Prime Minister Viktor Orbán’s speech at the event held to mark the presentation of the 250,000th Széchenyi Card
7 September 2017, Budapest

Presidents, Governor, Ladies and Gentlemen, Secretary General,

I am here to greet you on behalf of the Government. So many things have been said that I’d like to briefly comment on them, and therefore if you will allow me, this will not be a conventional address, but you should regard what I’m about to say – together with all the untidiness it necessarily entails – more as an expression of respect.

First of all, I’d like to thank you for the opportunity to be here once again, at the presentation of the 250,000th Széchenyi Card. I thank you for this because, if I remember correctly, it was in 2011 that we gathered to mark the presentation of the 150,000th card. This is a good opportunity to remind ourselves that in 2011 winds were blowing from a different direction. Regardless of political views, and even though we were following the lines of an agreement made with the Chamber in 2011, many experts and others may well have had understandable doubts and questions over whether the path that we chose in 2010 would produce something, or whether the risks were too great and our efforts would fail. We should just remember how different those winds were then. In 2011 we had to deal with the challenge of avoiding financial ruin. We had to deal with a rise in national debt that seemed unstoppable – and here I’ll mention the Széll Kálmán Plan, in passing; we had to deal with curbing unemployment, which stood at over ten per cent; on the international scene – in Brussels for instance – we had to fight a battle on the Constitution and our new constitutional order; and in order to restore our financial sovereignty, we had to send the IMF packing, thanking them for their cooperation up to that point in time. So those were the battles in 2011. And now if we think how far the Hungarian economy has come over the past six years, since the presentation of the 150,000th card, and look at how many issues and questions have proved to be good working solutions, I can say that although only six years have passed, in those few years we have moved forward by an entire era in economic history. To quote the speeches delivered at that time, when we handed over the 150,000th card, we also said that every Széchenyi Card would serve us as a foothold in the creation of a new economic model, as back in 2010 we set out to do nothing less than design and create a new economic model. The last six years has seen the emergence of one hundred thousand such footholds, and so it is little wonder that we have maintained our balance throughout. The success of the programme could not be summed up any more succinctly. In addition to looking back over our success, it is also important to make it clear that, while there are many people here who acted as “midwives” in the birth of the card, and there are many of us here who did a great deal in order to make this programme successful, we haven’t gathered here to congratulate ourselves. This is a temptation, and there is a theory that self-praise is so important that we can’t possibly leave it to others. The general situation in Hungary today supports the importance of this statement. But on this occasion we haven’t gathered to praise ourselves, but in order to praise the ideal that brought us together. Because, as President Parragh and Secretary-General Dávid have also mentioned, in Hungary there is still much debate over whether one can make more progress in the jungle of the economy through united action or as a lone warrior. This is a very difficult question, and today we’re celebrating the ideal that while there may be times which favour the lone guerrilla, there are also periods when all the conditions exist for the success of our united efforts. So here today we’re celebrating the ideal of working together, the ideal of cooperating and the ideal of uniting our efforts; and we see the success of this ideal in everything that has been said so far.

The core of my political philosophy – and today this also coincides with the core of the Government’s philosophy – is that you can never be smart enough on your own. This is a very important thing in politics. Many people believe the opposite to be true: that, at the end of the day, only one person can be right. But this is not so. The truth is that you can never be smart enough on your own. This card also provides proof of this, because this card, the idea of this card, could not have come from the head of any single individual. Even if the underlying idea had come from a single person – even a minister or financial executive, the governor of a central bank, or indeed a prime minister – they would not have been able to turn it into a viable system. In order for it to become a viable system we needed to see the necessity for a great deal of knowledge to be aggregated, so that something could come of this, enabling it to succeed. The Hungarian government today seeks to obey this law – the law that one can never be smart enough on one’s own – by ensuring the construction of a system which gathers from the community of economists all the economic knowledge that it needs. This is a system in which we incorporate input from economists into government decisions. This system relies on two pillars: we harness the financial system’s knowledge, intellectual strength and professional capabilities through the research institutes and groups of analysts operating within the Central Bank; and we gather our knowledge on the real economy from the Chamber. I can confirm that this will remain the case in the future, as this arrangement has proved to be successful, and so in the future before every important economic policy decision we’ll continue to rely on the financial sector’s accumulated knowledge, as well as on that accumulated in the real economy. I’d like to thank both the Honourable Governor and the President of the Chamber.

