Prime Minister Viktor Orbán speaks about building Eurasia
10. 11. 2018.
At a meeting of central bank governors in Budapest on Friday, Prime Minister Viktor Orbán spoke about building Eurasia, and the strengthening of economic relations between China and the Central and Eastern European and Balkan countries.

A new multipolar world economy is emerging, Mr. Orbán said, and China is preeminent among its new centres of power. He described the countries of the Central and Eastern European region as emerging centres of power in their own right, and pointing out that over the next five to ten years they will be the economic engine of Europe.

Stressing the importance of strengthening economic relations between the two emerging centres, he mentioned the necessity for a non-ideological approach towards China, in which “We must accept that we are different”, and in which it is accepted that the countries are led in different ways. In his view the task is not to judge, but to find common interests.

Mr. Orbán paid tribute to the seventy years of diplomatic relations between Hungary and China, referring to economic relations between the Central European region and China as a success story of the new era.

Photo: Károly Árvai

With reference to the central bank conference – in which the region’s sixteen countries were joined for the first time by China – he said that it is no longer enough to seek cooperation in the fields of investment and trade: there must also be cooperation in the field of finance.

Speaking about the countries of the Balkans, he highlighted that they are developing rapidly, and that the Central European countries are those which are most committed to EU membership for Balkan countries.

The Prime Minister described China not as a country in a temporary economic growth phase, but as a “fixed star” which will be a major player in the world economy for a long time to come, and whose currency will also have to be reckoned with. He stated that one must prepare for a future situation in world trade in which the dollar has lost its monopoly, adding that Hungary is planning on issuing yuan-denominated government bonds in the future.

Photo: Károly Árvai

“If we issue bonds abroad, we will do so towards the East”, he said, adding that efforts are being made to ensure that the yuan can be used as the currency of settlement in bilateral trade. He stated that this should be seen more as an opportunity than a threat.

The Prime Minister said that knowledge, talent and creativity will play a prominent role in the new world order, and he stressed that, amidst ever fiercer competition for skilled workers, Hungary and the region’s countries want to create knowledge rather than buy it. He said that the goal is ensure that by 2020 the country is spending 1.8 per cent of GDP – some HUF 1,000 billion – on supporting research and development.

Mr. Orbán also spoke about his views on the changed role for central banks in the new world order, emphasising that cooperation between national banks and their respective governments is of the utmost importance. He said that central banks must create financial stability, while governments must strive for political stability, and that this is how crises can be prevented. He also believes that central banks could play a greater role in the development of the economy and trade.

Photo: Károly Árvai

The Prime Minister went on to warn of the possibility of another economic crisis, referring to analyses which indicate a 70 per cent probability of a downturn sharper than that of 2008. In his view every government must therefore have a contingency plan for such an eventuality.

Mr. Orbán also spoke about “trade wars”, pointing out that the United States is seeking to transform trade relations in order to preserve its dominant position. He said that “this war is not our war, but it has an impact on us”, and that therefore good relations must be maintained with all the various parties, with their conflicting interests, and the ability to build good relations will be needed. Hungary, he stressed, must ensure that China, Germany and the United States all have an equal interest in making the country and its region successful.

Photo: Károly Árvai

On the subject of migration, the Prime Minister pointed out that it will change our lives. In his view, the transformation of Western Europe is unstoppable, and therefore if economic conditions balance out and free movement in Europe is maintained, future governments in Hungary will also have to find answers to a number of related questions. He also mentioned that African and Asian demographic indicators forecast ever more waves of migration.

Mr. Orbán concluded by speaking about the possibility for cooperation between central banks and governments. If there is a serious desire to build Eurasia, he said, then Central Europe, the Balkans and China must be connected to a worldwide network, which will require major infrastructure developments – and therefore capital. He believes that central banks should commit to playing a greater role in raising this capital, but they should also help with programmes which serve to develop enterprises. He also noted that central banks could play a greater role in education.