10 April 2020

Katalin Nagy: Late yesterday afternoon the Prime Minister announced the maintenance of restrictions on free movement. I welcome Prime Minister Viktor Orbán to the studio. Why did you wait this long to make the decision? Last week it was said that the decision could be taken as early as Wednesday, after the Cabinet meeting.

Good morning to your listeners. In crisis management, the content of decisions is important; but at least as important is their timing, and the proper timing of a decision depends on being in possession of all the information needed to make that decision. The gathering of such information presents us with a task; and also, if the situation changes rapidly, say from one day to the next, then the decision must be made at the right time. And as we’re now moving from localised symptomatic infection towards mass symptomatic infection, towards mass infection, I’ve been waiting to see if more stringent measures are needed. So I thought we’d be in a better position to assess the situation on Thursday – or in fact on Friday, today, a day before expiry the original measure, because that expires on Saturday. But I couldn’t wait until Friday, as it’s Easter and today is a public holiday; so the decision was taken on Thursday. But I would have liked to wait longer, because I felt that if the situation worsens, the measures will have to be made stricter. And what I’ve seen here in Budapest – around care homes, for example – has vindicated this caution. And so in the end we haven’t made the restrictions stricter, we’ve simply maintained them. But we see that there are very different conditions in, say, Taktaharkány or Tihany, or on Margit Island [in Budapest] – to give three examples. Situations differ very widely. It’s not possible to regulate or tighten these rules through a single national decision; and so we’ve decided to maintain strong restrictions on free movement, but we’re giving mayors the opportunity to introduce further restrictions in places and in ways that are justified by local conditions. This is what seemed reasonable on Thursday. In view of all this, we’ve therefore decided not to set an expiry date for the general national restrictions on freedom of movement, but to maintain them indefinitely, evaluate them every week, and decide on a weekly basis whether to maintain them, tighten them, or relax them.

Yes, well, we didn’t expect these restrictions to be eased, but it was clearly on the cards that they would be tightened – if only because we know that here yesterday, in a care home on Pesti út, 150 people were confirmed to be infected and were taken to hospital.

Yes, but in a small rural settlement, let’s say, with a population of 300 souls, that problem doesn’t exist. So as I check the situation and travel around the country I also hear the valid argument that such conditions don’t exist there and their way of life in the countryside means that people don’t often gather in large crowds – because there aren’t any large crowds of people there, there aren’t that many people in the whole of such a village. For them the rules can be more lenient or more relaxed. Many different kinds of need exist simultaneously. I think that there should be a general, national level of discipline and strictness, if I may put it that way – although as an evergreen student rebel I’m not comfortable using these words. All the same, this is what there should be, and then people can be allowed to decide on a local basis whether or not they want to tighten the rules. As to whether or not it’s possible to relax restrictions, in the present situation our most powerful weapon is discipline – or self-control might be a better way of putting it. If in terms of face-to-face interaction we can – as they say today – maintain enough social distance from one another, then this weapon will work; and for the elderly it is especially important for it to work. But I also see that some countries are inching out of the crisis, as if they can see the light at the end of the tunnel. I can’t yet see it here in Hungary, but we’re in the fortunate situation of having a large laboratory: it’s called Austria. It’s closer to Italy, so the infection reached it earlier. As a result, over there everything’s happening earlier than it is in Hungary: when they enact measures there, they do so before we do, they see their effects, and we can make decisions here in the light of their experience of the success or otherwise of what they’ve done. Therefore with a special team I’ve been observing Southern Germany and Bavaria – but most of all Austria – as a kind of a laboratory. We observe what has worked for the Austrians and what hasn’t, and I think that we should enact similar measures here in Hungary only after we’ve assessed the ones enacted over there.

Yesterday for the first time you paid a surprise visit to a hospital – perhaps it was St. János Hospital. What did you discover?

I visit hospitals every day. I have some kind of hospital tour every day, and in the future I’d like to visit as many as two or three a day, if my work allows it. I’ve also been to Sátoraljaújhely, then to Korányi Hospital, and later to St. János Hospital. And I’ve also been elsewhere. And when I’ve finished here today I’m going to visit another hospital.

Does the Prime Minister need to visit every hospital?

