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Prime Minister Viktor Orbán has authored an article in the Financial Times addressing the restoration of the European Union’s competitiveness.
As Hungary assumed the rotating presidency of the Council of the European Union for the second time in thirteen years, the Prime Minister reflected on the erosion of Europe’s economic standing.
Mr. Orbán invoked the words of former German Chancellor Helmut Kohl (1930-2017, in office: 1982-1998), who emphasized the critical link between Europe’s political survival and its economic competitiveness.
He argued that this perspective is more relevant now than ever before.
In the article Viktor Orbán attributed the EU’s declining competitiveness to misguided decisions from Brussels that failed to align with global economic realities. He cited the green transition as a prime example, criticizing the EU for implementing policies without adequate consultation with individual sectors. He pointed out that European energy prices are significantly higher than those in the United States, forcing companies to divert resources from innovation to utility costs.
Europe is lagging behind its competitors: productivity & competitiveness of member states must be improved and growth encouraged. Top priority of #HU24EU is the adoption of the New Competitiveness Agreement. Today met w/ @ert_eu pic.twitter.com/R14Ecqgm9a
— Bóka János (@JanosBoka_HU) June 4, 2024
While he acknowledged the importance of Europe’s leadership in green sectors, particularly in electric vehicle development, the Prime Minister cautioned against regulations that hinder industry and burden citizens. He highlighted the challenges faced by farmers, who are grappling with rising production costs and complex “green obligations.” As he wrote in the article:
European companies are losing their competitive edge and are being compelled to allocate funds to utility bills rather than innovation.”
Viktor Orbán also criticized the implementation of the OECD global minimum corporate tax, which he claims has failed due to non-adoption by key competitors like the US, China, and India. This, combined with other factors, has made Europe a less attractive investment destination. Mr. Orbán contrasted the sluggish growth of European economies (around 1%) with the more robust growth in the US (3%), China (5%), and India (7%), emphasizing the urgent need for change.
Drawing from Hungary’s experience, he advocated for policies that foster competition and create a favorable business environment. The PM cited Hungary’s flat personal income tax rate, abolition of inheritance tax for close relatives, and low corporate tax rate as successful measures.
He also noted Hungary’s efforts to diversify trade and investment relations, particularly with Asia-Pacific partners.
In his FT article Mr. Orbán also maintained that the Hungarian presidency’s aim is “to negotiate a new competitiveness deal to relaunch European economic expansion, while promoting an open economy and international co-operation.”
Looking forward, he proposed a new competitiveness pact for the EU, emphasizing healthy competition, technological advancement, and international cooperation.
He also stressed the need to address illegal migration through cooperation with countries of origin and transit, and calls for EU funding to protect external borders.
Viktor Orbán concluded by highlighting that Hungary’s competitiveness strategy aligns with the Franco-German Growth and Competitiveness Program, garnering support from Berlin, Paris, and Rome. He called for setting aside ideological debates to focus on revitalizing Europe’s economic engine and restoring its competitiveness on the global stage.
Via MTI, Financial Times; Featured Image: MTI / Miniszterelnöki Sajtóiroda / Fischer Zoltán