When we presented the 150,000th card, public discourse and the international perception of Hungary revolved around the word “unorthodoxy”: whether one should opt for unconventional solutions; whether there is still truth in the received wisdom that one should not abandon the well-trodden path for an untrodden one, or whether one must somehow find an untrodden path if the well-trodden path no longer exists, as it has disappeared from under one’s feet. We laid our bets on the latter, and at the time many people expressed surprise that unorthodoxy – a policy encouraging departure from the well-trodden path – had many supporters in Hungary. I believe that the Széchenyi Card reminds us that this phenomenon is not specific to 2010, as the card itself is a manifestation of unorthodoxy, and we didn’t invent it in 2010. If the banking sector in Hungary had been able to function in a favourable environment for sixty to seventy years – as had the banking sector in Western European countries – products of this type would probably not have sprung from the cooperation between the Chamber and the Government, or the idea wouldn’t have sprung from Sándor Demján’s head. If that had been the case, the banking sector’s normal functioning would have developed tools to resolve the problems which Hungary was unable to resolve without resort to the Széchenyi Card. So there is a kind of unorthodoxy, and in Hungary’s economic policy the search for unusual things is not specific to 2010, as it was already present in 2000 and 2001.

If you’ll allow me, at this point I’d like to digress. Today there is also a political debate over the economy in Hungary which is rather inferior in quality, but is all the more widespread for that. There’s no close correlation between quality and prevalence: something not only true of inferior products, but also views. This debate is about the claim that the Hungarian economy is only growing as a result of funding from the European Union. I mention this now because in 2000, as far as I remember, EU funds were not available, as we were not yet a member of the European Union. Despite this, we somehow managed to drag national debt down to 53 per cent. For a period of six months our economic growth was 6 per cent, and we managed to make use of products which boosted the development of the Hungarian economy. I dismiss the argument I mentioned as unsophisticated and inferior because, if the Finance Minister’s figures are accurate, the Hungarian budget amounts to around 18,000 billion forints, while net annual EU funding is somewhere between 1,000–1,500 billion forints. These two amounts amply demonstrate that we must not allow anyone to ascribe our current economic policy achievements to external factors, because if we do, we’ll lose a very important source of stimulus: that arising from the success of the work we’ve accomplished. It is our success as Hungarians that today the Hungarian economy is working, that it’s on a steady course, that the national debt is falling, that the budget is in order, that we’re financially stable and showing economic growth. These things are not attributable to external factors and external assistance, but to you, the players of the Hungarian economy – whether you participated in the life of the Hungarian economy as employers, workers a governmental players. It doesn’t come from outside, it is not supported by external props, but comes from our own efforts. And the relative financial amounts I mentioned demonstrate this well: on the one hand funding from outside, and on the other the enormous figure of the Hungarian budget.

Ladies and Gentlemen,

I made some subtle references to the history of this card not always having been untroubled. Now I’ll be more direct. I remember the period after 2002 – to refer back to a conversation here – when everything that began with the name “Széchenyi” was suppressed. So I’d like to offer KAVOSZ my congratulations on the Széchenyi Card’s greatest achievement: that the card survived the change of government in 2002 and managed to stay alive even in the following anti-entrepreneurial environment. This is indeed an enormous achievement. This is what laid the foundations for today’s success. This is a programme which survived even the eight difficult years under which Hungary laboured between 2002 and 2010. Inevitably this in turn made it necessary for the new government entering office in 2010 to give this programme a new boost.

