a confrontation, the pro-sovereignty forces want to preserve the former state of balance and do not want centralisation, he stressed. 

In response to accusations that he continually and intentionally undermines unity in the EU, Mr Orbán said unity is still the most important EU value. The EU’s slogan itself says ‘unity in diversity,’ but this does not mean that the Hungarian prime minister must always keep his mouth shut, he stressed.

The Prime Minister said he is here in order to represent Hungary’s national interests, and wants to agree with the leaders of all other states on this basis. Mr Orbán said he does not represent a globalist elite or European bureaucrats, he has both feet on the ground as a representative of the national interests. 

In answer to a question, he said it is regrettable that instead of a Hungarian MEP, a Greek has been selected into the EP’s delegation to Serbia. He added that he was sure that the Greek MEP deserved this position. He mentioned at the same time that not even Hungarian opposition parties supported the Hungarian candidate.

He said Hungary has a mission as Hungarian minority communities live outside Hungary, and these communities deserve to have representation also in the European Parliament; these representatives can help their own communities as well as with the given country’s relations with the EU. 

In answer to the question of what he would do if Hungary were not a member of NATO and Putin attacked Hungary, the Prime Minister said his party is a party of freedom fighters, fighting is in their blood, and if the country needs defending, they will be there in the first line.

At the same time, he explained in continuation, Hungary has experience with the Russians as they occupied the country more than once. Therefore, we also know when and how we should or should not negotiate. This is an extremely complex issue and we fully sympathise with Ukraine. 

However, Hungary is a member of NATO, meaning that it does not have to ponder what would happen if it were not a member of NATO. We were a buffer zone, a zone of clashes for many long decades, and it took us more than 45 years to become a member of NATO. 

In answer to a question about the new Polish government, he said it is not his job to interfere with Poland’s internal affairs, but his Polish political friends are suffering a great deal now and he sympathises with them. He added that they had built an institutional framework with the former Polish government which had served as a firm foundation for relations between the two countries, including the Felczak Institute which the incumbent Polish government had put an end to, ceasing its funding. This is a highly negative gesture on the part of the Polish government towards the Hungarians, he stated, expressing his opinion. 

Regarding his relationships with other European leaders, Mr Orbán spoke about the fact that Hungary is a small country, and when it started its EU presidency, he went to Berlin, Paris and Rome to consult with “the big ones.” The Prime Minister described these talks lasting for many long hours as satisfactory.

In answer to a question about European leadership, Mr Orbán said the underlying problem is the predominance of the institutions. We tend to believe, he explained, that the institutions are the only important things in politics, and the only task of leaders is to ensure that these institutions work well. This may be true, he observed, but only when everything is on an “upward course,” when the GDP and living standards increase. However, in a worst-case scenario you need strong leaders. 

He added that there was no need to be afraid of strong elected leaders because they, too, would fail over time. “I myself failed several times.” 

Mr Orbán said in answer to a question about the Chinese loan taken out for the construction of the Budapest-Belgrade railway line and his father’s business involvement in the project that he does not concern himself with business affairs. He said road and railway construction projects are in general ordered by states both in Europe and in the world, while the actual construction work is performed by private companies. At this point, he no longer has any business with the project. His sole responsibility is to ensure that the quality of the project should be in order. 

In answer to a question concerning the immunity of Hungarian MEP Péter Magyar, Mr Orbán said parliamentary immunity is an important institution, the meaning of which lies in preventing the executive branch of power from detaining or keeping Members of Parliament away from their legislative work through its law enforcement agencies. 

If, therefore, there is a threat that proceedings are instituted against someone with a view to keeping them away from their legislative work, then their immunity must be upheld. If this is not the case, there is no room for immunity. He added that this, however, must be decided not by him, but by the competent Members of the European Parliament.

The Prime Minister stressed in answer to a question that while the parties of Patriots for Europe are described in the international press and sometimes also in the European institutions as anti-Europeans who want to take their countries out of the European Union, this is not the patriots’ intention. We need Europe and the European Union, therefore, we would like to change it, rather than destroy it, he stressed. 

Regarding the Draghi Report analysing the competitiveness of the EU, he said he agrees with its diagnosis part; the other part is the proposed solution about which there is much talk now. In his opinion, economic neutrality constitutes the philosophical basis of the study, Mario Draghi says instead of following others, we must determine what is in the best interests of the European people, the European economy.

“I think this is a good basis,” said Mr Orbán, adding that the topic of the specific measures “is another matter.” 

He recalled the idea of strategic autonomy raised by French President Emmanuel Macron which – in his view – requires neutrality in economic policy. Hungary proposes that Europe should follow its own interests, rather than those of the United States, China or Russia, he pointed out. 

Concerning the new rapporteur on Hungary in the EU, he recalled that the European Commission had never instituted such proceedings against Hungary; it was the European Parliament that did which is “per definitionem a political body.” “It’s pure propaganda,” he observed.

In response to a question related to compliance with the decisions of the European Court, he said it is an obligation, but it is now a significant problem in Hungary. Hungary has always accepted the decisions of the European Court, “we implemented them even when they hurt,” he recalled.

