Good morning, Ladies and Gentlemen,
You can see that there’s no meat left on the bone: I’m in a comfortable position, because the Minister of Finance, the Governor of the Hungarian National Bank and the President of the Chamber [of Commerce and Industry] have already covered all the important points. Before telling you the few thoughts that I’ve prepared for this meeting with you today, I’d like to react to a few things that have been said.
The first is the relationship between the Central Bank and the Government. It is important to state that the independence of the Central Bank is fully guaranteed by both the Hungarian constitutional system and the conduct of the Government. However, independence doesn’t mean that we don’t work together. In Hungary the Church and the state are also separated from each other, with the Constitution specifically stating that they shall operate as separate entities.
But this by no means rules out the possibility of their working together in the pursuit of common goals. The situation is the same with the Central Bank. I would like to thank the Central Bank for its efforts, because if the Central Bank and the Government don’t cooperate, then the real economy and the financial sector inevitably become separated – as has happened before in Hungary, with the real economy paying an extremely high price. The Governor of the Central Bank always refers to Austria, and this is a great philosophical debate which runs through Hungarian literature and the history of Hungarian political thinking: what should we measure ourselves against? Two answers have been offered: one is to measure oneself against oneself, and the other is to measure oneself against the universe – and in this latter case the universe is represented by Austria. One is inclined to accept the practice of making comparisons with Austria, because this is an old rivalry, and we’d at least like to achieve a draw. At the same time one accepts that one must somehow measure performance, and that in doing this it’s not only important to measure the data, but also to interpret the result. This means that it must be compared to something, otherwise it’s impossible to speak sensibly about either economic or political performance. Therefore this comparison is justified, although here I would also like to make a comment of an anthropological nature: what I most like about the Hungarians is what makes us different from those to the West of us. In a skirmish between hatchet-wielding irregulars and gentlemen soldiers in powdered wigs, I’m on the side of those with the hatchets. And I also prefer the villas of the lower nobility to the Kaiser’s palace. Nevertheless, this is an important matter, and the two presentations you have heard clearly highlight the two different types of thinking that economic policy must be built on. Both of these must be represented, as comparison with the Austrians clearly indicates. There must be the type of thinking about the economy that we’ve heard from the Governor of the Central Bank: one which is innovative, courageous and original, and which sets ambitious goals. There must also be the way of thinking represented by the Minister of Finance, which is extremely sober, has both feet firmly on the ground, analyses processes on a daily basis, continuously monitors the public purse, and which can protect the Government from dangerous adventures. If these two approaches aren’t both present, then we’ll either become dreamers – which will lead to trouble – or we’ll get bogged down in a reality with which we’re not satisfied – since that’s precisely what we want to change. So it’s very important for both these ways of thinking to be present, and to skilfully combine them. It mostly falls to me to ensure that these differing approaches are somehow blended to lead to the results described here today by the previous speakers.
After this I would also like to add a comment to the presentation given by the President of the Chamber: the general rule in politics – at least as I see it – is that one is never clever enough on one’s own. This does not contradict the principle that you also know: that when truly difficult decisions come along, one always has to face them alone. I’m sure that this is not only true in politics, but also in business: leaders are in some ways lonely, and ultimately they are the ones who must have the final say one way or another. They are also the ones who must shoulder the responsibility. But this must not be confused with solitary thinking – that is not a good thing. Decision-making brings with it a certain loneliness, but that must not be the case with thinking: one is never clever enough on one’s own – particularly if the question is the fate of a whole country and a whole economy. So one must also bring in – as I try to do – the thoughts of various intellectual centres of power. This is why we place great importance and value on our agreement with the Chamber, which will soon be entering its second decade, and for which I would once more like to thank you. I encourage the Chamber to continuously bombard the Government with ever more suggestions and ever more observations, and not to hold back if you think that one of our measures was either not properly discussed, or has had the opposite effect to that which we envisaged. Please indicate these to us, because we’re still very far from being able to say that the Hungarian economy is perfect. It has many faults, and we’re happy to be able to hear your observations on how to remedy these. Before coming in here this morning I spoke about such issues with the leaders of the Chamber and the invited speakers.
