8 June 2018

Katalin Nagy: After its first reading of the draft budget for 2019, the Fiscal Council considers it to be credible and realistic. I welcome Prime Minister Viktor Orbán to the studio. Why do the plans include a deficit of only 1.8 per cent? Why do we need to tighten our belts so much? No one would complain about a figure of up to 3 per cent.

Viktor Orbán: Good morning. Indeed, we’ve put together a budget which is massive and earthquake-resistant. Among ourselves we refer to this as a budget for secure growth, as there is the potential for growth in the economy, but only if we are able to protect the economy – and thus the budget – from the effects and the storms of the emerging crisis. Now I’m wondering whether the 1.8 per cent deficit you mentioned is high or low. You see, I’m from an old-fashioned family, in which we were taught that you should never spend more than you have. So in a family budget you cannot plan for a deficit, because in that case at the end of the month you would have to ask for a loan from someone, let's say from your neighbour, and that would be awkward. After a while they would stop giving you money, wondering what kind of family cannot manage its money in the long term and doesn’t cut its coat according to its cloth. So 1.8 per cent means that we are spending more money than we have. It’s true that it’s only 1.8 per cent, but it’s still more than we have. Well, what is our excuse? I’m not happy about this, and I don’t want it to be like this: I want us to have more money than we spend, and for us to be able to put aside some of the money that we’ve earnt.

So there wouldn't be a deficit?

This is the philosophy of the budget – but let me repeat, this is not the most interesting aspect of the budget. That’s right, there wouldn’t be a deficit – indeed there would be a surplus, and we would be able to put money aside and could reduce the debt which has been previously accumulated. But if we take a good look at the budget, we see that this is not such a budget – as it includes a deficit. So what is our excuse, morally and methodologically? Our excuse is that operationally this is a balanced budget. Therefore if we ask how much the budget will allocate to the operation of the state and the country, then we can say that we are spending what we are producing, or earning. The deficit is all accounted for by future investments, and so investments create the deficit. One would be right to think that if more is spent in order to enable faster growth in the future – and one assumes that this money is well spent – then the returns will multiply and we will benefit through completed investments which are funded from the present deficit. This is the philosophy of the budget, but I repeat that this is not the most interesting thing about it. It is no accident that what has caught your eye is the 1.8 per cent deficit, as under previous governments budget deficits have been 3, 5, 9 per cent – or Lord knows how many per cent. This is a stable budget, but I asked the Finance Minister for this to be more than stable: it should be massive and earthquake-resistant, because in the coming years we may well live through an economic crisis. And even if there is a crisis, under no circumstances do I want there to be austerity measures. For this we need disciplined financial management.

What signs are there of this crisis? Twice you’ve mentioned that there could be or there will be one. Is this simply because experts have up until now observed that these changes occur cyclically, after a certain period of time every 10 or 15 years?