Now, however, we are in a trap, he said in reference to the court’s decision related to migration, pointing out that the ruling adopted by the European Court is completely at odds with the Hungarian Constitution, and we must find a solution to this situation. “Yes, we have found ourselves in a tight spot,” he said in summary. 

By his account, Hungary does not at all agree with the approach adopted to migration in Brussels and Strasbourg, and therefore resists. However, sooner or later, we must find a compromise, a path that leads us out of this. 

He added that there would always be Member States that disagreed with the common migration policy and would not be in a position to comply with the decisions of the Commission or the Court. 

He said a common decision is acceptable with the proviso that they should give an opt-out to Member States which are unable to follow the mainstream because this will otherwise ruin the European Union. This is why he is happy, he said, that the Dutch, a founder of the EU raised the possibility of an opt-out. 

Regarding the “giga-fine” imposed on Hungary due to its migration policy, he said talks with the European Commission had come to a halt. 

As to when bus services transporting migrants will start, he said everything has its own time which is not so far off now, it will happen. They respect the European rules, if someone applies for asylum in Hungary and wants to go to Brussels, they will help them, he added. 

Concerning the criticisms levelled at his “peace mission” and whether he feels isolated in the EU, he said it is impossible to be isolated in the EU. There are such dreams on the Left, but this is not possible, he said, recalling that when attempts were made to isolate Austria, the very intention became an object of ridicule. 

He highlighted that the beginning of the Hungarian presidency had been a great challenge. Two options were on the table, the first one being that the Hungarian presidency should be bureaucratic in its nature. However, he decided to regard it as a political presidency, fully respecting the relevant legal boundaries. He believes that this is legitimate, and while it is not easy, he is still within those boundaries. 

We have a very amicable approach to the EU, he said in answer to another enquiry. The EU consists of nation states; there is no such thing as a citizen of the European Union. There are Italian, French, Hungarian and Dutch citizens, they must be represented, this is not a hostile approach, but in fact a perfectly normal attitude, he pointed out. 

In answer to a question relating to the conditionality procedure, he said they want to come to an agreement. There are good examples, at present, there is some EUR 12 billion on Hungary’s account which can be built into the Hungarian economy on an ongoing basis, he said, indicating that he sincerely hopes that there will be further agreements. 

As regards the Erasmus and Horizon programmes, he pointed out that they would like to come to an agreement with the Commission about Hungary being re-incorporated into these possibilities. At the same time, however, we set up our own system and we like it, he stated. 

He recounted that instead of the Erasmus programme, they had created the Pannónia Programme, while Horizon, too, had been replaced with a research programme of Hungary’s own. 

It would be better to finance all this from EU funds, he observed, and dismissed the fact that Hungarian students are not given EU funding as ugly blackmail. 

In answer to a question regarding his relationship with Russian President Vladimir Putin, he said “he is the President of Russia and I am prime minister of Hungary, that’s the relationship.” 

They are keeping Romania and Bulgaria’s Schengen membership on the agenda, he said, answering another question. He said they are not far from a decision now, only one country opposes their accession; however, a unanimous decision is required. He will do everything he can in order to convince everyone that Romania and Bulgaria’s Schengen membership would offer the EU considerable advantages, he stated. In his view, the two countries are ready to protect the external borders. Instead of not letting them in, they should be given much money to reinforce the external borders, he laid down. 

In answer to a further question, he said the Hungarian economy is highly transparent as regards relations with the Russian economy, and Hungary tries to cooperate with Russia on issues that do not come under EU sanctions. According to his information, since the war broke out, western countries have purchased energy carriers worth USD 8.5 billion from Russia. 

What we are doing is perfectly transparent; what the others are doing is duplicity. Stop criticising Hungary,

he said.

Mr Orbán confirmed that there will be no migrant camp either in Vitnyéd or anywhere else in Hungary. At the same time, he mentioned the EU’s migration pact, based on which Hungary would be required to create facilities suitable for accommodating up to 8,000 migrants in a place where the number of migrants stands at zero. We do not want to build such facilities, and so in this respect we can always expect cacophonies, he observed. 

In the context of the MBH loan provided for the Spanish Vox party, Mr Orbán said he only focuses on politics, and does not concern himself with who gives a loan to whom; that is private business. 

The Prime Minister also spoke about the fact that in some countries campaign funding is a strange affair and as a result, parties are compelled to take out loans. In Hungary this is the other way around, if a party wants to run in the elections, they receive funding from the state budget, he explained.

In continuation, he said in some countries certain parties have no access to credit. The Prime Minister pointed out that he did not want to engage in national debates, but asked the question: Is this fair? 

Mr Orbán said if someone wants to come to Hungary and borrow from a Hungarian bank, the government has no influence over that transaction because Hungary is a free country. 

In connection with a ceasefire in Ukraine, in answer to a question, the Prime Minister recalled that in July he had conducted talks in the interest of peace. These talks revealed that both the Russian and Ukrainian leaders are convinced that time is on their side, and so they do not want a ceasefire or peace, and this is bad for Europe. As the warring parties are not prepared to take any steps, international efforts must be made to push the parties continuously towards talks, he explained. 

According to Mr Orbán, the majority of people in the world are pro-peace, while Europe is pro-war, or to put it more politely, Europe believes there is a longer path leading to peace. 

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