Perhaps not – or at least I hope not. But all the same, my instincts prompt me to do so. Common sense tells us that there are hospital directors, hospital commanders, a minister of state and a minister for health, and there’s the commander of the Operational Group. So in fact common sense suggests that perhaps I’ve no reason to be there; but all the same my instincts prompt me to go out. I see there’s some uncertainty about numbers when I ask for an answer to a simple question like exactly how many people will need intensive care, how many will need to be taken to hospital and be put on ventilators, or how many beds and ventilators there are, how many of them are operational, how many have been tested, and whether there are enough doctors and nurses, and who will replace them when they’re infected – because international experience shows that around 20 per cent of them will be.

And what do you find?

In my work I’ve asked the Defence Minister for two military officers, who assist me in these inspections. They make the preparations for these visits, and in general no one knows about them; this will also be the case this morning. One of them accompanies me, and we take stock of the situation: how much there is of one thing, how much of another, and how things are going. Checking everything isn’t an absurd aim, because we must prepare for when the most severe problems hit Hungary – and in theory Hungary could be hit by the most severe problems, in which there is mass infection. Everyone hopes we can avoid this. Wherever I go I see that everyone believes we could escape that; but as I see it, no one has escaped that stage, it has happened everywhere, and so we had better prepare for it. Preparation must be seen through this prism, and organised accordingly. So when we are under extreme pressure, we could need as many as 7,500 to 8,000 intensive care hospital beds and ventilators, so that we can treat elderly patients – because the elderly are most at risk – and save lives. Under normal circumstances there are approximately 2,000 ventilators and anaesthetic machines – which are also suitable for this purpose. We must increase this number to 8,000. And we must not only increase the number of machines and beds, but also the number of doctors and nurses who can operate them. Therefore we’re running a training programme: we’re continuously training residents, graduate medical trainees, to stand by such hospital beds – even if this was not the area of specialisation for which they were trained at medical school. This process is in progress, and we still have time. In my opinion the defence operation has been successful so far in enabling us to slow the spread of the epidemic, and so we’ve gained time. I don’t measure success in terms of being able to escape something which others haven’t been able to escape: the stage of mass infection. Instead I measure it in the rate of infection, and in whether our healthcare system, our doctors, nurses and medical supplies are prepared for what’s in store. We’ve gained time, and so we’ve mounted a good defence, but the major trial – the real test – is ahead of us. Let me repeat: I see this, I talk to many people around the country, and everyone is hoping – even a doctor said so – that for once Hungarians could be lucky, and we could escape the worst effects. We can hope that we won’t be struck, but if everyone else has been we must still prepare for the possibility that what has struck others can also strike us. And in that event we don’t want to see conditions in our hospitals like those we’ve seen in Spain or Italy or wherever. I’d like to see things functioning in a well organised, disciplined, safe and carefully considered way. For that the key is preparation, just as in sport: if you want to perform well in a match, you also have to work hard in training sessions. This is the period we’re in, and I’d like to see this when I travel around the country. I also want to encourage people. Perhaps not everyone is happy to see the Prime Minister, because politically not everyone’s heart is on the right; but at the end of the day we are in trouble, and at times like this I think we must trust one another, we must support and motivate one another, and we must encourage one another. This is what one tries to do as much as one can.

You’ve said that in order to be able to slow down this process – and perhaps so far we’ve succeeded in doing that – discipline and self-control are very important. But there is a public holiday, it’s Easter. It’s very difficult not being able to visit family members and relatives, not being able to get together and talk. So from a spiritual point of view we must find some kind of solution.

This is very difficult, especially for the elderly. While I don’t yet belong among those of our citizens of advanced years – I wouldn’t say I’m a Methuselah – I do ask myself about the purpose of our lives. Well, one lives to see one’s children and meet one’s family, doesn’t one? Now people of my age or older don’t tend to have great ambitions about what they want to be in life; instead they would like to lead a happy life – if possible together with their children, to see them as much as possible without being a burden on them. After all, this is the true source of pleasure: children and grandchildren. What’s more, Easter is one of the high points for this, when everyone gets together and one can meet everyone else. This is a special source of joy in the sphere of Hungarians’ customs. But now we’ve been denied it. This is something that we must now forsake; and I can’t give people any encouragement apart from saying that we must try to accept that this Easter will be different from the Easters we are accustomed to.

