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Mr Orbán stressed that the two conditions of a successful economic policy – a treasury and a ministry of economy that are able to manage the situation and a chamber serving as a basis for the country’s economic policy that is able to cooperate well with the government – were in place, and so he was optimistic with respect to the economic policy of the two years ahead.
He pointed out that, at the same time, it was the duty of the prime minister to ensure that simple, common-sense considerations should not disappear from that economic policy.
The Prime Minister mentioned four such items over which he must “stand guard.” In his words, the first “simple, common-sense pearl of wisdom” is that it is always better to be owed than to owe others. The second one is that you must always earn more than you spend. The third criterion is that it is better to work than to just hang around, while the fourth tenet is that it is better for you to make money on others than for others to make money on you.
He took the view that as regards these simple tenets identified on the basis of the criteria of common sense, as regards the cooperation of the minister of the economy and the Finance Ministry, and as regards cooperation with the chamber, the conditions of a stable economic policy are in place.
He said Hungary is, for the time being, struggling with an inherited, very high debt rate which increased from 52-53 per cent after the elections lost in 2002 to above 80 per cent. From there, the government brought it down, then due to the coronavirus pandemic it increased again, and now, the government is struggling with it once more. “What matters is that we must reach a point […] where we lend money to others, rather than others lending money to us,” he stressed.
Regarding the deficit of the budget, he said at this point in time, we are spending more than we are earning, while in the context of Hungary’s employment data, he highlighted that “if we don’t work, we’ll die of starvation,” and so it is necessary to concentrate all our strength on convincing people that working pays off. In his view, the figures show that in this department the government is not doing badly.
He added that up until 2020, “things were moving on a rather clear, straight, successful, ascending path,” but then the pandemic and the Russo-Ukrainian war “fell upon us.” He said between 2020 and 2024, Hungary has been undergoing years of “changing down a gear,” but there is a chance, in his view, to change up a gear again from 2024 onward.
According to the Prime Minister, the real economy has survived the period between 2020 and 2024 without major difficulties, and the reason for this should be sought in the fact that they allowed both people and businesses to make money. In his opinion, another reason is that instead of an approach “translating an economic policy that slavishly imitates, copies the West into a primitive formula,” Hungary started thinking in terms of a system of relations encompassing the entire world economy. While the West took a stumble, the eastern leg of the country’s system of economic relations continued to flourish, he said.
Mr Orbán also said at present, Hungarian investors are in fourth place in their own country, an achievement that should be duly appreciated as they started from a low point, and this is an interim station of a process of improvement.
The Prime Minister said the retailoring of the world’s economic and political map has gathered momentum, and the world’s western and non-western parts see everything in a way that is diametrically opposed.
He mentioned as an example the Russo-Ukrainian war which the West, with the exception of Hungary, jumped into head first, while the rest of the world does not want to commit to either side, or to stand for a pro-Russian position. The Prime Minister said the East and the West also see the conflict in Taiwan differently, and this is true – with some reservations – of the situation in the Middle East as well.
In Mr Orbán’s view, this means that geopolitical rivalry also overrides the logic of the market, and effectively, technological development, too, is determined by political criteria.
He said it is not irrelevant how this debate concludes: one option is – which has many robust advocates in Western Europe – decoupling, meaning that the West should detach itself from the rest of the world economy and should try to protect itself because rivalry with the East poses the threat of the West losing the territories it controls, even including its own internal markets.
He added that based on the other way of thinking – characterised by connectivity, the coupling of East and West together – it is true that the West is losing ground, but the reason for this is that it is not competitive enough because if it were, then it would not want to stop the advance of the East with political means, but rather in economic competition.
He said Europe does not truly believe that it is able to induce internal changes with a view to the enhancement of productivity and efficiency that would raise the competitiveness of western businesses to the level of their eastern counterparts.
Mr Orbán said if the Cold War returns, meaning that decoupling prevails, then the border of East and West will lie at Hungary’s eastern border, and “we will become a dusty, twilight periphery of the western world that effectively no one cares about.”