Ladies and Gentlemen,
Now I’d like to continue with my planned text. First of all, I’d like to talk about what we’ve already achieved. Bearing in mind who’s in the audience, I have to be very careful, so I’d just say that what we’ve achieved is quite something. Among businesspeople I wouldn’t dare say anything more than that, because you have your own way of looking at things, which I understand: I’ve yet to see a figure that couldn’t be increased, and obviously there’s no such thing as a profit that couldn’t be one forint higher. Clearly your thoughts are focused on how to increase the profits of your own businesses, and so you can never be entirely satisfied with the situation – even if an objective assessment using historical comparisons supported recognition of the results achieved. So I’ll speak cautiously about the results and what we’ve achieved.
In addition to the figures which the previous speakers spoke about, our goal was to pursue to its logical conclusion the insight that in the European and world economy the 2008 financial crisis was not a cyclical one. This was the starting point for everything that we have done since then. This has been the key insight. In an intellectual sense, the key issue is whether or not we think about the 2008 crisis as something that periodically recurs in the world and European economy: whether it was something cyclical in nature that happens from time to time, that would rise again just as it had fallen, with the global and European economy bouncing back to where it was before the crisis if we simply carry on undaunted, employing the usual methods. Our assessment was quite different: it was that in fact a realignment in the world economy is under way which presents Europe with serious consequences and major challenges. We concluded that we could not hope to find our way back to where we were before the 2008 crisis if we Europeans – including we Hungarians – continued to do everything just as we had done before. Our starting point was that we must not put our hope in such an approach. Based on the conclusion that the crisis was not cyclical – and that therefore Hungary would have to be transformed and renewed, as we set about doing in 2010 – we intellectually sought to answer the question of what form Hungary should take, what our vision for its future should be in order for it to achieve competitiveness within a foreseeable timeframe. By 2019, for example. This was the challenge, and our answer to this question was that we should create a Hungarian model.
People talk about this at the level of political communication, but not in sufficient depth. While I don’t have time now to dig deeply either, I’d still like to turn over the topsoil. This Hungarian model comprises on the one hand an economic model, and on the other a social policy model. While there’s absolutely no need for me to talk here about the latter, I will do so to help you understand the wider context of our economic policy. The essence of the social policy model is that first of all balance must be created in the relationship between communities and individuals. So one shouldn’t have all the profits going to an individual, and all the burdens being borne by the community. These must somehow be shared. We must find a healthy balance between freedom and responsibility for the community. If you read the new Constitution, you can see the aim to achieve just that.
The second social policy element of the Hungarian model is that we must re-establish our Christian cultural foundations. I don’t want to talk about Christian democracy now, but here I’d like to pause for just a moment and remind you that one should not be afraid to say that the Hungarian model is one that is based on Christian democratic ideological foundations. The starting point for the Christian democratic political approach is that the Government has no competence with regard to issues of faith, such as eternal salvation or damnation. In politics this is not the substance of Christian democracy, and these issues do not fall within our remit: they continue to exclusively be a matter for churches and religious communities. The essence of Christian democracy is the need to protect the ways of life rooted in Christian culture which form the framework of our everyday life, and which recently have been weakened. Such fundamental concepts rooted in Christianity are: the human dignity of the individual, which we must protect; property and free enterprise, which we must also protect; the family, which we must protect; the national community as another entity that we must protect; and naturally we must also protect faith communities – which are partly lay and partly ecclesiastical. So when we say that from a social policy point of view the Hungarian model rests on the re-establishment of Christian cultural foundations, this means that we must re-establish and strengthen the human dignity of the individual, property and free enterprise, the family, the national community and faith communities.