The opposition is describing the economy protection action plan as being too little, too late. Left-liberal economists say that the Hungarian government misunderstands this situation, because it’s not the same as the situation in 2008. But it’s interesting that analysts at Morgan Stanley in London have looked at the region and written that they believe that the economic and monetary measures adopted in Hungary will be able to successfully slow down and offset the economic shock; and they also believe that Hungary will be the first country in the region to relaunch economically in 2021. It’s interesting that there’s such a vast difference in interpretations within the realm of economic philosophy.

May that prediction from the London analysts come true. But my generation grew up with certain mysterious Soviet scientists always being featured in the news, and now in the contemporary world we read about these mysterious London analysts; so one has one’s doubts.

Should we be sceptical?

Yes, but let’s look at the situation. First of all, there’s the Opposition, who have all my respect – as far as that’s possible, of course. I see that even during a pandemic they’re not focusing on much else apart from how to weaken the Government and how to get themselves into government. That’s a fine ambition, but at present they can’t even cope with the operation of a care home. So I suggest that they concern themselves with the issues of the day, and work in the areas in which their responsibilities lie – as mayors, say. As regards the philosophy of crisis management, this is an old debate – as was also seen in Hungary in 2010. Whenever there were problems in the past, earlier leftist economic and crisis management approaches always imposed austerity measures. They said that money was needed, so their prescription was to take it from pensioners, and they withdrew the annual 13th month’s pension; they decided to take money from public sector employees, so they withdrew their annual 13th month’s salaries; and because money was needed they decided to take money from families. They thought in terms of austerity and taking money from people. In 2010, when we were given a mandate to manage the crisis, we set out in the opposite direction. We pursued a different logic: we didn’t want to take money from people only to give it to others in the form of benefits. Instead we said to people, “If we’re able to provide jobs for everyone and you’re prepared to work, at the end of it all, the whole economy will emerge from the crisis.” In our way of thinking the focus was on jobs and work; and this is no different now. Everywhere I say that the main goal is that we must create as many jobs as the virus destroys. This is the underlying principle of crisis management, this is the goal of our measures. I don’t want to return to the era of a benefits-based economy and high debt. In the past ten years Hungarians have achieved two huge results: the first is that we’ve ended our financial vulnerability and dependence; the other is that everyone has entered the world of work, and the value of work has increased year on year, because wages have risen. Our goal was to live in a country in which we could stand on our own two feet, in which we wouldn’t be financially dependent on anyone, in which speculators would be unable to exploit us, in which we have work providing us with self-respect, and in which day by day the meaning of our work grows, strengthens and reaches fulfilment. This was our goal, and we mustn’t abandon this goal – even when the European economy finds itself in crisis. We must power on through short-term difficulties without having to abandon our original goal. This is the philosophical difference between various economists and governments, and between opposition economic policy specialists and government economic policy specialists. But I insist on our following the path which since 2010 the electorate has repeatedly mandated us to follow. I believe that the crisis management method we’re pursuing enjoys support which has been clearly expressed in elections: we have a mandate to do this, and it’s on this path that we must find the solutions. This will work. So we have a plan; this is a large-scale plan, one that is perhaps larger than any in the history of the Hungarian economy, containing hundreds of measures, which we’re introducing day by day. And I’m sure that this plan will work – after all, in my role as Prime Minister I believe in what I’m doing. This will solve the problems, it will bring jobs back, and this plan will set the Hungarian economy back on the path of growth. And I hope that within a few months – with due modesty, because I hope for the success that makes modesty a virtue – I’ll be able to say, “Well, you see, this plan has worked”. All I can say now is, “Believe me, it will work.”

You’re asking banks to contribute HUF 55 billion to the disease control fund, while local governments are collectively required to contribute HUF 34 billion. Interestingly the banks haven’t objected, and only opposition-led local governments have claimed that this request would cripple them financially. This also sounds interesting, in light of the fact that between 2011 and 2014 the Hungarian government took on HUF 1,300 billion in local government debt; and now all it’s asking for is 34 billion – and not even for itself, but for the country. As regards banks, we shouldn’t ask too much from them, because when the economy restarts we’ll need their work in the form of lending. Or will the Central Bank be able to assist in this?