And progress cannot be made without the great warhorses. The name of Sándor Demján deserves mention. He is associated with the statistical fact – that perhaps the President of the Board of Directors of KAVOSZ mentioned – that this programme’s centre of gravity lies outside our capital city. As the process of midwifery started with an exchange of views between Sándor Demján and I – he’s from Etyek and I’m from Felcsút, which are neighbouring villages – it’s no surprise that it led to a programme somehow associated with the backyard of provincial entrepreneurs. But the story is only complete if I mention that most of the credit is due to Sándor Demján, as it was he who knocked on the door and started talking about strange things. This was also the case after 2010. Before I talk about our conversation in 2000, I’ll mention one from 2010, because few people are aware that he also deserves credit for the Job Protection Action Plan. After the elections in 2010 I said “Sándor, we have an agreement – we had an agreement not only with the Chamber, but we also had a six-point agreement with VOSZ [National Association of Entrepreneurs and Employers] – and when the necessary changes are made we should review where we stand in its implementation”. At the time Sándor said that in times of crisis – and in 2010 the European economic system was wracked by a major crisis – the line of thinking I should follow is that uniformity is not mandatory. In that context, what at first sight seemed to be a casual philosophical comment in fact carried great weight. It meant that it was permissible to make decisions which don’t affect all the players in the economy in the same way. A typical example of this is the Job Protection Action Plan, in which we introduced a lower rate of contributions related to certain target groups, rather than normatively or uniformly across the whole economy. This idea, that this can be done, that uniformity is not mandatory in times of crisis, is “Demján’s Law”. That things like this can be done was made possible by Sándor Demján’s encouragement – or at least he made us understand it. When he came to see me in 2000, he said that the following would be needed: a state-subsidised overdraft facility with preferential conditions, available without a requirement for collateral. This was his suggestion. In effect this is what this card represents. The Chamber of Commerce backed this idea. The National Association of Entrepreneurs and Employers did the same. We also managed to win the banks over and gained their cooperation. This has been no small achievement, particularly considering the major bank wars after 2010, and if we project back to 2002 we can clearly see what a great achievement it was then for the banks to decide to back the Government. And we must also mention the name of Finance Minister György Matolcsy, because this programme wouldn’t have worked without the Government’s support as well. Of the four conditions that Sándor Demján described to me, the first one was that it be state-subsidised. And this, of course, cannot be achieved without the Government.

If you will bear with me for another minute or two, I believe that this could also be a suitable opportunity to point out another correlation which I think is still valid today. There is some advantage to growing old, as when one wants to consider some question or other in more depth one can look back over a longer span of time. We too will soon have this opportunity. I can say that in one way or another I have been closely involved in Hungary’s economic policy for thirty years – sometimes shaping it, sometimes opposing it. When I think back over the past thirty years of Hungarian economic policy, I can vividly recall the notions at the beginning of the nineties or in the mid-nineties which gave us encouragement when we faced the dispiriting fact that after the end of the communist system we didn’t stand a chance in competing with our Western competitors or friends in the accumulation of capital. And if we were to enter the European Union with nothing to our name, after the seventy years they had had to accumulate capital, then how would we possibly be able to compete with them? This was the question that tormented us. But we reassured ourselves with one thought – an intellectual thought, unsullied by contact with everyday reality – that while it was true that of course our lack of capital meant that we couldn’t successfully be part of a capital-based economy, we nevertheless would be able to be part of a knowledge-based economy: if we were smarter than our competitors, we could either leave out or substantially shorten the period of capital accumulation in the development of the economy. And seeing communism – with all its distortions – as a work-based economic system, and capitalism as a capital-based economic system, and thinking that in the new era the knowledge-based economy’s time was about to come, we could reassure ourselves that leaving out the interim stage would see us overtaking the others by jumping “from A to C”. The years since then have taught us that this is not possible. At the time this idea may have been consoling, but it lacked reality: it’s not possible to take part in the modern world economy without competition for capital. It is highly unlikely that the Hungarian economy will be competitive if we can’t find the instruments and methods for providing capital to the players in the Hungarian economy. We’re not talking about the large multinationals, because they say they’re fine, thanks, and we’re not even talking about the big Hungarian players because they also say they’re fine, thanks. We’re talking about Hungarian small and medium-sized businesses. Competitiveness will probably elude us if we can’t carry out the enormous political task of designing programmes to provide capital to them which are economically rational and socially just: programmes and solutions that even those outside the world of business can accept.