Well, this is the case, and there are also such theories. But how does one plan a budget? First of all one tries to understand what will happen in the world economy over the year ahead. The larger a country is, the less it will be affected by this, because the larger a domestic economy is, the more it can base its planning exclusively on the prospects for its own economy. Take for example Poland, which is a country of almost forty million people. Its planning is different from that of Hungary, as we are a country of ten million, and if we only produced what we ourselves consume here in Hungary, then our standard of living would be very much lower than it is today. The standard of living in Hungary is growing and is higher than what one would see in a country of ten million which relied solely on its own resources. This is because we produce an enormous amount of goods, which we sell abroad. This means that the inhabitants of Hungary are clever people who are able to produce goods which we can sell abroad. This means something which I always like to emphasise: that there are world-class workers in Hungary. And as we have world-class workers, our goods are also world-class, and we can sell them. And so trade – the sale of the surplus produced here at home – creates an extremely impressive resource and surplus for the Hungarian economy. For a long time our foreign trade balance has been positive, and now the change in the world economy will therefore affect us more than countries which have larger domestic markets. Therefore we – and the Prime Minister in particular – need a very large radar screen and sensitive instrumentation to monitor what is happening in the global economy, because its effects on Hungary will be rapidly felt. What do I see today? Well, first of all, it’s important not to rely solely on one’s own eyes, as Hungary has economists of Nobel-laureate standing, and it has very distinguished experts, and one must continuously pay attention to them and listen to them. I spend a lot of time talking to them in order to discern what can be expected. What I can definitely say is that the interest rate on credit which can be raised on the international money markets will increase, and therefore the so-called “age of cheap money” – in which one could obtain credit at low interest rates – is now changing, and the process of interest rate rises has begun. No one knows how fast rates will rise, but one can be sure that they will. The second problem, which is even bigger, is that if you take a look at the budgetary situation of EU Member States – particularly the budgets of those states which are members of the eurozone – you will see that everywhere the level of debt is higher than it was at the time of the crisis in 2008; and back then high debt levels were the problem. A number of unfortunate circumstances coincided, and in addition states were suffering from high debt. The levels of debt today are higher than they were in 2008. If we see the arrival of a period of expensive money – of higher interest rates – and people are deep in debt, then they could easily get into trouble. Hungary has successfully battled to reduce its level of government debt from over 80 per cent down to around 72 per cent, and we are reducing government debt every year. In fact the consequences of a period of such high interest rates could floor us. The third factor which we can see for sure is that a trade war is developing in the world, and the United States has initiated a struggle – even with Europe – which will certainly affect us adversely. And so I think that these are just clouds, and it is not yet raining, so a storm has not yet arrived – much less a hurricane. But there are clouds in the sky, and if these create an adverse formation, a crisis could result. Today nobody can say what formation these clouds will take, so one must manage our affairs responsibly; and when one bears responsibility for a country at such a time one must design a budget with consideration, because the budget forms the foundation for our defence. Therefore in the budget we have significantly increased reserves for the protection of the country, so that if there is trouble then we can draw on them. If we need to, we can open our umbrella.

So we’ve spoken about the economy and associated problems affecting Europe. What is the situation with regard to European political stability? How are the countries faring?

In order to reassure the listeners, allow me to say that these indications of international crisis will not divert us from our goals. When a community like the Hungarian nation has clear goals – and in elections people always confirm these, as has happened now – it is the duty of a government to put together a budget and pursue economic policy in line with those goals. So in the coming year it will continue to be important to implement the protection and creation of security, growth will continue, we shall support families raising children, and unemployment will continue to fall – in other words we will take another step towards full employment. And so Hungary does not want to give up the goals. We do not want to stagnate, we want to grow, and therefore we see this as secure growth, the aim of which – the aim of the budget – is to enable us to realise our plans which we have jointly designated, even in difficult circumstances like those of last year and the year before. This gives a sound foundation. We rarely talk about this, because it’s a complex issue in most countries. But let’s leave them to one side and look at Hungary. Before 2010 it was customary to rip up the budget in an election year. Socialist governments, in particular, created an election budget every four years, and then the year following the election was spent repairing the damage. I’ve never agreed to this. If you look at the 2014 election, I didn’t allow that year’s budget to be an irresponsible one, and the same was true in 2018. So we didn’t create an election budget for 2018, but a budget which served the interests of the people, rather than the parties. And now we’re talking about the 2019 budget, about what the situation will be in 2019, and we can start from solid foundations. As regards politics, current developments are to my liking, and they are in our interests. Tough guys have emerged in European politics. Many people think that we’re a little coarser or tougher than is customary in the EU, but now they’ll really learn the meaning of those words. They’ll find that compared with the new leaders who have now spoken out – and who say things that surprise even straight-talking Hungarians – we are sociable little gentlefolk. I see this both in Austria and Italy.

Speaking of Italy, the Italian press has written about a Salvini-Orbán axis. Steve Bannon, President Trump’s former advisor, has said that Viktor Orbán and Salvini are reinterpreting European democracy.