I didn’t need to speak about this, but have done so to provide some background. After this I’d now like to say a few words about what the Hungarian model means in the economy. In the economy the Hungarian model primarily means that at all times finances must be in order. In Europe this is not general practice, and Hungary has not always pursued this path. However, I am in one hundred per cent agreement with the Central Bank Governor and the Finance Minister that the starting point for all our economic achievements is that our finances must be in order. If they aren’t, the rug will be pulled from under our feet, a much larger part of the profits that can be made in Hungary will end up abroad, and we’ll be left with less of what we’ve worked for. Therefore it is in the interest of all of us for the financial situation to be stable, and for finances to be in order. So when it comes to the finances we must not allow any looseness. What do I mean by looseness? The best examples are budgets in election years. If you look back, you’ll see that in every election year – right up until 2014 – the budget ran out of control. I’m very proud of the fact that 2014 was the first election year in which the budget deficit didn’t increase. I believe this is a major achievement, and adds weight to what I’m going to say about financial discipline. And then we got to 2018, when you’ll recall that there was a fierce election battle; no one should be deceived by the resulting two-thirds majority – it was a major battle. In 2018 the budget deficit fell in comparison with the previous year: something which was unprecedented, and which serves as compelling proof that finances must indeed be in order. This means that in the future we must continue to keep the deficit below three per cent, that sovereign debt must continue to fall, and that all of the latter must end up in Hungarian hands. I agree with this, the schedule for which will be set by the Finance Minister, while its direction was determined by the Central Bank Governor. Indeed as regards sovereign debt I believe – although right now it may seem more like a fantasy, like catching up with the Austrians in any department – that eventually we must be lenders, because it’s always better to be a creditor than a debtor. We must seek not just to repay our sovereign debt, but to make enough money to be able offer credit to others. Let’s not abandon this goal.
In addition to finances, the second element of the Hungarian model is the replacement of a benefits-based economy with a work-based economy. And we must make it very clear that we must stay on this path: there shall be no social assistance without personal effort. If we give money without asking for a personal effort in return, our economy will be ruined; and in this regard I can see many sad examples of this in Europe, together with unfavourable prospects. We must learn lessons – and we must learn not only from those who are better than us: we must also learn from those who are worse than us, to see what mistakes we must avoid. Therefore I think that we should only provide assistance if in return we ask people for meaningful, acceptable and fair personal effort. I believe that this is well illustrated by the public works programme. Another good illustration of this is that families will only receive their family allowances if they send their children to school. It is well illustrated by our willingness to provide free nursery school places to children from the age of three. And the Constitution also states that adult children are obliged to take care of their parents: so the Hungarian Constitution states that not only is it a constitutional obligation for parents to take care of their children, but also for children to take care of their elderly parents. I believe that all this is more or less part of the intellectual current which determines that the Hungarian economic model must be work-based and not welfare benefit-based.
The third element of the Hungarian economic model is the family support system. I would emphasise the broader significance of this in relation to what we were able to see in the Central Bank Governor’s presentation. The number of children being born and respect for the family are not just monetary issues, but are far broader and more complex. This is why we must create a family-friendly Hungary. Today we are not a family-friendly Hungary. Of course now we’re talking about family support, and it’s true that as a percentage of GDP Hungary has the highest family support in the whole of Europe. But if we examine our attitudes to mothers, if we examine whether we give them priority in our services, whether state administration accommodates the rhythms of their lives, or how much your businesses take into consideration the needs of those raising children, then I have to say that Hungary is far from being a family-friendly country. In addition to money, a great many other changes must also take place. But with the family support allowances we would like to reach that position, and the important underlying principle of the Hungarian model is halting demographic decline. Current science states that for this we must reach a fertility rate of 2.1, while at present our rate stands at only 1.5. However, when we look at this figure of 1.5 we can also say that we started from a base of only 1.2. So all is not lost, but we’re still a long way from where we need to be. I should add to this that across Europe – including Hungary – life expectancy is increasing; and so fewer people are leaving us. In my view this special situation means that it will be possible to halt the demographic decline with a fertility rate of somewhere around 1.8, rather than 2.1. Thus the decline can be temporarily stopped, but after that we will need to reach the figure of 2.1.
