Pozsony (Bratislava), 19th June 2015

Stefan Kornelius (as moderator, Süddeutsche Zeitung): Growth has been much slower than in Slovakia and you have recovered just in 2013 from recession. With the declining population in Hungary – Hungary is the fastest declining in terms of population – how do you see, or where do you see the gap for the country to fill in this Visegrad economy, especially if you look at your south east and your east, fencing off the country from its immediate neighbourhood?

If we look back to 2010, let’s say, the perspective for the Hungarian economy was very similar to that of Greece. The comparisons don not fully correspond but – let’s say – five years ago Hungary was in danger of following the same trajectory that the Greeks are currently on. And we have reshaped everything in Hungary. We do not use the term reform, not even structural reforms because it does not express exactly how deep the changes we have managed to introduce are. We instead speak about the renewal of the country. And as a consequence of all these otherwise sometimes ruthless changes, last year we achieved a GDP growth rate of 3.6 percent. Now there is the consensus that this year it could even remain at the same level or will at least be slightly above 3 percent. The question for Hungary today is now – it is a different country then the majority of the countries as the result of these renewal processes – it is not a welfare society, as we call it, it is a labour-based or workfare society. The social system is totally different. The target of the government is full employment. We do not pay social welfare if we do not receive something from the people in return. We have a flat rate income tax. We have probably one of the lowest corporate tax levels for small and medium-sized companies. We do not have an inheritance tax or anything similar. It is a strange combination. Ideologists are regularly in trouble when they have to define what it is exactly. It is like pornography: nobody knows what it is like, but when you see it, you know that is probably it.

So the point is, it is very difficult to define exactly what the hell it is. But the point is that last year we got 3.5 or 3.6 percent, and this year 3 percent, and the target for the government is – and we are working on that – how, through what kind of mechanism we can raise the growth rate to the sector of between 3 and 5 percent. The target is to reach somehow the 5 percent annual growth rate. And we are looking for the instruments, how to do it. I can’t say that we have an answer for that, but we are constantly trying to find new, innovative approaches and economic policies to find a way to do that.

How about investment?  I mean, attracting investment is key to this. What is the sort of asset

you would sell to a possible investor coming to Hungary?

If there is no investment, there is no economic growth. The growth rate itself is the evidence that we have investments. And good news generates other good news. Good news about investments can generate new investments. I think it is going on. Probably not as giant as Robert mentioned concerning Slovakia, but we have some same plans of the same size probably. I think it is moving forward, because the structure of our economy is quite balanced. We have 26 or 27 percent of GDP coming from manufacturing, industrial manufacturing. 25-27 percent comes from high-tech industry. Agriculture is strong. Tourism is over 10 percent. So, I think it is a relatively balanced structure of economy. Therefore we have a feeling of being in a rather secure situation. Financially the country is managed well – as you have just mentioned. I think whatever is going on in the world economy; we have a chance to adjust ourselves. To select those sectors which prove to be and promise the most successful investments. So therefore, the investors are coming. The generation of capital in the hands of the local middle class, let’s say is also going on, which is the challenge of all post-communist countries that have little capital in national hands but it is improving in Hungary. Now we have some companies which – in regional terms – could be global or at least regional companies in energy and other sectors, pharmaceutical for instance, so all in all, we are rather positive. But we do not know the clear answer to the question of how to raise the growth rate from 3 points, up to five or six. We are still looking for that. But next year, if you invite me, I hope I will be able to tell you more.

Could you give a very quick answer to the earlier question I posed on migration because the shrinking workforce, the shrinking population is probably one of the issues you have to tackle? So would immigration be… [a possible solution]?

In Hungary we had a great discussion on that. Hungarians like to discuss that kinds of thing. Big countries don not understand that, because big countries have no feeling of being in danger. If you have 80 million people or 60 million people or 100 million people, it is almost impossible to imagine that the moment can arrive when there are no more Hungarians left in the world, or no more Germans in the world, or British. But that feeling for a country with a population of 10 million – like Hungary – is a quite vivid one. So we can imagine a situation, when we say: “could the last [person] please switch off the lamp”. So, the issue of demography is the number one political issue always. The economy is probably more popular as a topic, but in the heart of Hungarian politicians and analysts, demography is the number one issue, because it is a real threat. And the answer to that in Hungary is family policy. We do not believe that migration or a guest worker system can help us out of this trouble. So, we concentrate on families, and we have a lot of schemes, family schemes to convince young couples to have more children. According to surveys, we can say that the young generation in Hungary would like to have at least one more child than they actually end up having. We think that there is room, spiritually, room for politics to help young couples have more kids. We would like to change the bad tendencies biologically, the natural way. It is a Christian government, so we believe that it could happen.

Prime Minister Orbán, probably you want to go next and focus on migration and on question of ever deeper union?

First of all, just back to the question of prosperity. I think the main precondition to any prosperity in the future in Europe is the stability of leadership. The leadership issue is the most important issue now. And we have some cultural difficulties here in Europe, because the political leadership concept is not apt, it is not suitable to what we need exactly. We were taught during the last one or two decades that leadership means institutions. So therefore the culture of the European Union on leadership is institutional leadership. So what is the job of a leader according to this concept? The job of the leader in that concept is to manage well-functioning institutions. Because institutions will eventually help you out and modernise your society. The problem is that this is probably true when everything is going well. But when we are in trouble, institutions are not able to help. So, you need personal leadership. And personal leadership is not respected at all in the European Union, it is instead considered as a danger. So now we have to change our concept on leadership and stabilise strong leaders all over Europe, otherwise we cannot find answers to the questions which are related to prosperity. Security, migrants, innovation, education, aging society, all need state and leadership programs. So all major challenges can be answered only if you have strong leadership, even a personal one, and that kind of leadership could be stable. So, the political stability of the leadership is the key to prosperity in Europe in the future. That is my understanding. Anyway. Migrants. I just had the chance to already have a press conference this morning on that subject and I confessed that I belong to the political school which follows the following track. When something looks too complicated, go back to the basic questions. And now the whole migrant issue is getting more and more complicated. Moral issues, economic issues, demographic issues, security issues, it is almost impossible to handle it. Therefore, our approach is to go back to the basics. What are the basics? The basics are that each nation is defined by its borders. Borders must be respected. And borders must be defended by the state. That is our job. Full point. Any kind of illegal border crossing is a crime. Defend the border. And if you are a member of the European Union, especially the Schengen Area, you have an obligation to defend your national border, which is the European border, to stop them. Everybody who would like to cross the border in an illegal way: stop them and defend the border to defend your community and to defend Europe. That is our answer to the question.

You don’t think defending the border by building a fence or a wall would be the decision of the European Union or…?

No, no, it is a national obligation. To defend the borders inside the European Union, especially the Schengen, outside border is a national obligation. It is a national imperative. It is not a common task. It is your job because you are a state. That it part of the definition of a state. Therefore, you have to do it. In which way, how to do it, is very difficult but that is a technical issue. The main issue is that it is your obligation to maintain your border control and defend your border. And you can’t wait for the European solution. It could probably help you. Probably, they would send some money – preferably not, anyway – but ultimately, as a state you have to maintain your border. And that is compulsory. I do not believe in a European solution. If we are able to find a European solution in the future, that would be fine. But now, tomorrow morning, we have to fix the border. That is the most basic point, and we have to go back to it. All the questions are very important. But moral and human issues are basically technical issues in comparison to the main issue, which is the obligation of the state to maintain border security.

(Prime Minister's Office)