Region: PM optimistic about Hungarian economy

Staff Report

For The Budapest Times

Hungarian Prime Minister Viktor Orbán painted a rosy picture of the future of the country's economy, while remaining cautious about its current state at a conference held June 1 to mark the first year in office for Orbán and his conservative Fidesz-Christian Democrat government.

Economic growth in Hungary has returned, he announced at the conference, dubbed "Economic Turn." The budget deficit is the eighth-lowest in the European Union, he said, public debt will fall sharply this year and employment will rise.

He added, however, that Hungary was still in the economic "danger zone."

"While we have put an end to the basic principles of a neo-liberal era, we have yet to build up the nonliberal economic policy of the 21st century, in terms of planning, coordination and practices," he told the conference attended by political and business leaders from around the country.

He went on to explain the Cabinet's unorthodox approach to the economy, which has involved cutting ties with the International Monetary Fund over an extension of a standby loan and imposing hefty "crisis taxes" on banks and other profitable business sectors. National debt and unemployment are not mere problems; they are enemies, he said, adding Hungary was "at war," and only complete renewal could defeat them.

Orbán said he "understood" those who are fighting to hold on to their way of life, but everyone must accept certain facts. "We cannot pay able-bodied people to go into early retirement, we cannot pay welfare to people capable of work when there is much unfinished work to be done," he said.

The prime minister and his Cabinet's policy regarding early retirement has drawn the ire of Hungary's workers as police and fire unions, as well as groups representing other state-funded emergency service departments have staged numerous demonstrations in recent weeks disputing the government's proposal to raise pension taxes to 16 percent for early retirees not willing to return to service.

'None of your business'

Orbán also stressed Hungary would not be swayed by foreign opinion as in the past. "Either we never began important work [in the past], or if we started and someone in America, Paris, Berlin, Brussels or London didn't like it, we lost our confidence and abandoned it," he said.

The Hungarian government has already received strong international criticism over its media laws implemented under Orbán, and he accepted that there would probably be further "attacks" regarding the newly passed Constitution, as well as his economic policy.

"We can only say calmly, politely and directly, without flinching, that this is none of your business; it is the business of Hungarians," he said.

Business leaders at the conference expressed a degree of satisfaction with the government's economic policy efforts so far, but their enthusiasm was not shared by Orbán's political opponents.

The head of German carmaker Audi's Hungarian arm, Thomas Faustmann, said he was "convinced" the government would achieve the objectives it had set out in its bid to modernize the country. He noted the Hungarian forint had strengthened considerably over the past year.

"Many automobile industry representatives have discovered the excellent conditions that Hungary offers in recent months. That is not least the result of the new Hungarian government's forward-looking and investment-friendly economic policy," he said.

The head of the employers' organization VOSZ, and one of Hungary's richest men, Demján Sándor welcomed some of the government's steps, such as setting aside eurozone accession and staying out of a unified taxation system. He criticized a government committee set up to monitor wage levels, which Demján said causes uncertainty for entrepreneurs.

"A society which does not produce cannot develop, so manual workers are needed, and their work should be respected," Demján said.

'Voodoo' economics

The opposition Hungarian Socialist Party (MSZP) was even more critical of Orbán's economic policies. Spokesman Lajos Körözs said the number of unemployed had risen even as the government promises hundreds of thousands of new jobs. He described Orbán's comments about Hungary ignoring outside criticism as "pigheaded."

The Socialist former Prime Minister Ferenc Gyurcsány summarized the first year of the Orbán government as one of "exaggerated hopes and bitter disappointments."

Playing on a government slogan, András Schiffer, leader of the green-liberal opposition party LMP, said "in place of national cooperation we get national cynicism." He described the government's economic policy as "voodoo."

The writers can be reached at news@praguepost.com