The fourth pillar of the Hungarian economic model is full employment. In this area the ones to beat are the Czechs, who are the best. In Hungary unemployment is 3.5 per cent, while in the Czech Republic it’s 2.6 per cent; that’s the number we should be chasing. But the numbers are deceptive, and I think that here the situation is better than at first sight, because our figures don’t include students in employment or those who continue working beyond the official retirement age. If we take these into consideration, I think that instantly we can lay claim to the title of a country with five million workers. After all, if an active worker retires tomorrow, but agrees with his or her employer to stay in work, he or she will receive a pension as well as a salary, and will only have to pay 15 per cent tax on the latter. This means that if someone continues to work beyond the retirement age they will effectively have two incomes: their existing salary and their pension. I think that there can be no doubt that this will prove attractive to at least some people of retirement age who are fit and able to work. And given that you need workers – indeed experienced workers, and experience and age go hand in hand – you will find them especially valuable, and sooner or later they will also appear in Hungary’s employment statistics. So the goal that Hungary becomes a country with a total population of ten million and a working population of at least five million doesn’t appear to be unrealistic.
The fifth pillar of the Hungarian economic model is an industrial paradigm shift. If you fail to modernise your operations, you’ll go out of business – it’s as simple as that. If the rising trends in pay that we’ve observed recently are reliable indicators and your wage costs increase at this rate, and if you’re unable to respond to this challenge in some way – either by improving efficiency or through innovation – then some Hungarian businesses will go bankrupt. So in terms of the future of your businesses, all of you here today are facing a very important life-or-death challenge. Hungarians perform well under pressure: we’re not so good if the danger is a distant one, but if it’s at the gates we Hungarians show our competitive spirit, and immediately raise our game. I want to warn you that this pressure on us already exists, and pay rise data confirms it. An industrial paradigm shift, however, will also bring about another result, which we’ve expressed here as a plan we hope to achieve: the ability to deliver a growth rate of 2 per cent above the EU average. At the same time, we must face a very important fact: in the future there will be no dramatic increase in Hungary’s dimensions and population. We only want to admit guest workers in limited numbers, on a temporary basis, and only in sectors where there are labour shortages. This will be an intellectual challenge for all of us: we will have to face a future in which we will number around ten million, with five million of us working. Full stop. But as we’ve just heard, the sources of an extensive growth will soon be exhausted, and from that point on further growth cannot come from new entrants to the labour market or increases in working hours. So there will be no economic growth unless those in work do their jobs at a higher level of quality, more competitively and using better equipment in working conditions that are better organised by you. If everyone who is able to work is already in work, from that point on there will be no new workers to generate economic growth. So growth will have to come from somewhere else. We must prepare ourselves for the reality that these ten million people are the Hungarian economy. But, in parallel with European Union policy, we can expect to see the emergence of diverse economic structures in the border regions, as the European Union supports regional cooperation schemes and cross-border cooperation. So something could emerge in the border regions, which are still dividing zones and where I believe there are untapped labour reserves. People who do not live in the territory of Hungary could become involved in the Hungarian economy – even people on the other side of our borders who are not ethnic Hungarians. So in the border regions we could see the emergence of mixed Serbian-Hungarian, Romanian-Hungarian and Slovak-Hungarian business formations. I think that we have an interest in this, because it could supply us with some source of economic growth. Incidentally, in the future the Hungarian state will spend a lot of money on this, as will the European Union; and so we are expecting enhanced growth in the border regions.
And finally, the sixth pillar of the Hungarian economic model is that we must value what we are good at – and there are indeed a few examples of these. First of all, farming is in our blood, farming culture, and keeping such things in order. I’m not just talking about agriculture, but also about keeping our own properties in order, making sure that what is ours or entrusted to us is in order, and that the latter is productive in some way. These instincts are very strong among Hungarians, and we can clearly see their economic advantages in agriculture. So we must not underrate agriculture, nor the food industry that is based on agriculture. We’re knowledgeable in that area, and we’ve always been strong in it. We’ve also always been good at sport, and we must be able to use our investments to turn our achievements in sport into a sports industry; this is possible. Culture has also always been one of our strengths, so we must develop a cultural industry. The best example of this is what was achieved by our friend Andy Vajna; may he rest in peace. In effect he turned our talent for making films into a film industry in Hungary. This is now much more than simply culture: it generates an annual revenue of more than 100 billion forints for Hungary. This means that we can do business even in sectors which are not primarily business sectors, but in which we are strong – such as sport, culture and tourism; and clearly the tourism and hospitality industry falls into this category. So while of course we’re talking about an industrial paradigm shift and “Industry 4.0”, we mustn’t forget about what we’re really good at, and take advantage of the business opportunities it offers.