This card is one of these solutions. This is a slow but predictable method of providing capital, which is also fair. I think it’s important that it’s transparent, with no room for scams: all the data is in the public domain, banks are involved, the conditions are clear, and the payment of taxes is accountable and visible. This is an approach that those outside the business community can also accept: through transparent programmes such as this the Hungarian government supports overdraft facilities for Hungarian small and medium-sized enterprises, the process of providing them with capital which is indispensable for the success of the Hungarian economy; and if Hungarian businesses aren’t successful, there won’t be anyone to provide jobs for those who aren’t businesspeople themselves. Thus the various interests can be reconciled, they can be harmonised, and they can be satisfied. I apologise for speaking at such length, but those speaking before me have said so much that my reflections on their thoughts can be justified.

I would also like to say that, for the Hungarian economy and the Hungarian government, the provision of credit for SMEs is not a market transaction – though we are talking about and celebrating a form of market transaction – but something which is important at the level of nation strategy. There are 700,000 businesses in Hungary, and 99 per cent of them are small and medium-sized enterprises. So the policy of supporting small and medium-sized enterprises is an issue of nation strategy. In 2015 – these are the latest figures I can give you – two million people worked for small and medium-sized enterprises. Two million people! This accounted for 73 per cent of the total labour force. This clearly indicates that without SMEs there can be no Hungarian economy: without them, we can’t function, we can’t live. The SME sector generates more than half of all added value; I think that’s is not bad at all. Yet its contribution to exports is only 30 per cent, which is less than satisfactory. We might have doubts, and some of our calculations suggest it’s only twenty-something per cent, but even if the SME sector accounts for 30 per cent of total exports, I believe that we can regard performance of this sector as low – particularly as it produces 50 per cent of total GDP. We must significantly boost the export capabilities of small and medium-sized businesses in the future. Obviously this is also related to the issue of capital.

Ladies and Gentlemen,

I was told to announce – and the Finance Minister approved the announcement – that the Government will raise the upper limit on all the products in the Széchenyi Programme from 50 million forints to 100 million forints. The long introduction you’ve just heard has in effect merely sought to lead up to this single sentence, and has sought to give it stable foundations. In light of what’s been said, I believe that this can be seen as a well-founded decision. We’re going to raise interest relief on credit facilities from 50 million to 100 million forints, with one exception: the Széchenyi overdraft facility. We’ll do so for all other facilities, and the interest relief will relate to the entire increased sum. We are raising limits on all the facilities, and the interest subsidies will apply to all of them, with the exception of the overdraft facility.

And, finally, I must also express my thanks. I won’t thank those whom you’ve already mentioned several times; so here I won’t mention the various government departments, or the National Bank, but I would like to mention the market players. One doesn’t often have the opportunity to do so, and so I’d like to thank the financial credit institutions, and do so by name. I’d like to thank Erste Bank, MKB Bank, OTP, Sberbank, the cooperative network coordinated by TakarékBank, Budapest Bank, Unicredit, Gránit Bank and Raiffeisen. I hope I haven’t left anyone out. We wish to thank you for having joined us as partners in this great enterprise. And finally, for having placed these funds at our disposal, I must thank Garantiqa Hitelgarancia Zrt., and also the Rural Credit Guarantee Foundation and the Hungarian State Treasury, which managed their funds.

Ladies and Gentlemen,

Finally, allow me to say one more thing about the connection between politics and the economy. There’s a theory that the market is sacrosanct. And this sacrosanct market has something: we don’t know how many body parts it has, but it surely has a hand, which allegedly is invisible and which in the end arranges things for the whole of society in a desirable way. We have never agreed with this. This leads to a profit-centred mentality. We don’t want to deny the need to adopt a profit-centred approach in the economy. We do not expect the players in the economy to act as social institutions or welfare institutions, but to act as hard-headed businesspeople and to adopt a profit-oriented approach; but this is not what we expect of the Government. We expect the Government to appreciate and integrate a profit-centred economic mentality, but to adopt a fundamentally Hungarian-centred approach. What we see here is a successful combination of a Hungarian-centred mentality in economic policy and a profit-centred economic mentality.

I wish to congratulate everyone who has participated in this. God bless those who designed it, those who created it, and those who maintain it. May you continue to benefit from it and prosper in the future!