The Fidesz election program can be summarised in essence in a short and simple way: we will continue the same path! However, two weeks ago Prime Minister Viktor Orbán took a deep breath and presented ten points on specific changes that will be made to the economic structure if re-elected this Sunday.
Orbán gave a speech at the Hungarian Chamber of Commerce and Industry (MKIK) on 19 March. For a starter he reminded us that the Hungarian economy is capable of growing twice as fast as the German one. This had already happened before, between1998 and 2002 (the time of his first governance), but in the following period the virtues that he had built up were forgotten.
Then Orbán mentioned that in the budget periods from 2007 to 2013 only 16% of the EU funds were invested in the economy, while in the period from 2014-20 his government would like to raise this ratio with the consent of Brussels to 60%. He defended the introduction of the single income tax ratio with a snappy remark that the first concept of a progressive taxation can be found in the Communist Manifesto.
The last year was the first one in the history of the Hungarian economy when it was able to support itself without any help from abroad, we heard. As evidence the prime minister mentioned that the EU no longer considers Hungary as one of the countries with a critical macro-economic imbalance.
After this, Orbán spoke about the unusual economic policy that Hungary applied as an answer for the structural crisis in Europe and that was judged by numerous critics as “unorthodox”. Because Europe was not simply in a conjuncture valley, it needed restructuring; such as Hungary had already started.
He explained that Hungary can be a model for the European countries in this context, due to the parliamentary two-thirds majority, because the political stability is a good base for a bold economic policy that is giving the country a considerable competitive advantage today. Finally, Orbán summarised the points that in his opinion should be followed during the coming years.
1. The state debt should be financed in a growing part from homeland sources
Since the beginning of the crisis, the ratio of financing in foreign currency had risen from 30% to 40%. Still, when the Templeton Fonds judge that investing in Hungarian state bonds is a good investment, why should Mr Kovács from Karcag have any doubts?
2. The re-industrialisation of the country
Regarding the ratio of industrial income within the Gross Domestic Product rate, Hungary only needs to overtake the Czech Republic and Germany to gain the title “most industrialised country” in Europe.
3. New global positioning
Besides the recently reinforced connections to Germany, Russia, the USA and China, Orbán mentioned Turkey and India as the next challenges to build new strategic partnerships.
4. Changing ownership structure in the banking sector
This might be a taboo topic but a country could not be really independent unless it controlled at least half of this sector. Some new participants would surely benefit the competition on the market.
5. Changing ownership structure in
The agricultural sector has a bright future. The government had answered the old and painful question who should own the Hungarian land and soil by stating that small and medium producers should own 80%, while the really big producers only 20%.
6. Development of Innovation Centres
There are already some examples like the Wigner-Centre for Physics, the Infopark in Budapest or the newly opening ELI-Laser Research Centre in Szeged, but such Innovation Centres must have a network throughout the whole country. The centres must be managed together by the state universities and the commercial sector.
7. Shifting tax burdens from income tax to consumption
According to Orbán, there is no reason to wander off the beaten path. It’s only a tactical question whether, depending on the current state of the health and pension funds, the next reduction should happen in the taxes or the other charges on labour.
8. The demographic challenge of a shrinking population
He described as the greatest challenge the fact that the Hungarians are not able to reproduce their population nowadays, which will have serious economic consequences for the future. He defined the “magic triangle” as Work-Performance-Family, in which the raising of children would be stimulated through a low flat tax rate and tax reductions.
9. Energy must be as cheap as possible
Orbán would like to redefine the energy sector as an economic branch that is not profit oriented, but stands in service of the other industries in order to allow the highest profits possible.
10. Full employment
Another taboo topic that would divide society and those millions of people who were left without a job in Hungary in the recent few years. The ABM measures could be criticised, but whoever had earlier been living on welfare income appreciated being able to live a little better, and be able to do something for society through his work.
The prime minister concluded his presentation in a philosophical way: “We have to believe that the future is not yet decided. No one has ever walked our way before us. No one will take the responsibility for our own path in life.”
Adding that of course he cannot promise we will reach the desired results, but he thinks it will be a good attempt and one which has proved to have some positive results already.