Allow me now to say a few words about what lies ahead. First of all, I believe that the nature of the growth that characterises Hungary today will remain the same. The first such feature of Hungarian growth is that it is 2 per cent higher than the European Union average, and we can sustain it. Growth is obvious, and so it greatly limits any damage from debates focusing on it which aim at political destabilisation. This is because what some are trying to claim in Hungarian politics today – that everything here is bad and nothing is developing – is greeted with complete incomprehension, as no one in their right mind would say such things. They could say that we could develop more, and perhaps not quite in this direction; and they could say many other things. But no community in Hungary today can accept the proposition – intended to be politically destabilising – that Hungary is not growing. Thirdly, there is every chance that – as sociologists say – our growth will become inclusive: that it will involve everyone. For the sake of simplicity, in a political sense we could translate this by saying that everyone will be able to take a step forward. So this is about more than only a section of society – say the top third – making progress, but about everyone being able to take a step forward. This is being borne out by the data relating to poverty. The changes in the situation of the Roma population clearly indicate this, and I hope that positive results will also emerge from what we are now turning to: the attempt to revive villages which have seemed to be on their deathbeds. So growth will remain inclusive, and therefore I am sure that with this growth and development we will gradually eliminate poverty in Hungary.
So what lies ahead of us? We have five or six goals for the period extending up to 2030. The first is to be one of the five countries in the European Union with the highest quality of life: in general, at home and in the workplace. This is not only to be measured in GDP figures and living standards; it also relates to environmental standards, orderliness and security. In a multidimensional sense, by 2030 we want to be able to say – without provoking the cynical reactions we hear today – that we are one of the five most liveable countries in Europe.
Our second goal is for Hungary to become one of the five most economically competitive countries. We are not as far from this as we think we are. From time to time we can see global competitiveness indicators about various economies, and how they attract new working capital. In this department Hungary is in a favourable position – even by global standards. It is not an unrealistic aim for Hungary to become one of Europe’s five most competitive economies within ten years.
The third goal is to halt demographic decline, and I’ve already spoken about this.
Our fourth goal is to rebuild the Carpathian Basin, both physically and economically. The Carpathian Basin once formed part of the formation that was the Hungarian state. The world has changed, and today the Carpathian Basin is occupied not by a single state, but by a number of states. In my view this leads to a single conclusion: in the Carpathian Basin – which continues to be a geographical and economic unit shared by a number of states – we must cooperate with one another, and must jointly strengthen the wider region that is the Carpathian Basin. In it there will be a place for Slovaks and Serbs; there will be a place for Romanians; and there will naturally be a place for Croats, and also for us. Fundamentally, in a physical sense, the rebuilding of the Carpathian Basin means that we should finally extend our motorways at least as far as our state borders, and link these territories together. This is what we must realise. After all, it is shameful – and all of us appreciate what I’m saying – that currently the only countries we can enter on a motorway are Austria and Serbia: not Croatia; not yet Slovenia or Slovakia; not to mention Ukraine. So while the Carpathian Basin forms a natural space for us, the projects and developments needed to occupy it and live within it have not yet been implemented, and this will need to happen by 2030. Energy independence. By 2030 we must achieve energy independence: we need Paks [Nuclear Power Plant], and Paks must be developed; the use of green energy – especially solar energy – must undergo a massive increase; and we must achieve a change in the sourcing of fossil fuels. The latter means that the gas extracted by the Romanians must be made available to Hungary by a pipeline running through Hungary; and it is especially important that the twin of Nord Stream – which was once called South Stream, but which is now called TurkStream, and which will transport Russian gas to Europe while bypassing Ukraine – should be built and run through Hungary. If all this comes to pass, and if we can come to an agreement with the Slovenes – which we are close to doing – on building a gas pipeline towards Italy to access its LNG terminals, then, regardless of the bickering with the Croatians over the fate of their terminal, Hungary will be able to access a Mediterranean LNG source through a pipeline.