That’s all well and fine, but we mustn’t lose touch with reality. Italy’s population is in the tens of millions, at around sixty million, while Hungary is a country of ten million. I always encourage Hungarians to behave like the citizens of a thousand-year-old country that is proud of its achievements. So let’s never make the mistake of seeing ourselves as being less important than we really are, and let’s not underestimate our work – especially the work of our forebears. There are few countries in Europe – if any at all – which, reaching such heights, have been able to arrange their affairs within their own state over the span of a thousand years. We Hungarians are such a nation, so let us be proud of what we have achieved. But I would also caution against going to the other extreme: it’s as well to recognise our place in the world, as this can be the starting point if one wants to pursue realistic policy. Otherwise one can come a cropper, so to speak. So when it comes to political influence and importance, under no circumstances would I mention Hungary and Italy in the same breath. It’s true that I’m the oldest warrior, or veteran, in the European Union. In 1998 I entered the ranks of European prime ministers in a period when current forty-something leaders and their peers – either from Italy or anywhere else – were more or less fresh out of secondary school or focused on school-leaving examinations. There’s an undoubted difference in experience and routine, and in politics time does indeed confer respect, so Hungary has every reason to demand the respect it deserves. But this doesn’t erase the difference in our weight classes: flyweight should not be confused with heavyweight, otherwise you’ll find yourself flying out of the ring. Therefore, with appropriate modesty, I need to repeat that we must be aware of our experience when forming our relations. It’s true that the Italians have said that they will put an end to migration, and they’ve also said that migrants who’ve arrived illegally must be transported out of the European Union rather than distributed across Europe. I agree on this. Furthermore, the V4 [Visegrád 4] has previously offered the Italian government billions of forints to enable them to start implementing their plans for this transportation process – because removing these people from here will naturally demand the creation of a reception centre somewhere in Africa, where we can take them back to. Luckily, this is not specifically Hungary’s problem, because we haven’t let anyone in, and so there’s no one here to send back. But countries which have made the mistake of letting in hundreds of thousands – or one or two million – migrants will be hard-pressed if they genuinely want to remove migrants from Europe, although that is something which Hungary supports; and, while it is not specifically our affair, it is a common European affair, and therefore we support it.

It’s not Salvini who has been authorised by the Senate, but Prime Minister Conte. He, however, has said that he would like to see refugees distributed among Europe’s Member States, because for them this is a difficult task.

Of course, I understand that, and it is indeed difficult for them. I also understand the intention: the fact is that they want to get rid of people who they shouldn’t have admitted in the first place. I understand that it’s difficult for them, but that’s no reason for them to participate in the ruination of Hungary. Naturally, they will not send anyone here. What I can suggest to the Italian prime minister is that if his country wants to free itself of migrants – which I completely understand – then rather than distributing them, they should transport them out; this is something that Hungary is able to provide assistance with.

On the subject of the migrant quotas, in two weeks’ time there will be an EU summit. It seems increasingly likely that at this summit we can avoid the introduction of the quotas.

Earlier I argued for moderation and realism on our part, but you can’t say that Hungary is trying to get its way by subterfuge and double-dealing – and you certainly can’t say that about me. Years ago I saw that there would be a conflict – one centred on immigration and migration – in which anyone avoiding straight talk and clear action at the outset could find themselves in trouble later on. Now I see that a lot of people are modifying their positions, which now seem to be like ours. But this isn’t helping them, because they made mistakes at the outset, and those who made mistakes at the outset are in trouble now. Right at the very beginning I said that this would turn into a huge conflict – the fence, and the fact that we weren’t letting in migrants – and that this would lead to problems in Brussels and Germany, as well as in our relations with several other countries. But if one doesn’t take a stand at the beginning, if one doesn’t stand up for one’s interests at the beginning, if one makes a mistake at the beginning, it will lead to trouble. So right at the outset we had to speak clearly. This is one of the reasons that Hungary features far more in European public discourse than one would expect from looking at its gross domestic product, its military strength or its economic importance. We had no desire for this, and we need it like a hole in the head; we have quite enough problems of our own in Hungary, but we had to make sure that we didn’t make a mistake at the beginning. And not making a mistake meant that we had to oppose the European elite and side with the Hungarian people. The origin of Europe’s problems today – its political problems – is that what the people want and what they want to do is different from what their leaders want and what they do. This contradiction, this widening gap, is causing political crisis everywhere in Europe. This crisis has passed us by, because Hungary is politically stable, while many European countries are experiencing instability.