If there is cooperation and trade, then Hungary is between two worlds as a country which finds its own opportunities in both worlds, he explained, adding that Hungarian economic policy “is betting on” succeeding in maintaining this state of in-between two worlds.
He added that it was clear that Hungary was a part of the West, but neither should it detach itself from the eastern part of the world. Hungary is a member of the Turkic Council, cooperates with China, and neither do we want to surrender economic cooperation with Russia, except in areas where this is ruled out by the European sanctions, he laid down.
Mr Orbán described the inevitability of the rearming of Europe as the first conclusion of the Russo-Ukrainian war.
We do not know how much longer the Americans will stay here in Europe, and we are unable to provide the security we need from our own resources; this is why accelerated defence industry developments are taking place everywhere, he warned.
He recalled, however, that the Hungarian people’s instincts had worked well because already 3 to 4 years before the outbreak of the war, Hungary had embarked on a development project in its defence industry on a previous unprecedented scale. As a result, we are 2 to 3 years ahead of everyone else. Politics is sometimes a realm of intuitions, not only inevitabilities, and this is equally true of green transition and the development of the defence industry, he stated.
Mr Orbán stressed that this was “a proxy war,” and it was perfectly evident that the West would not win this war against the Russians. However, this is also true the other way around, and so there is a single solution: sooner or later, there will be peace talks, he added.
The question is whose side time is on. We are the only country that says that time is on the Russians’ side, and so we have a vested interest in this conflict being brought to a conclusion within the shortest possible time, he pointed out.
In continuation, he said, regrettably, the majority of countries in Western Europe believe that time is on the West’s side. This is an interesting line of thought if one sits on the shores of the Atlantic, but not in the Carpathian Basin, he said.
He stressed that the main tenet of Hungary’s security policy was that there must always be an entity between Hungary and Russia; at present, it is called Ukraine.
From a Hungarian point of view, the main question of the war is whether the Russian border comes closer to us or not, he said, adding that if the war continues, thanks to Russia’s military successes, the border will move closer to us.
This is utterly contrary to our best interests, while at the same time, we are convinced that there is only one way to avoid this: if the West pulls itself together and tries to achieve a situation involving peace talks, the Prime Minister stated.
In his view, this will not be so simple as it would have been a year ago because at present the military situation is clearly in favour of the Russians.
Meanwhile, Europe is facing the threat that Russia will eventually only be prepared to engage in talks with the Americans, and the entire European security architecture will depend on a Russian-American agreement, he added.
Therefore, the direct security environment does not look bright, and so “for Hungary – rather than mindless gambling – betting on President Trump’s return is the only common-sense option,” he said.
Only a new player can find a way out, someone who had no part in the outbreak of the war – he took the view – adding that a political change in the United States is the only chance of the world for a relatively swift peace.
Therefore, for Hungary, it is not a question of sympathy – whom we like or do not like; for us, the question is which president could bring about a foreign policy that could strengthen Hungary’s security, he stressed.
We cannot interfere in the kind of president that the United States elects, but in the incumbent US administration we do not see the ability to create a swift peace, something which is also crucial for the Hungarian economy, he pointed out.
Mr Orbán said the elections in the European Union will be of the utmost significance from the viewpoint of reason.
He highlighted that the European political scene could be summed up in that there are the globalists and federalists on one side, and those in favour of sovereignty on the other. But it can also be summed up in that today politics is ideology-driven in Europe, and the biggest problem is that those who occupy the most important positions are typically left-wing, ideologically driven people, and they adopt decisions accordingly, the Prime Minister said.
An ideological mindset is unable to maintain a balance between theory and practice, the Prime Minister said. “Ideological thinking driven by desires overrides reality,” and decisions are adopted, including in the areas of climate policy and agricultural policy, which may seem correct from a theoretical point of view, but which destroy us, he said.
Therefore, we need the present ideologically driven left-wing governance to be replaced in Europe by a right-wing political course that has more respect for reality and builds its economic policy on reality, Mr Orbán stressed.