The fifth point and goal is that once we have completed our plans for the Carpathian Basin, we should also turn the entire Central European region into a genuine economic region. In addition to the Carpathian Basin, this includes Poland, the Czech Republic, Austria, Bavaria, Northern Italy, Slovenia, Croatia and Serbia. This is the region from which the bulk of European growth will come in the next fifteen to twenty years. If the numbers I’ve seen are correct, in the next year or two economic growth in the traditional Western European territories will stagnate at somewhere around half a per cent to one and a half per cent, while in our countries the average growth will be closer to four per cent. This clearly indicates that this is an economic region where we can do business. And this involves one of the most important projects which we have requested from the Central Bank: a strategy for outward investment. Just as János Martonyi wrote back in 1991–92, in the heyday of privatisation, in the long run it is untenable for foreign companies to play an enormous role in Hungary and make enormous profits – which is also in our interest: they will not re-invest those profits indefinitely, because no one re-invests all their profits; at the end of the day, they make profits to claim for themselves, and sooner or later they will take those profits out of Hungary. This is happening every year. Prime Minister Babiš has said that the European Union Member States which through the EU budget provide us with development funds – which I see as nothing more than compensation for our disadvantageous competitive position, which enables them to take such profits out of Hungary – take some fifty billion euros out of the four Visegrád countries annually. One can complain about this – and I hear it a lot in politics – but that’s not enough: we need to respond. The situation is that today the Hungarian economy is not yet able to achieve its own goals without working capital from abroad: we need foreign investment, technologies and an industrial paradigm shift; everything that we’ve heard about modernity is partly linked to foreign investment, which means that we need it. Indeed we must compete for the creation in Hungary of factories which represent the highest possible added value. But the consequence of this is what we’ve just spoken about: the amount of profit taken out of Hungary will increase. So what can we do? First of all, we must pursue economic policy that induces foreign businesses to re-invest some of their profits here. But this won’t mean that we’re out of the woods. Unless we want to deprive Hungary of foreign investments – which I’d advise against, as it would lead to a drastic fall in living standards – there is just one answer, only one possibility: we must invest at least as much money abroad as foreigners make in Hungary. And we must bring back here from abroad at least as much money as they take from here. So we must enter the global economic competition. As we’ve heard, however, businesses in Hungary are under-capitalised; the Central Bank Governor spoke about the fact that this situation stretches back one hundred years. So we need a programme: we must raise funding and capital for Hungarian businesses which are prepared to invest outside Hungary, which are prepared to create investments abroad which we hope will be profitable and will enable us to raise further funds – as Western businesses do in Hungary. This is the global competition. We cannot shut ourselves away from it, and I wouldn’t suggest that. Only one option is open to us: entering the contest, and achieving at least a draw in this match. We should bring back home from abroad at least as much profit as is taken out of Hungary. For this we need a programme. I asked the Governor of the Central Bank to develop such a programme, and to see how we could move in this direction by combining the means that are at the disposal of the Government and the Central Bank. So much for what lies ahead of us.
Now I’d like to say a few words about the V4, because we should not simply consider Hungary on its own, but as part of an ever-strengthening Central European cooperation. Here I’ll quote some figures to enable you to see that this is not just a political project, but a genuine historical process with an economic body. The first thing we should recognise is that the combined population of the V4 countries is 64 million: 12 per cent of the total population of the European Union. This is a respectable figure. Growth in the V4 is around 4 per cent; the E28 average – which includes our own 4.1 per cent – is just 2.1. The V4 countries account for 10 per cent of total EU exports, and 10.3 per cent of total EU trade. I only mention these examples to help you appreciate that Central European cooperation is now already much more vital and significant than we tend to think – at least those of my generation who still look upon ourselves as poorer countries. But in the meantime thirty years have gone by; and as these Central European countries have risen, so a number of EU countries have started to decline, and the distribution of power has shifted. So the V4 countries have good reason to be self-confident both in a political and an economic sense.
