At the event held on the occasion of the Day of Hungarian Entrepreneurs, the Prime Minister expressed hope that businesses would prove to be successful, and this would then result in the country’s rise, meaning in a further increase in the public’s welfare. He added that it was the responsibility and task of political leaders to make arrangements that would help turn the private success of businesses into the success of the whole country.
“We have a government which believes that a rising tide lifts all boats,” he said.
The Prime Minister further said while entrepreneurs are motivated by profits and expect a private profit from business transactions – and “this is how it should be, it’s called ‘market’ and ‘private property’” – the motivation of politics is to turn the functioning of the economy to the benefit of the nation.
This is also true if we talk about one and the same transaction, he indicated, referring to the re-acquisition of Budapest Airport which, in his view, is a business transaction for entrepreneurs, and an issue of the national economy for the government.
He stressed that while according to communist economics, private profit and public profit, private interests and public interests are necessarily opposed to one another, according to civic economics, rather than being opposed to one another, one assumes the existence of the other, meaning that public benefits can only come into being through private profits.This then turns into cooperation; class peace instead of class struggle, he said.
The Prime Minister summed up in four points how the private interests, private profits and business transactions of entrepreneurs contribute to the furthering of public interests.
The most important contribution is the fact that entrepreneurs give people jobs. Additionally, entrepreneurs pay taxes, thereby contributing to the common expenditures; entrepreneurs are able to stabilise the functioning of the Hungarian economy with their capital; while the fourth important contribution lies in the fact that if Hungarian entrepreneurs did not operate businesses, foreigners would do so, and the profits would be taken out of the country.
He warned that we must not believe the fairy tale that money has no smell. “The owner does,” he observed, adding that it is not irrelevant at all whose hands the money, the capital is in.
He recalled that he had learnt in 2008-2009 that as soon as banks had started drying up in Europe, the foreign banks present in Hungary had immediately started repatriating their funds in order to be able to finance their businesses at home. From this, we drew the conclusion that 50 per cent of the banking system must at all times be in national hands because we will not otherwise be able to ward off such and similar crises, he indicated.
The Prime Minister evoked the memory of Sándor Demján – who died five years ago – together with whom they conceived the idea of the Széchenyi Card, among others.
By his account, he learnt two things from the tycoon, the first one being that without national self-esteem there is no Hungarian success.
Mr Demján also demonstrated that there was such a thing as left-wing patriotism with which the Right, too, was able to find ways to cooperate.
The other important thing is that it is only worth engaging in business activities which others consider impossible. The incumbent government, too, regularly engages in nothing but impossible endeavours, and also did so in 2010 when it made plans for the management of the then crisis: to simultaneously increase the size of the Hungarian economy, to achieve a higher rate of employment, to cut the sovereign debt back, and to reduce tax burdens all at once. All liberal textbooks say that these things can only be done one at a time, he recalled.
“We tried, and we succeeded,” he said, looking back, highlighting that since 2010 the GDP has trebled at nominal value, they have increased the number of people with jobs by 1 million, and taxes have been cut by 41 per cent in total, but the goal remains to reduce them even further. Regarding the sovereign debt, he said, thanks to the finance minister, by 2019 we had managed to reduce its level to 65 per cent, and following a reversal due to Covid and the war, “the cart is heading in the right direction again,” by the end of the year, the sovereign debt could fall to below 70 per cent.
He also added that the country’s exposure had never before been as low in terms of the sovereign debt as it was now; in contrast to just 4 per cent in 2010, 22 per cent of government securities are held by members of the Hungarian public, “and with this we are record holders in Europe,” he stressed.
The idea of the policy of easterly opening, in actual fact, originates from Sándor Demján, Mr Orbán said, looking back, recalling that in 2009 they travelled to China together in order to make contact already from an opposition position.
Mr Orbán also said in the future we must avoid the traps of lending, energy prices and consumption.
He pointed out that we had succeeded in avoiding the trap of energy prices in the case of members of the public, but for businesses they were a significant burden. He said at its latest meeting the government decided on a EUR 10 price reduction, the relevant measures will be implemented soon, and next year they would like to “induce” further energy price reductions for businesses so that they can preserve their competitiveness.
He added that the government was unable to avoid the trap of lending on its own. While they are trying to move in the direction of interest cuts “with methods bordering on the powers of the central bank,” this does not change the fact that in Hungary the fixing of the interest level falls within the remit of monetary policy, and the owner of that area is the central bank.
