Hungary’s indices show the country’s economic model is viable, Hungarian Prime Minister Viktor Orbán told lawmakers on Monday on the first day of the Parliament’s spring session. The opposition party leaders, however, slammed the government, blaming it for the turmoil over the Budapest 2024 Olympic bid.
All economic policy goals set for 2016 have been met, he said in his speech, which also covered migration issues and the government’s looming battles with Brussels. “Hungarians have worked hard for their achievements,” the prime minister said. “Their work is gradually paying off, irrespective of party affiliation.” Economic growth, a shrinking public debt and big foreign trade surplus as well as record low unemployment and the healthy state of the tourism sector are among the past year’s achievements, he said. Last year Hungary reduced its debt-to-GDP ratio to 74% and the budget surplus in January was at a 17-year high, he said. Orbán said the government’s deficit target of 2.4% of GDP this year was “clearly” achievable. Hungary’s economy grew by 2% last year, he noted, adding that the government targets a growth rate of 4.1% for this year and 4.3% for 2018. He also said 2016 had been a record year for foreign trade, noting that Hungary had generated a trade surplus of around 10 billion euros.
The Hungarian Prime Minister noted in his opening address to parliament that the unemployment rate was at a record low of 4.4% in the fourth quarter last year, arguing that “full employment is just an arm’s reach away”. Putting Hungary’s economic indicators into historical perspective, Orbán argued that Hungary was on the verge of an economic breakthrough. The prime minister said that over the past 120 years, the country’s economic performance had reflected a cyclical nature. Between 1900 and 2010, averaged out, the country’s annual GDP per capita growth rate was never above 1.5%. This left Hungary trailing the developed countries, and attempts to close that gap continually proved futile, Orbán said. Since 2010, however, Hungary has been registering higher GDP growth and consumption rates than the euro zone, adding that the employment rate was above the European Union average. Orbán urged the parliamentary parties not to “squander” the chance to make economic progress thanks to achievements made between 2010 and 2016.
Meanwhile, the government is to launch a national consultation on “five dangers” facing Hungary, Orbán said, citing efforts by Brussels to introduce common energy pricing which could compromise government cuts to utility bills, EU policies on migration which counter Hungarian ones, and “attacks on Hungarian efforts” to cut taxes and create jobs. He also referred to foreign interference in Hungary’s affairs. He said Hungary insists on retaining its right to set energy prices, saying that this was not a power which could be transferred to Brussels.
Concerning migration, Orbán said it still had strong support in Brussels. But “step by step the countries supporting migration and those in Brussels” are being “contained”, the prime minister said. Slowly but surely, Germany and Italy are also changing their stance on migration, he said. Orbán said Europe should now turn its attention to migrant detention. He noted that the government plans to introduce a system under which migrants who have submitted an application for asylum will be banned from moving around freely on Hungarian soil until their case has been ruled on. He added, however, that Hungary’s standpoint was shared by more and more countries in Europe, which support a policy outlined at a recent EU summit to set up refugee camps outside the bloc. Before, “Brussels had not wanted to even hear about the idea,” he said. Migration pressure on Hungary’s borders is not expected to disappear over the next few years, which is why border protection will remain a top national security issue, he said.
Orbán said the third threat facing Hungary was attempts by foreign-funded “networks” to gain influence in the country. He said these organisations had “nothing to do” with civil groups, arguing that they were rather “Hungarian depots of international organisations”. He said the government was aiming for transparency and would not allow “global capital” to make decisions in place of the Hungarian people. The prime minister said Brussels was also preparing to take over a new slate of economic powers from member states, which he said would also impact Hungary’s tax regulations. “Hungary’s successful tax system must be protected,” he insisted, adding that Hungary’s various job creation schemes, such as the fostered work scheme, the job-protection action plan and investments aimed at creating jobs were also under attack from the EU.
Party leaders responded on Monday to the prime minister’s speech opening the spring session of parliament, with ruling Fidesz’s parliamentary chief focusing on Viktor Orbán’s upbeat message on the economy while the opposition leaders insisted the government had failed to address problems in the country’s public services. Fidesz’s parliamentary group chief said it was indisputable that Hungary’s economy was strengthening. Lajos Kósa told lawmakers that the opposition was confronted by hardship in the fact that employment was continually rising, the public debt was shrinking and that the labour market was expanding. He insisted that opposition politicians had selective memories: whereas they spoke of the awful state of affairs as regards corruption, they failed to mention their own “biggest corruption case of all time” surrounding construction of the fourth metro line. Referring to left-wing demands for a progressive taxation system, Kósa said this would lead to “brutal tax rises”. Thanks to the introduction of the flatrate income tax, 400 billion forints (EUR 1.3bn) have remained in the pocket of the average household, he added. Noting a signature-collection drive to trigger a referendum on Budapest’s bid to host the 2024 summer Olympics, radical nationalist
Jobbik leader Gábor Vona said the campaign’s success was tantamount to a protest vote against Viktor Orbán. He also accused Orbán of having his eye “not on gold medals but on gold bars”. Orbán has failed to resolve problems in health care and education, and he has done little to eradicate graft or hold the corrupt accountable, Vona said. Neither has he increased wages to western European levels, he said.
The opposition Socialists said Orbán should put “the real problems” of Hungarians at the heart of his new national policies. Instead of stadiums and the Olympics, people need incomes that provide security, Bertalan Tóth, the party’s group leader, said, calling for the reinstatement of the previous pension scheme which he said would have produced a 3.2% increase in the value of payments this year. Further, household gas prices should have been cut by 20% while electricity and district heating should both be 10% cheaper, he insisted.
Opposition LMP’s leader Bernadett Szél, referring to national consultation planned by the government, said what Hungarians really wanted was to be consulted on whether or not to hold the Olympics in 2024. Referring to five “battles” ahead identified by the prime minister, she said the government should set itself five tasks instead, such as ensuring a level of wages that guarantees a fair standard of living and higher spending on education and health care to prevent the departure of doctors and nurses.
via hungarymatters.hu and MTI; photos: Zsolt Szigetváry – MTI