Now I should say a few words about migration in an economic context. Now I don’t want to talk about how much money migrants take through our welfare benefit systems, because that is a very “ground floor” approach, although a necessary one: one must also live on the ground floor. But instead I’d like to speak in a wider context. The situation is extremely serious, and as far as I can see the seriousness of the situation has still not fully sunk in. Of course we’re regularly accused of talking too much about this issue here in Hungary, while people in Western Europe spend less time talking about it. That is their problem. It hasn’t sunk in over there yet; but even here in Hungary I don’t think we’re able to grasp the gravity of the situation in all its seriousness and with regard to its full consequences. I’ll give you some figures now: some unremarkable figures. I am in my fifty-sixth year. In terms of life expectancy, I could still have another twenty-five years in me. This would mean that I’ll still be alive in 2045. Someone who is forty today will still be alive in 2060. Those who are twenty today – who could be our children – will still be alive in 2080. And today’s ten-year-olds – who could be our grandchildren – will live to see 2090. So when not only I but many of us talk about what impact migration and immigration is having on Europe and make reference to the future, it might not affect very much of our own lives. But what meaning is there to our own lives if not to have children and grandchildren? And what could be more important to us, especially as we grow older, than ensuring that the people that we’ve loved in this life – our children and grandchildren – will be as safe as possible? A Hungarian child who is ten today will still be alive in the world of 2090. I know that democracy carves political thinking into four-year periods, because we must win elections; but we must not subordinate everything to four-year thinking, because historical processes are taking place which we call immigration and migration, and which will completely transform the world that we know and live in today. We need to evaluate what is happening today from the viewpoint of the 2050s, 2070s, 2080s and 2090s. This is the time horizon according to which we should interpret what is happening – especially as what will happen in those future periods will be a consequence of what is happening now. Those who fail to take action today and fail to protect themselves will not be able to do so in 2050 or 2060. By that point in time the changes in the world will have arrived in their own countries, their own cities, their own villages, their own neighbourhoods. I don’t want to go into the specifics now, but these are issues of such gravity that I ask everyone to view the matter through this lens. In this context I ask you to consider why Hungary and the Central European countries – which have not yet been responsible for such problems or errors – must continuously give the highest priority to the issues of the composition of our populations, our cultural identity, our national independence, preservation of our Christian culture and protection of our way of life. From time to time these issues may irritate a businessperson, because they have to focus on day-to-day business issues, and sometimes politics focuses on other things. But believe me, our economic successes will be meaningless if the businesses you leave to your children and grandchildren are inherited in a world in which life is not good. In Hungary and Central Europe, in the region which bears this responsibility, we must now very firmly and very clearly pursue such a policy.
Ladies and Gentlemen,
This will change all of politics, both in Hungary and across Europe. So far there have been right-wing and left-wing parties, Europhile and Eurosceptic parties. Over the next few years the entire world of politics – which will also influence your lives – will move both in Hungary and across the whole of Europe towards a situation in which the political forces will fundamentally be either anti-immigration or pro-immigration. There are those, for instance, who strive for a United States of Europe and who want to place Hungary within it – which means adopting the political outlook within which we will be placed. Everyone who wants a United States of Europe represents pro-immigration policies and champions a Europe completely transformed by immigrants. At the same time, there are those who say what we say: that we are pro-Europe, we want a strong Europe, but within Europe national independence is important; not only must the EU be strong, but so must the Member States themselves – and the decisions we adopt on the issue of immigration must be respected even by those who have chosen a policy that is different from ours. We believe that those who share our view, those who love their country, are able to create a future for Hungary: only such forces will be able to create a future for the life that we live today. So the issue of immigration is very closely linked to your business success – or, more precisely, to the meaning of your business success.