I just wanted to ask whether this means that those who at the beginning condemned Viktor Orbán are now starting to envy him.

Well, this is not a personal issue, and no one should envy me – I’ve got quite enough problems as it is. They should envy the Hungarian people – and they have reason to do so.

We’ve been hearing that the Balkan countries are in a state of panic, because it looks like the migration pressure that emerged in this region three years ago has returned – albeit on a new route. And indeed they’re unable to solve this problem, and they’re afraid that they won’t be strong enough to hold back this migration wave and that they won’t be strong enough to secure their borders.

Hungary is a gateway to the Balkans, and so we have a fundamental interest in the maintenance of an orderly situation in that area to the south of us. It is in our fundamental interest that matters in Serbia go well, and it is in our fundamental interest that Serbia is a strong and stable country. This is also why we’re cooperating with them, and there is a shared Serbian-Hungarian interest. It’s also beneficial for the Serbs to have a strong neighbour, just as it is beneficial for us if Serbia develops well. So we’re building our relations on this conceptual foundation, the foundation of the two peoples’ common interests. And in the future we’ll continue to regard Serbia as a strategic country for us. I’ve been investing a great deal of energy in reshaping Serbian-Hungarian relations – which historically have not been easy – and in ensuring that we have a shared future in which each nation can count on the other. So I would like to see closer Serbian-Hungarian cooperation. This is why we support Serbia’s EU membership, we support defence of the borders, and we try to be a good neighbour for Serbia. They are, after all, a country which receives all its gas through Hungary. Of course right now in the heat of June this is not an issue, but from time to time in the winter there are problems with the supply of energy and gas. I’ve been to Serbia and told them outright that for as long as there is a single molecule of gas in Hungarian storage facilities, the Serbs will have gas to heat with. So we’re striving to build relations with them as a reliable and friendly country. If the Serbs need help with border protection – and there are excellent relations between the two interior ministers – we shall give them all the assistance they need. Macedonia is an equally important country, as defending the Macedonian border – its southern border – is also a precondition for our security. We’ve provided help in the past, and we shall also provide help now. We are indeed seeing signs of a new migration wave, of a rising tide following a low tide; it’s rising now, and this poses a challenge. We’ve managed to ensure that now every migrant knows that they shouldn’t follow the path marked by the signpost pointing to Hungary. This is good, but it won’t protect our neighbours, and as we also need stable neighbours we must provide them with help.

According to press reports, George Soros’s organisations are present in every Balkan country. These are the organisations which have removed their masks – like George Soros, who now immediately responds to almost every European political event.

Well, now we must play out in the open. Although we’re strong, as we’re smaller it is always better for us to compete with our visor up rather than down. For a smaller combatant it is always worse to engage the opposition under cover, under the table – or in an underwater struggle, like in a water polo match. That strategy always favours the stronger opponent. So we believe in entering debates, policy, and conflict with our visor up and our face visible. This is how we stand a chance. Whatever our chances, we can say that they are big enough to be seen, and so it’s worth fighting. It’s worth fighting against a force that is stronger than us – against a force like George Soros and his army. We’ve played a role in this network being exposed, as we brought it out into the open, and now they have to openly state their goals. They want immigration. The replacement of populations and peoples is under way in Europe, partly because speculators like George Soros can make large financial profits. They are set on the ruination of Europe, because they’re hoping for large profits. That is just what financial speculators are like, and we shouldn’t be surprised at that – but we must not accept it. On the other hand, there is also an ideological motivation: they believe in a multicultural Europe; they don’t like Christian Europe; they don’t like the traditions of a Christian Europe; and they definitely don’t like Christians. They believe that if they mix us with some other kind of people we’ll be more beautiful, we’ll look better, and Europe will be a better place in which to live. We, however, do not want to mix with others. We are aware of our faults, and we don’t think we’re perfect, but we’re fine the way we are: we want to remain Christian. We insist on our European attitude to life, on our languages, our culture, our preferences, our way of life, our view of the family, relations between men and women and freedom of religion. We do not want to mix with others in order to enable the emergence of a new character for the continent. Christian Europe has fine traditions, and its virtues must be revived. We must return to our roots. Europe can regain its former grandeur if we protect Christian virtues, which are broad, diverse, strong and stirring; after all, we’re talking about a culture in which the heart is central, a culture built on the affirmation of love. This is the nature of Christianity, and we want to defend it. There is enough beauty in it, and there is no need to mix it with anything else. This is our position. This is a huge debate, which fortunately in Hungary was decided by Hungarians a month or two ago. But it is precisely these issues that will be open for debate in Europe in the upcoming elections to the European Parliament, and these will be the election issues. So the European Union elections next May will be about a cultural struggle, a clash of values; and if we lose our focus in those elections we stand to lose a great deal.

