Menu
Good morning, Ladies and Gentlemen.
When I was young, under the other system, I was taught that sausages are delicious, but you should not try to see how they are made. And this is true for any serious and robust negotiation process. There have been big battles here recently, for two reasons. First, for its part the Government is not in control of these negotiations. Our understanding can be summed up as follows. There are two important players in the economy: those who provide work, and those who do the work. They have their representatives, they are elected, they have a democratic mandate, and it is good that the Government’s role in wage negotiations is as small as possible. Where we come into the picture is that it is not always possible to bring these two groups representing different points of view – employers and workers – to a position that is close to agreement within a short space of time. This is when government help is needed. The usual way of doing this is to ask the Government to take money from the budget to make an agreement – that is, to ask the state to reduce the amount of tax it collects in order to make certain wage increases possible, because then it is easier for employers and workers to reach an agreement. This is where we come in. But I would like to underline that we do not want to change our conviction on economic policy: the most important issue in the economy – the issue of wages – should be agreed by those who run the economy. This role cannot be taken over by the state. We do not intend to do so in the future, but we are always happy to play a part in such an agreement being reached.
Another reason there have been big battles in the negotiations is that the European economy is in a very difficult situation, as for three years we have been living in the shadow of war. The entire European economy – but Hungary in particular, as a country neighbouring Ukraine – is suffering as a result of the war, which has dragged the European economy down. As the previous speakers have said, there is high inflation and subdued growth – in other words, the war is taking its toll, and it is taking a heavy toll on all the players in the European economy. Before the current negotiations, the big question was how to imagine the year 2025. Because imagining 2025 as a year of war would result in us making an agreement different from that when we imagine it as a year of peace. This has put Hungarian economic policy – and not only the Government, but all the players, employers and employees alike – in a strange position, because it is an external factor that ultimately determines the path that the Hungarian economy can take. If Europe continues to imagine its future in a context of war, this will have obvious consequences for Hungary. If, on the other hand, the world economy and world politics take a turn in the direction of peace, this will open up wider opportunities for Hungarian economic players. This is why we had to wait for the US presidential elections. It may sound strange – and perhaps particularly strange coming from a sovereigntist head of government – that we gave such decisive weight to an external circumstance, but in a time of war it could not be very different. So let us be pleased that today this agreement which we have been able to sign here with the lady and gentlemen is based on the concept and the idea that the world – and Europe within it – will succeed in making 2025 a year of peace, and that we also envisage the economy developing along the lines we would expect in a year of peace.
Therefore the Hungarian government believes that economic growth of more than 3 per cent is realistic in the coming year. There are always doubts. During the negotiations we also included a revision clause in this agreement, because if the world does not turn this way, then the agreements will have to be amended accordingly. But everyone accepted that this agreement should be based on an optimistic scenario, on a peace scenario. I also congratulate both the trade unions and the employers, because any negotiation of this kind – and this is particularly important in a Hungarian state that is a thousand years old – requires state leadership ability. It is not only the parties governing the state that need state leadership ability, but also the trade unions and employers. What I mean by this is that of course everyone fights for their own interests, but everyone must recognise that we can only realise our own interests if we do not destroy the whole. So if trade unions and employers do not have a national mindset, and if they break up negotiations and make excessive demands, then a situation can arise in which one party or the other does well, but together we all do badly, we all lose out. It is therefore very important that – despise the fact that employers represent employers and employees represent employees – there is a national commitment to the whole from both employers and employees. And I would like to thank you for the fact that this is not the first such agreement, but the latest of many. Alongside the intense debates about numbers and the representation of interests, in these negotiations I always find that there is always the thinking that we must not conclude agreements and make demands that may be good for some, but will be bad for the Hungarian economy as a whole. I cannot think of another phrase for this except “national consciousness”, and it always manifests itself at a special moment when we conclude these negotiations and are able to sign the agreements. After all, we are all simply Hungarians, and no one can make progress without Hungary making progress. I respectfully thank the parties to the agreement for their understanding of this.
All that now remains is to implement the agreement. This will not be easy. So I think that in their own spheres both employers and employees have to do a great deal to make this wage agreement happen. This wage agreement contains a 9, 13 and 14 per cent wage increase over three consecutive years, and it will not be sustainable if we simply keep working the way we have been working up to now. So behind this figure lies an improvement in efficiency and productivity, and the assumption that if the Hungarian economy performs at the speed it did last year and the year before, it will not be able to make a profit and will not be able to pay the 9, 13 and 14 per cent wage increase. This means that company management, stakeholder representatives and the workers themselves will have to contribute more to economic growth than in previous years. And I am glad that the trade unions believe that this is possible and that employers believe that there is room for it.
Ladies and Gentlemen,
If we put this agreement in an international context, then it has to be said – as the leaders of the trade unions and President Mészáros, who spoke on their behalf, said – that this is an agreement of historic proportions; because it also puts the minimum wage in a European context, so to speak. This is worthy of us. So somehow Hungary has to be positioned in the top half of the table, where those at the top are still visible. So we have to be at the front of the chasing pack, with the chance of catching up with the best. This wage level puts us in a position where that goal, that desire, is not unrealistic. I can also say that this includes an unprecedented increase in the minimum wage. I do not recall a minimum wage increase on this scale in recent times. If I add up the three years of increases, this represents a 40 per cent increase by 2027. In fact, if I look for something like it among similar wage agreements in the European Union, I find that across the whole of the European Union there has only been one example in the last thirty years of a country agreeing to a minimum wage increase on this scale. According to our intentions and calculations, which include projected inflation, the real value of the minimum wage increase will be 29 per cent. Furthermore, the plan that we announced earlier, that the minimum wage will reach half the average wage, will be achieved – or we will at least be very close to it.