Ladies and Gentlemen,
At the beginning of the year we gave my colleagues four large tasks. The first is the preparations that Secretary of State Katalin Novák is carrying forward in order to achieve a demographic turnaround. Mihály Varga is working on creating the conditions for GPD growth of 2 per cent above the EU average, and he’s pointed out that we’ll be discussing this in April. In vocational training Minister Palkovics must effect a brave and radical transformation – or a continuation of the changes that have occurred to date. And then there is the preparation of the outward investment strategy, in which we look forward to cooperation from the National Bank. These four big projects are being launched, and I expect the Government to be able to make strategic decisions on them as soon as possible.
And finally, if you will permit it without seeing it as interfering in your affairs as business leaders, I’d also say a few words about what awaits you as successful businesspeople and successful leaders. Today we are on an upward trajectory. I have to observe the Hungarians, so I look at what they are thinking, what they are doing, what they want, and where they want to go. Here are some of my observations, which I’d like to share with you. You work with the same “raw material”, and I think that over the past few years, in your companies also, Hungarians have proved – not only you as leaders, but also workers in your companies – that they are talented and hard-working. This is the source of our results. But when they’re doing well Hungarians tend to behave differently from how they do when they’re not doing well. Currently we are entering a period in which we’re beginning to do well, and at this point some qualities will emerge which I believe you will need to take account of. I’m in a related discipline, so I’ll also need to take account of them.
Knowing ourselves, the first thing we’ll have to take account of is that we tend to take success for granted. I’ve been following wage negotiations: people have been talking about pay rises of 4 to 5, 10 or 20 per cent as if it were the most natural thing in the world to increase wages by 10, 20 or 30 per cent. So let’s not forget that when Hungarians enter a successful phase, they tend to believe that success next year can be taken for granted, because the previous year was successful. I recommend the policy of keeping both feet on the ground – because otherwise we’ll generate expectations which you, the Hungarian economy and Hungarian politics will be unable to satisfy.
The second thing we should pay attention to is that when they’re successful and have proved their talent, Hungarians tend to loosen their grip. I wouldn’t say that they sit back and relax, but as soon as they’ve clawed themselves out of a difficult situation somehow the discipline so characteristic of them in times of trouble begins to evaporate. And now as we need to change over to an intensive economy, our worst characteristic is that in moments of success we loosen our grip. We’ve now reached a successful phase, but to remain successful we must undergo an improvement in competitiveness which will demand an improvement in the quality and intensity of work. We should convince Hungarians that this makes sense – and indeed that it’s necessary.
The third thing is that at times like this – I see this in government, but I believe that it is the same in business – we start postponing any moves outside our comfort zones. So when things are going well and we’re successful, we know that we should make a few changes, but such changes would take us outside our comfort zone and lead to conflict and restructuring. Therefore we postpone them – as, after all, things are going well. I’ve been a prime minister for a total of thirteen years, and I’ve observed that this is a recurring phenomenon – which I already noticed back around 1999 to 2000. So we must prepare for the extra effort needed to convince Hungarians that, while things are indeed going well, we need change – because things will not be going well tomorrow or the day after tomorrow.
And finally another characteristic of the Hungarians is that when things are beginning to go well team spirit weakens. When we are in trouble we somehow pull together, but when things begin to go well everyone starts gently and gradually wriggling open a little more space for themselves. Suddenly individuals start to see themselves as “somebody”, and start to ease open an individual space for themselves. This then leads to unnecessary conflicts, which damage our work and ruin the atmosphere. We who are responsible for leading the country – you in the economy and we in politics – will have to pay close attention to the phenomena that I’ve just described. We all recognise them, because I think that your own everyday experience confirms that this is what we should expect in the period ahead. We are looking forward to a period of very important decisions and hard work. In closing, I would like to say that the reward for our joint success in recent years is that we must work even more; because if we stop pedalling our bicycle, it will fall over.
Thank you very much for your kind attention.
