13 January 2017

Éva Kocsis: – We have Prime Minister Viktor Orbán in the studio. Good morning.

– Good morning to you and the listeners.

– We haven’t spoken this year, although it’s true that this is still only 13 January. Let’s begin with the changes at the beginning of the year. A great deal has happened: tax changes, VAT reductions, and increases in the minimum wage and pensions. The primary purpose of the changes – as we’ve discussed previously – is obviously to strengthen businesses and their position, and to reduce anomalies in employment, which we’ve discussed on a number of occasions. As far as I know, the Economic Cabinet also had a meeting this week. What kind of responsibilities have you assigned to your ministers in these areas for the period ahead?

– When setting about our task – administration of life in the country – the most important requirement is to know precisely what is to be done and to have clear goals. In 2010 Hungary was on the brink of financial and economic bankruptcy, and the task in hand was management of the crisis. It took the country two to three years to overcome this, and much blood and sweat went into recovering from the crisis, but when that was complete we started building an economic and social system – a system that we call the workfare economy – which we believe will raise the living standards of the Hungarian people and which, in the longer term – over several decades – can create a competitive economic system, and give outstanding economic performance in international terms. We have built such a system. There is also a political aspect to this: a system of international cooperation which enables us to develop without limiting each other, but instead to unite our efforts and combine our strength. The economic aspect of this is the workfare economy, and this is what we’re currently building in Hungary. There have always been debates about this – especially at the beginning. Our efforts are now beginning to come to fruition; this is not only seen by those who are well-versed in economics, but the change emerging through the workfare economy is also gradually beginning to emerge in people’s lives. Everyone has a job, and as for unemployment, in essence everyone who wants to work is able to find it. Unemployment is falling dramatically towards a state of full employment. At this stage, we’re now talking about making work more worthwhile – meaning that we’re able to increase wages, and we’re able to reduce payroll taxes. We’re also able to do more and more for those who are in a difficult situation, because we can reduce the VAT on basic foodstuffs; this is good for both pensioners and families. I think children are a top priority, because our future depends on them: whether families have them, how many, and what sort of people they grow up to be. And so it’s important to be able to provide a family support scheme which is not just generous – that is not the right word – but increasingly solid and strong. Looking at a family with two children, if we compare their life in 2010 with their life now, we can see that they are eligible for a tax allowance simply because they have two children, and so they effectively receive an extra 360,000 forints annually. This is a major achievement: a great result that I believe Hungary has every reason to be proud of. So I think that 2017 will be a year to continue this series of achievements.

– What were the responsibilities that you asked the economic and strategic cabinets to undertake?

– The world of politics, or leading and administering a country, is a task in which problems emerge all the time. As we are a country of ten million, there are always some problems. The only question is whether the problems we have are good problems or bad problems. A good problem, for example, is when the economy is doing well, and we need to think about what to do with the additional opportunities we have thus gained: whether to provide extra support for families and whether to also allocate funds for pensions. These are good problems. There are also bad problems – for instance, ensuring that people don’t die in the winter cold. Those people with no shelter must not freeze to death in severe sub-zero temperatures, and we have to make sure that there are more spaces in shelters than there are homeless people. We deal with such issues continuously. But now we also have a strategic – longer-term – assessment of 2017, which we have already said will be a year of rebellion; I believe that over the past two weeks this claim has been confirmed. The European nations – now I’m talking about those in the European Union – will rebel against the Brussels’ policy of continually seeking to appropriate powers from the nation states, which it does sometimes openly, and sometimes by stealth. Brussels’ wants to interfere in everything, so that we have less and less of a chance to decide on our own lives. And I see the debates surrounding the French presidential election, with M. Fillon, who for some years was French prime minister during my term as prime minister here. His programme is one of rebellion. On the issue of migration, for instance, in effect he is rebelling against the common European asylum policy we have today. I think that phenomena such as this will continually emerge in 2017; and so we Hungarians must also prepare for a major struggle between the policies of the states which form the European Union and which seek to protect their own rights, and the central will of the European Union, which seeks to appropriate ever more powers from the nation states. This will be the dominant source of dramatic tension in 2017.

– We’ll come back to that later. In this context let’s just say a few words about the Hungarian economy. If we look at the international press – Le Monde, The Financial Times, Bloomberg, for instance – we see that even the harshest critics recognise the achievements you’re talking about – or at least some of them. They add, however...

– This is because there’s a saying, which sounds better in English than in Hungarian: nothing succeeds like success.