Ladies and Gentlemen,
After the two very difficult and troubled years we have just had, the year 2025 – if it is a year of peace, and if we can implement these agreements – could be a fantastic year, because economic growth could exceed 3 per cent. Coupled with this is a public investment boom. We have not discussed this with the trade unions and employers, but they all know about it, because they are familiar with the ongoing debate on the budget. In the budget there is a very substantial public investment programme. Over the coming year three hundred new investments will be launched in Hungary, with a total value of 8,100 billion forints – of which 450 billion forints will flow into the economy in 2025. And in the year ahead, in 2025, the biggest and most important investments of recent decades will reach the end of the construction phase and start producing results: the Budapest–Belgrade railway line will be completed, and we will also hand over huge factories in Győr, Szeged and Debrecen. These represent huge capacities that will enter the Hungarian economy in 2025. This is all well and good, but it is a matter for the big fish.
Yet the biggest winners from this agreement are not the big fish, but the small fish: workers, employees, and also small and medium-sized enterprises. This is because the employers insisted – rightly, in my view – that alongside such a wage agreement there should be a serious programme to develop small and medium-sized enterprises. So I think that we would not have been able to conclude this agreement from the employers’ viewpoint if the Government had not announced our programme to support small and medium-sized enterprises through the Sándor Demján Programme. We estimate that this will provide Hungarian businesses with 1,410 billion forints in funding. And even though it was not a precondition, I think the agreement’s path was smoothed for the trade union side by the fact that we will introduce a new institution that we have never seen before: the workers’ credit scheme. This will help young people in work, who are represented by trade unions, to stand on their own feet – and hopefully get their own places to live. This is not part of the agreement, but I think another factor that moved the trade unions towards the agreement was that we managed to agree with employers that they can give their young workers a monthly allowance of 150,000 forints per month to rent or purchase accommodation – on easier terms and with a derogation from general tax conditions. So, looking not only at wages but also at the economic policy measures linked to this wage agreement, we have tried to put proposals on the table that address issues that are both close to the heart of trade unions and long-standing demands and claims from workers. So, all in all, although we are talking about a wage agreement here, it cannot be seen in isolation: this wage agreement will only work and have a beneficial effect if the whole economic policy programme – let us say the new economic policy – that we are announcing for 2025 is itself successful.
Ladies and Gentlemen,
I would like to speak in an even broader context. In 2010, when we formed the national government, our most important – or for many, perhaps, the most enduring – commitment was to create one million new jobs. The ladies present may not remember this, because they are young, but the older gentlemen will remember it well – and they will remember the noisy reaction to it. After all, we are Hungarians, we can be both enthusiastic and sceptical at the same time, and we can be sceptical about even the best things. I remember the doubts surrounding this idea, centred on whether it was really possible to create one million new jobs in ten years. And the facts show that it was possible. This has not been due primarily to the Government, although we can report that we were also responsible for the result; but it was mainly due to the agreements that we have been able to broker on an ongoing basis with the unions and employers. What we are saying now is no less ambitious: the Hungarian government is of the opinion that we must achieve an average income of one million forints within the foreseeable future. This statement, our target, our commitment, is today accompanied by the same doubts and the same debates as existed when we announced the programme for one million jobs. There are undoubtedly uncertainties, just as there were linked to our commitment back then fourteen years ago. I am pleased, however, that we have partners who do not rule it out in advance, but who think that time will tell, and that if we can deliver on these wage agreements, if we can implement the minimum wage agreement, we all know that this will have the overall effect of increasing wages – and then we can get there. There is a big question as to whether the Hungarian economy can generate this income, and there can be – and are – debates and doubts about this. But I would like to signal that the Hungarian government is at the disposal of the employers in particular to take measures that will enable Hungarian businesses to operate their companies profitably, even at such wage levels. So in my view Hungary can do this if we all want to do it, if we all want to achieve this goal.
In conclusion, Ladies and Gentlemen,
I am confident that the revision clause will not be necessary, because our macroeconomic expectations will be met, and this three-year wage agreement will be fully implemented as it stands, without any renegotiation of the details. Perhaps I owe you one more thing here. On behalf of the Government, I must also thank those who have been involved in these negotiations, because that has been the task of the Ministry of Economy and the Ministry of Finance. I thank Minister Márton Nagy and Minister Mihály Varga. When we now talk about a new economic policy starting in January 2025, in other words the end of the war period and the start of a new economic policy that can be implemented in years of peace, this will also be accompanied by changes in economic governance. These will also affect the two ministers I’ve just mentioned: a swansong for one of them, and a fine overture for the other. So congratulations and many thanks to the ministers for their work. My wish for those who have signed this agreement is that we can fully implement what we have put down in writing.
Thank you very much for your attention.