In the classical debate that exists in every modern market economy about whether there should be higher interest rates bearing the consideration of security in mind or lower interest rates enabling investments, the government is always on the side of entrepreneurs and the economy because it has a vested interest in growth and increased lending. This requires lower interest rates, he stressed.
Mr Orbán further said when the government is unable to achieve results because the central bank keeps interest rates high, they try to help entrepreneurs with credit programmes. He mentioned as examples the reindustrialisation programme, the factory rescue programme and the export subsidy programmes in which Hungarian businesses were able to take part.
Regarding consumption, he agreed with President of the Hungarian Chamber of Commerce and Industry László Parragh that consumption will only return to the old level at a slower pace. “The Hungarian is the sober kind,” and when he does not consume, it means that he saves money, the Prime Minister said, adding that as there is money in the economy and even this year, in a difficult year, new earnings have come into being which the people have saved, “rather than consumed” – accounts clearly show this – there is a healthy life instinct behind all this.
He highlighted that it is not the duty of the government to tip people off the path of normal thinking with artificial means. At the same time, neither is it good when people’s caution stems from unjustified fears; they must be dispersed.
Mr Orbán said today there are more unjustified fears concerning the future of the economy than reality would warrant. Therefore, the government must cautiously, but clearly send out the message to members of the Hungarian public that 2024 will be a year of hope, he stated.
The Prime Minister spoke about the fact that also in the economy there are fetishes, myths that we would do well to review from time to time to determine whether they are still true.
In his view, the myth that in the European economy an EU Member State is unable to get by without EU funds has dispersed.
The facts that they have warded off the obstacles of 2023, that growth will evidently return in 2024, and that in the meantime “not a penny” of EU grants has been disbursed to Hungary clearly show that it is possible to organise an economy by relying for growth solely on one’s own resources or funds raised on a market basis, instead of or without the usual European financial transfers.
This does not mean, the Prime Minister said in continuation, that we will not collect “the few billions” that Europe owes us, but it is important to have self-confidence in the Hungarian economy. The Hungarian economy has recently – in 2022-2023 – proved that it is able to achieve results even in the absence of politically motivated financial transfers, he pointed out.
According to the Prime Minister, the current crisis – which we are slowly coming to the end of – is not cyclical in its nature.
He said this crisis is connected to a major rearrangement process in world politics and in the world economy which we would do well to bear in mind.
This is about the fact that the things that we got used to in the past will not work in the future as they did before the crisis. The economic balance of power is changing, new technologies are emerging, and in the sectors of these technologies the traditionally leading, western civilisational advantage has disappeared. We can see in these new industries also in Hungary that eastern technologies are challenging their western counterparts, he pointed out.
Mr Orbán added: this means that the technological rearrangement will bring with it a new era in information technology, a transformation in automation and digitisation, and a new era in energy, too.
In the future, we will store energy completely differently than we have done to date, he said, projecting that the world economy will become more balanced in these new industries, East and West will take part in this race with more or less the same weight.
He underlined that Hungary must find its place in this great transformation. Different sectors will become important, different sectors will yield higher profits, and rivals will come from elsewhere.
In order to become a winner of this transformation, with the assistance of entrepreneurs, we must connect to these new technologies, and must supplement our network of relations with eastern contacts instead of just western ones, he stressed.
In summary, the Prime Minister said easterly opening is not a self-interest of politics; it is in the best interests of the Hungarian economy and the entrepreneurs operating it that Hungary should pursue a foreign policy committed to cooperation and connectivity.
At the same time, he indicated that the government was “only able to pave” this path; it “will not go down” that path, that is the task of entrepreneurs.
He also said there is a major debate in the government about how to determine the areas which will be the future’s most profitable sectors. He described the green economy and green energy, including nuclear energy, as such. He indicated that they were announcing calls for proposals worth tens of billions of forints for both businesses and families in these areas.
He said the second most important area is logistics; in his view, in the coming decade in the Hungarian economy, great opportunities will open up in logistics, in addition to green energy. He stressed that in the coming ten years, infocommunications, the defence industry, the food industry, the pharmaceutical industry and the automotive industry would also be among the most important sectors offering opportunities of growth from the respect of the national economy.
He encouraged entrepreneurs to cooperate with the government, and to continue to table initiatives and proposals for the government.
At the end of his address, the Prime Minister wished Hungarian entrepreneurs “massive profits, large revenues, an abundance of workers, and successful sailing on new, as yet uncharted waters.”