– Yes, but they add that during the period ahead – this year – interventions undermining competition will paralyse the Hungarian economy and growth, and this will scare off investors. Now, looking at the last few years, the clear conclusion is that incentives might be neither here nor there: a certain barely tangible market sentiment exists – or what is simply referred to as “the mood” – and no one can say exactly what it is. If there are news reports such as these, they can cause the Government some inconvenience in the year leading up to the election, can’t they?

– I’d suggest either not to read these reports, or not to give them any credit. You live here in Hungary, and this is a great advantage compared with those who simply write about Hungary. You know this country, while those who write these reports have no idea what’s going on in Hungary. Believe your own eyes instead. In Hungary there’s a shortage of labour. This means that investment is growing continuously. If investment wasn’t growing, if the demand for labour wasn’t continuously increasing, how could there be a shortage of labour? After all, we’ve not increased in number: there are the same number of people here than earlier – indeed somewhat fewer. And yet businesses are unable to find labour. This is because they are continuously thinking in terms of new investment and new capacity increases, and it is harder for them to find staff. The most basic, simple and obvious facts disprove this sophistry you refer to. Well, I know what the root of these reports is: sour grapes. Westerners are used to telling us Central Europeans how to be modern, how to be successful, how to build capitalism and the market economy, explaining what democracy is,  and so forth. Now they are suffering from a lack of success: their figures are poorer, ours are better, and the reason is that we are doing things differently from them. They do not want to admit that our way of doing things is more sensible. We can detect this in a variety of issues: from migration to the economy. As I see it, instead of facing up to reality and analysing it as normal people would, for ideological reasons they continue to force their broken old record onto the turntable, not realising that it is indeed broken and won’t play. What you are referring to is the voice of the past.

– With regard to all that you’ve just said, what will the next few months in Europe be like? Obviously migration will be one of the issues here. You’ve already used the term “rebellion” for this year.

– Well, there’s the issue of migration, but we’ll have another bigger battle – or at least as big: the protection of reductions in household utility charges. This is because Brussels – some politicians, but most of all the bureaucrats there – have seen fit to ban reductions in household utility charges in Hungary. They are doing so by stealth, rather than by using straightforward, brave language as we Hungarians do: they call this the Energy Union. There’s a passage in the draft on the Energy Union which effectively prohibits state price regulation. This means that governments will not be able to regulate the price of energy. This in turn would mean that the reductions in household utility charges in Hungary would have to be phased out. This is what Brussels wants to achieve –they want to ban them, in other words. This will be a huge battle in March.

– In that case, let’s look at this year from that point of view. In terms of powers – national powers and EU powers – who will prevail in the year of rebellion, to use your expression?

– It isn’t clear yet. We’re still at the beginning of the match: in the thirteenth minute, rather than the ninetieth. So I can tell you that there will be two major battles. One of them will be about attempts by Brussels to appropriate national competencies related to migration: they want to tell us who we may and may not live together alongside. This must be blocked. Yesterday, we took an important step in the opposite direction, when we reinstated mandatory detention for migrants whose applications for entry to Europe are still in the process of being assessed and have not received a final decision. So from now on a migrant will not be able to move freely in Hungary until there is a final court ruling on their application or appeal. The EU prescribes free movement, and so we’re now openly opposing this.

– I was going to say that this is open opposition.

– Yes, this is open conflict. But acts of terrorism in Western Europe are being committed by people whose identities and reasons for being there cannot be determined, and meanwhile in the western half of the European Union regulations are in force which are in my opinion dangerous. These regulations allow people whose asylum applications have not been processed  to move freely within these countries, and as a result the threat of terrorism has increased. We must not set foot on this path, or continue on it. Earlier we didn’t grant them free movement: everyone was held in mandatory immigration detention until their applications had been assessed and finally decided on. But the EU forced us to change this. Since then, however, acts of terrorism have been committed in Western Europe, and in order to defend ourselves we must change all regulations that make acts of terrorism easier. This is what we have just done. So there will be conflicts of this nature. The other source of conflict will relate to Brussels’ increasing desire to interfere in issues of economic strategy, such as energy prices, taxation, wages, and so on. And these are attractive things, because from time to time they’ll say that wages should be calculated differently than earlier, and then people will do the sums and see whether this is good or bad for them. In this debate I’ll simply maintain that we must ensure that Brussels doesn’t gain the power to interfere in issues of economic strategy, taxation, prices and wages. There are issues on which it’s good to have common European policies, but Brussels shouldn’t interfere in everything – particularly not in issues on which we disagree with them, because now they clearly want to prohibit the reductions in household utility charges. So there will be defensive measures on the issues of migration and economic strategy. And on both fronts we must defend our sovereignty.

– From what you’ve said, I gather that in the year leading up to the election there will be major, noisy disputes with Brussels.