He indicated that there will be a right-wing shift in Europe in the direction of common sense under any circumstances; but whether there will be a breakthrough or a minor shift in the balance of power is something that we do not know yet. He added that, from a realistic point of view, we can expect a shift in the political arena.
In his address, the Prime Minister also spoke about Hungary’s regional cooperation schemes. He recalled that for a long time, they had been thinking in terms of a V4 structure with Poland, the Czech Republic and Slovakia – which we must not abandon, “there is still some life in it” – but we must explore other opportunities of cooperation among pro-sovereignty states.
In this endeavour, in addition to Hungary, the Slovaks and the Serbs have also emerged, while elections will be held in Austria in September. As a result, there may well be an Austrian-Hungarian-Slovak-Serbian cooperation scheme during the period ahead which, rather than replacing the V4, will appear side by side with it, the Prime Minister said in summary.
Speaking about Hungary’s profit balance, Mr Orbán said it is improving, but is still not what it should be. Today, foreigners still take EUR 4 to 6 billion of the profits made in Hungary out of the country, but if there was a ban on the repatriation of profits, there would be no investments, he explained.
According to the Prime Minister, there is one single solution to this problem of openness: namely, if Hungarian businesses generate enough profits with their investments abroad to compensate for this.
He said today, on average, foreign investments make EUR 1.3 to 1.5 billion. If we add to this the excess transfers we receive from the European Union in the magnitude of EUR 1 to 1.5 billion, then it is EUR 3 billion for Hungary and EUR 4 to 6 billion for foreign businesses.
From the respect of the future, Mr Orbán said the top priority is to support national holdings which are able to generate profits abroad and to bring them back to Hungary – thereby improving the balance of profits – referring to companies such as Mol and OTP as well as to the sectors of real estate, infocommunications and the defence industry.
If there are grants and financing available for investments abroad and if there are businesses with competitive products and services, they must invest, or else the profit balance will never be restored in our favour and we will always be “left with a sense of having been robbed, of having been exploited,” the Prime Minister observed.
Regarding the reduction of the deficit of the budget that has increased to 6.5 per cent, he said a number of different criteria must be combined when they determine its schedule because the government does not want economic growth to stop, does not want to withdraw funds from the economy, does not want to jeopardise the already achieved standard of living, and does not want to take a step back in the systems of child support and the reduction of household energy bills.
Confirming Finance Minister Mihály Varga’s words, he said it is the government’s intention to reduce the 6.5 per cent deficit in 2024 to 4.5 per cent, to 3.7 per cent next year, and to 2.9 per cent the year after. He also drew attention to the fact that the European Union is only just returning to properly regulated economic operations from the post-coronavirus “stupor,” and according to the council of EU finance ministers, they will give every country four years to adhere to a deficit of the budget below 3 per cent again and to return to a sovereign debt of less than 60 per cent.
He indicated that if for any reason Hungary failed to adhere to this schedule, there is a further “buffer year” available to do so without the risk of sanctions from the European Union.
In his opinion, these goals can be achieved, though he also observed that “there is a loophole regarding every overarching EU goal,” given that if a country undertakes to implement major structural reforms, they have seven years to return to these target figures. At the same time, “we don’t trust the Brusselites so much as to build our fiscal strategy on this, and so for the time being we should stick to this 3+1 extra-year solution.”
In his speech, the Prime Minister said we must also answer the question of what happens if “we lose our bets,” meaning that the outcomes are not those desired by the government either in America or in Brussels, and we are only able to reduce the deficit of the budget at a slower rate.
He said as a matter of principle, they make no Plan Bs, but we must prepare for such eventualities: except not with plans, but with attitude.
He recalled what he read in a book about the 1848-1849 freedom fight where a commander in Szekler territories is told by his reconnaissance people that they had been surrounded completely. In response, the commander tells them that this is the best news ever.
“And why? Because in that case we can attack in every direction. That’s Plan B,” Mr Orbán said, concluding his speech.