In the history of crime there’s an old story that when Al Capone was asked why he robbed banks, he replied, “Because that’s where the money is.” But I don’t think that this logic is expedient in economic policy. The Opposition – and perhaps some members of the general public – like to think that there’s an unlimited supply of money that one can access with impunity. But in fact we must be astute, because if the banks can’t operate, if we place burdens on them which mean that they have operational problems, then the economy’s money supply will also stop functioning, people’s savings in the banks will lose value – or people could even lose their savings altogether – and businesses will lose access to the credit with which they could implement developments and thus provide work, create jobs and give people work. We must be careful when allocating burdens. This is the science of governance, if I may put it that way: finding the limit which a given taxpayer – say a bank or a multinational company – is able to bear, but at the same time taking as much as the country needs in an extraordinary situation. Therefore it’s always better to first come to an agreement or negotiate, and then take decisions. But we’re not in uncharted territory, because in 2010 we also said, “People, we have a major European economic crisis.” And this is also the situation now. Everyone must make a contribution. If only the public are called upon to shoulder the burdens, and banks, multinational companies, local governments and parties aren’t, then in the end there will be austerity; and then the general public will suffer the negative consequences of this whole situation, and they alone will bear the brunt of crisis management. But the banks, multinationals, political parties and local governments are all as much a part of our lives as ordinary citizens are. So everyone should make a contribution. Not everyone can make the same contribution, because we’re all in different situations, but the burdens should be shared by everyone – including local governments and parties. The sums that parties are required to donate to the disease control fund through the halving of their funding are not enormous, but I believe that it’s also important for the country’s political organisations to reorganise their operations and finances – as should local governments and central government. Therefore the Government itself has contributed more than HUF 300 billion to the fund. Banks must adapt and multinational companies must adapt: everyone must make a contribution, and if everyone makes a contribution, we will reinforce one another’s actions. And in the end this plan that I’m talking about will have its financial foundations, and what happened after 2010 will be repeated. Also, if you remember, back then there was enormous outcry and protest when we introduced the bank levy and the special tax on multinational companies. And what happened in the end? Two or three years later we were talking about how it had been worthwhile for multinational companies and banks to share the burdens, as the economy had been boosted, energised and relaunched. The same will happen now, except that we won’t have to wait years, because – in my optimistic scenario – the economy will find its way back on a straight path within a few months. Of course there are debates about this, and as always in such matters the Central Bank is taking the most optimistic position. Perhaps I wouldn’t go as far as joining them in saying that there could even be annual growth of 2 to 3 per cent. But neither do I see the inevitability of a decline on the enormous scale widely envisaged by economists. I would rather rely on the prognostications of those latter-day Soviet scientists, the London financial analysts, who say that Hungary has a good chance of emerging well from this whole situation; all we need is a good plan, which must be well implemented.

But you insist that the budget deficit shouldn’t go above 3 per cent. In theory it could, as Brussels has allowed this.

Yes, but there will be a high price for that, and those doing so now will be hanged for it later: I’m convinced that they’ll come to grief. In a few months’ time, when the first great waves of the crisis are over, those who are now rushing to take on debt – because the budget deficit is a technical term, but in Hungarian it means taking on debt – and who are now starting to accumulate unjustified or excessive debt, will find themselves hanging on a wire, manipulated by creditors and speculators. We mustn’t disparage speculators: speculators speculate. I could say that this is their job: they sit and watch to see who’s in a vulnerable situation, and then they attack and skilfully prise money from those they believe to be in a vulnerable position – for example through excessive debt which they have to repay.

They also attack those who aren’t in such a bad situation.

Yes, but if they attack someone who’s not in such a weak position they could come to grief. Because those who aren’t in such a poor position will react like we did as children when we were on our bicycles and we were attacked by dogs: we’ll lead them away somehow, so we’ll have a chance to defend ourselves. This is providing our bicycle is good and we’re fast enough. But if the dogs come along and there are no wheels on our bicycle, if we’re deep in debt, then we’re in trouble. So I say that we mustn’t weaken our capacity for financial defence and render ourselves unable to mount a defence against a speculative attack. Again, this is the science of governance: setting a level of debt that can generate funds for the economy without leaving us vulnerable or defenceless in the face of an attack. The plan I’m talking about – this economy protection action plan – has set just that level of debt. And we say that under such circumstances we mustn’t go above 3 per cent, because if we do we’ll eventually pay a crushingly high price for it. This is why we must keep the deficit below a certain level: we’ve now set it at 2.7 per cent. For me 3 per cent is a red line.

Thank you, Prime Minister. You’ve been listening to Prime Minister Viktor Orbán.

(Cabinet Office Of The Prime Minister)