– Well, we’ll try to win these battles in a restrained manner, but if that doesn’t work...

– What you’ve just mentioned are serious matters.

– If that doesn’t work, we’ll try to win them in a louder manner.

– And in this dispute, in this struggle, in winning this battle, how significant a role will be played by the Visegrád 4? This week’s Heti Válasz published an interview with Jarosław Kaczyński, leader of Poland’s governing party Law and Justice. In addition to saying that he thinks the importance of the V4 will increase in the period ahead, he says that the V4 should also establish enterprises with major influence at a European level. This is just an example of practical cooperation.

– On 1 July Hungary will take over the Presidency of the V4, and it will be my responsibility to organise our joint efforts. I’ll seek to achieve what Mr. Kaczynski has spoken about:  intensifying cooperation within the V4. Solidarity is working well with the Poles. Most recently, for instance, the EU wanted to adopt a decision against coal mining, Polish coal mining. Although we have no vested interest in that issue, we gave them our fullest support, and in return I asked them to give us their fullest support, because Brussels doesn’t want to approve our plan to reduce VAT on Internet services to 5 per cent next year. We have already reduced it to 18 per cent, and now we want to reduce it to 5, but Brussels wants to block this, and so I’ve asked the Poles to support us. So there is cooperation among the V4.

– On the issue of migration, what we now see in the goals of the EU presidency of Malta – which would otherwise urge protection of the external borders, whilst also supporting resettlement quotas – is that in several countries recently there has been a shift towards measures similar to those implemented by Hungary, and everyone expects to move out of the impasse that Brussels is now in.

– Yes, to our mind there is no impasse: the task in hand is for each country to decide for itself who it allows to live there.

– But in this regard the talks are now deadlocked, aren’t they?

– Yes, but we are deciding on this issue now. For us, this is not a deadlock: for us it’s good as it is.

– And from Europe’s point of view?

– From Europe’s point of view, each country must decide for itself. In my view we don’t need a European asylum policy, but Brussels should allow – indeed help – the Member States to pursue their own asylum policies. And I don’t want to interfere in how the German Chancellor or the French President decide on the asylum issue. What we need is for them also to refrain from interfering in the asylum or immigration policy that Hungary sees as desirable for its own purposes. We should simply respect each other.

– But that’s not what the Germans, the French and the Italians say.

– Of course they will try to take this right away from us, and this is what they’re talking about; but today there’s no stalemate in that regard. We are happy with how things stand at present.

– I’ll ask you in another way. Say in six months’ time, who will prevail in this issue, this dispute?

– We’re defending our positions. I look at the French presidential election programme and, let me repeat: there, even the centre-right candidate has a rebellious, revolutionary programme on the refugee issue.

– If we look at some specific facts regarding migration, you’ve already mentioned the border guards, and you’ve mentioned the fact that they won’t be allowed to leave that zone which …

– Mandatory immigration detention…

– Mandatory immigration detention, which is against current EU regulations. Taking all these things into consideration, more and more people are talking about strengthening a European intelligence service. What are your thoughts on this?

– Cooperation is desirable.

– But what does cooperation mean in practice? Because here we’re talking about countries which also effectively spy on each other.

– Well, in essence it means exchange of information. The world of intelligence services is a difficult one. Those of us outside that world find it rather hard to imagine what it’s like. While I deal with issues of this nature because they fall within the realm of national security, they have their own logic. The services of the various states are reluctant to exchange information with each other, and they don’t readily expose their operatives or reveal their sources. So it’s not easy to create some sort of European cooperation among intelligence services which are organised on a national basis. But I think it’s worth heading in that direction.

– In the Heti Válasz interview I mentioned earlier, Jarosław Kaczyński said another important thing about American and European relations. He mentioned that when he met former Mayor of New York Rudolph Giuliani in Warsaw, Mr. Giuliani told him that the Trump administration also has a vested interest in a strong and independent Central Europe. Mr. Kaczynski added that he hopes that your visit to the United States will achieve results on this issue. Does this mean that there are already specific details regarding your trip to the US?

– There are no specific details that can be made public at the moment.

– But this means that there are ongoing talks in the background, doesn’t it?

– We’re working on it, yes.

– Do you already have dates?

– We’re looking at all the options.

– Fine, we’ll continue that when the details are no longer just in the background. On the whole, will the changes in the period ahead – and now we’re talking about the new US leadership, the Trump administration – be significant enough to also have an impact on Europe?