The “Stop Soros” bill is now before Parliament, as is an amendment to the Constitution. What is the significance of the amendment to the Constitution, apart from safeguarding the country’s security? Does it bear any relation to our identity?

We have indeed submitted an important proposal, which we have christened “Hungary First”: that is its exact title. It has two parts: an amendment to the Constitution, and an amendment to the Penal Code. The amendment to the Constitution declares what we were aiming for in 2016, but back then the opposition parties didn’t support that constitutional amendment, turnout in the related referendum was not high enough, and we didn’t have a two-thirds parliamentary majority. We have that majority now, and in such a situation one must not hesitate: one must immediately mobilise one’s energy for the defence of the country, and one must ensure the passage of the previously unrealised constitutional amendment. In this we will state that it shall be unlawful to resettle alien population groups in Hungary. Meanwhile in the Penal Code we’ll state that the organisation of illegal migration shall be a criminal offence in the territory of Hungary, and also if someone engages in that activity outside the country: for instance, if they print flyers abroad which encourage people who are not entitled to enter Hungary to come to Hungary. Alternatively, if someone has a lot of money and finances such activities – either directly or through NGOs, for instance – then that will be punishable under Hungarian law, under the Penal Code; and such people can be banned from the country and removed from the vicinity of the border.

Does the amendment to the Constitution have anything to do with constitutional identity?

You see, if we want to do this, we should do it properly, so we won’t just incorporate the couple of amendments needed for the fight against illegal immigration in the Constitution, but we’ll also create the spiritual foundations for such specific provisions. So we’re also talking about a more profound amendment of the Constitution, in which we will declare the protection of identity, and we will declare that a European Union regulation may only apply in Hungary if it does not violate Hungary’s identity. In the Constitution we will also lay down a few principles specifically designed to protect our own culture, which will provide firm foundations on which the anti-migration regulations will later have a firm basis. So the amendment to the Constitution has philosophical depth. And as we have started this process, we also want to resolve a few older issues, which have been the subject of long-standing debate in Hungary – such as the conflict between the protection of privacy and freedom of assembly, and the establishment of a court of public administration. Now that we are amending the Constitution, we will also attend to these. While this is not the large-scale amendment of the Constitution also planned by us, it is a rapid series of timely constitutional amendments covering several provisions. But we plan to launch a project in September: as our Constitution from 2011 has now provided us with sufficient practical experience from real life, some time in the autumn we’d like to launch a review of it, lasting from one year to eighteen months. As part of this process we will review the following: which provisions have been effective, or could be effective; what is now regulated by the Fundamental Law, but without corresponding lower-level statutory regulation; and the identification of gaps in legislation which need to be bridged or filled by constitutional amendment. So there will also be a more comprehensive constitutional amendment. The debate on it will start in September, and I think it will last one year to eighteen months. But regardless of this, we felt that here and now, in the interest of Hungary’s security we needed to submit this first legislative package, and we needed to immediately amend the Constitution in the interest of security and defence.

Thank you. You have been listening to Prime Minister Viktor Orbán.

(miniszterelnok.hu)