– Of course at this point in time everyone is speculating, as the US president-elect hasn’t even been sworn in yet. Therefore everyone’s trying to judge what kind of US policy can be expected in the period ahead based on his statements, what he said during the campaign and his personnel appointments. I’d suggest that in this interview we shouldn’t join in this speculation. The President will take his oath, he will make decisions, and then we’ll consider how we should react to them. All I can see is that a different American leadership culture is about to move centre stage. The previous administration, the Obama administration, was globalist – I use this term for the sake of simplicity. The new one won’t be, and it will pursue more forthright American policy. They won’t beat about the bush, they won’t complicate things. In the past this was America’s competitive advantage, and in the new US leadership there are many who we can call self-made people. If I speak to any of the prominent figures in the US administration now, they’ll never say “I know this or that person”, but they say “This is what I did”, or “I did this, that or the other before my career in politics”. This is a different culture. They haven’t just brought in their contacts. In this team, everyone’s already done something in their lives, and many of them have made quite a few billion dollars. This accounts for their self-confidence. There will be a different attitude, different behaviour, and a different system of relations. And we Europeans will have to understand and come to terms with it: to some extent we’ll have to adjust to it.

– In that case you agree with consulting firm PricewaterhouseCoopers’ forecast that the importance of globalisation in the economy will decrease, while that of politics will increase.

– Well, I imagine that things won’t continue on their current path, and the US President and his team don’t look like they need to sign up for a training course. They’re not shy beginners, but were successful executives in their prior lives, from where they have gained ideas. The slogan “America First” means that they’ll change the rules of the game in the world economy as we know them; but what these changes will be and how they will come about are for now the subject of guesswork. I’ve said that we shouldn’t enter into a guessing game, but they’ll change the rules, that’s for certain. Exactly what they’ll change and how is something that we should think about. For Hungary this is not an irrelevant question, because, for instance, there’s a great deal of investment in Hungary from the US, where many Hungarian families earn a living – and not a bad living either. What will happen to them? Will they be able to expand or not? This will depend on Washington’s international trade and economic policy. But, I repeat, we should wait until the President is sworn in.

– And what will happen, for instance, regarding the activities of civil society organisations that promote globalisation? This is the noisiest debate at the moment.

– There’s no doubt that during President Obama’s term in office the Americans developed a great many methods of political interference. I could speak about these at length, but there’s no time for that in this programme. Recently we’ve seen everything – including the crudest methods of interference. But as we are allies, and I don’t think we should focus the past. Instead we should hope that the future will be different. I would respond by saying that, in the world we live in, attempts at influencing other states are common in every country, and are practised by almost every country. How should a Hungarian relate to these? This is the question that intrigues me more: not so much from the viewpoint of the Hungarian prime minister – whose duty is to protect the country – but from that of the citizens of Hungary. I think the most important thing is that they have the right to know everything. We must create the possibility and right for every single Hungarian citizen to find out about the participants in public life, if they want to. Who pays them, and where do they get their funding from? Do they receive funding from abroad, or from within Hungary? If from abroad, are they expected to meet any requirements in return? If not, why are there no requirements? Is their funding a gift? How does it all work? In my view, the Hungarian people have a right to understand the context of attempts at political interference within which we live our daily political life. This is one of their fundamental rights. So we want transparency.

– We only have a little time left, so let’s talk briefly about what you started talking about earlier: the situation in Hungary. It’s rather cold, and aid organisations are facing a great many challenges. At the same time, in the past few days we’ve seen that ordinary citizens are also involved in providing assistance – to the homeless or the elderly, for instance. But what is the Government’s responsibility in this regard? For instance, in terms of the capacity of gas storage facilities.

– Right now human life is the most important thing. I’d like to repeat that we have more spaces at the shelters than there are homeless. Therefore I respectfully ask every homeless person in Hungary to go to the shelters, to use the shelters – because if they don’t, they will freeze to death in the night. I ask them to use the services which the Hungarian state is offering them. Secondly, local governments have a responsibility towards people who do have shelter, but who are ill, in need of help or alone. The Government provides help for local governments in their efforts to protect citizens. We help local governments in all sorts of ways, but it is their responsibility to have information about those of our fellow citizens who are in more vulnerable situations. As far as energy supply is concerned, this is when the significance of the reduction in household utility charges comes to the fore. At times like this we generally consume twice as much energy as usual, and so we have to pay more than when the weather is milder. So this is relevant now. Bills are bearable, thanks to the reduction in household utility charges, and they won’t cripple families. Secondly, we have sufficient energy reserves to guarantee the country’s ongoing operation, and so everyone can feel secure in that regard.

– For the past half an hour you have been listening to Prime Minister Viktor Orbán.

(Cabinet Office of the Prime Minister)