I respectfully welcome you, and especially the new leadership of the Chamber.
Listening to the Minister of Finance – I’m sorry, the Governor of the Central Bank – I was startled to hear something at the end of the speech that I’ve never heard before: the expression “patient Central Bank policy”. I wonder what this means in terms of lending – we probably won’t find out now, but rather in the discussions following the conference.
Before I get to the essence of what I am going to say, if I may I would like to respond to three points made by the previous speakers. The first is that we are in the right place. Few people know it, but I would like to tell you that this complex hosts many more cultural and economic events than sporting events. This shows that if the scales of political foolishness fall from one’s eyes and one can look at something as it is, then one can see that economic development initiatives such as the building of this stadium are sensible things. One does not like to admit one’s mistakes – that is just how one is made that way. But here, unfortunately, I have to admit to a mistake. Looking at the attendance, this venue we built should have been bigger.
President Elek Nagy spoke before me about the adoption of EU standards. Here I would like to ask for assistance from the Chamber. The state is not well-suited to the adoption of EU rules to a reasonable extent and at a reasonable pace. It is not worth imposing such expectations on us. I am trying to make such demands of my colleagues, of the bureaucrats, but I am failing, and I have to admit that I will continue to fail. For those whose job it is to transpose European Union rules, there is only one criterion they follow: their swiftest and fullest possible transposition. I cannot counteract this, because then they will not know what their job is and why they are being paid. So the well-known phenomenon of transposing EU rules at a rate that is faster than necessary and deeper than necessary can only be prevented if there is another actor which has an interest in a sensible transposition at a suitable pace and degree. This actor could be the Chamber. If you do not support us policy makers from here, then the logic that will prevail will always be one which seeks to adopt rules as quickly and as fully as possible – even if this does not seem reasonable or beneficial for the Hungarian economy as a whole, or for certain segments of it. Therefore, President, I ask for your help here to support us in taking the other direction, so that when we decide on the depth and pace of the transposition of EU rules there will be a different approach.
And finally the President concluded by saying that – to quote “Öcsi” Puskás – we need to play fine attacking football. I would like to report to those present that there will be no shortage of that. This will be a year of breakthroughs – and breakthroughs can only be made by attacking. I recall a dressing room scene when our late colleague Jenő Lasztovicza announced the line-up for our parliamentary team in a match against the British parliament. I take a look at the line-up, and see that everyone is a striker. I say, “Jenő, who will be playing in defence?” And Jenő says, “Well, our opponents!” So if you want to picture 2025 as the Hungarian government intends it to be, this is the way in which you should picture the year ahead.
As far as what I have to say, thank you very much for the invitation, President. And now that the Chamber has a new leadership, the most important issue I need to talk about is the relationship between the Government and the Chamber’s new leadership. We can best understand this in relation to how it was earlier. Before 2010, before the 2010 elections, we concluded the first significant agreement between our future governing party and the Hungarian business community at that time. Back then, VOSZ [the Confederation of Hungarian Business] was still at the centre of the agreement, with Sándor Demján signing it before the election. Routine counts for a lot. There were five points in the agreement. At the time we shook hands in public, on a podium, pledging that we would fulfil these five commitments, and that entrepreneurs would support the Government and the future governing party.
Four out of the five points were achieved. The first point was “Within four years we shall reduce the tax burden on business to the regional level.” Before 2010 the level was much higher. Today we have the lowest corporate tax and the third lowest VAT in the Union. So, as the Finance Minister, the Minister for National Economy, would say: “check”. The second agreement was to launch public capital and loan programmes. The previous speakers spoke about nothing else. We also have a large programme worth 1.4 trillion forints, named after Mr. Demján himself. And the Minister for National Economy has already spoken about the Széchenyi Card and the government backing for it. Our third agreement was to create one million new jobs over ten years. At the time this was the object of public amusement. They did not laugh at me – and this was not because of me, but because of Sándor Demján. So it was more of an object of public amusement. Nobody believed that it was possible, but from the numbers we all saw that it happened. And finally, our fourth agreement was that 50 per cent of EU money should go to small and medium-sized enterprises. I can give you an average over the last five years: in the last five years 51 out of every 100 forints of EU money has gone to SMEs. So four out of five commitments have been met, and one has not. It would have been better, of course, if we had done all five, but talking honestly to one another requires that we also look at the question of which of us has done better in proportional terms. We promised to deliver five out of five, and you promised to support us. I think that if four out of five businesspeople support us, then we are quits. I am afraid that is not yet the case, so we can come back to the fifth point later.
Ladies and Gentlemen,
The second era is linked to President László Parragh. During that time we also concluded agreements with each other. These were the following. The Hungarian economy should grow at a rate above the European Union average: check. The investment rate should be above 25 per cent: here, perhaps, a year or two of deviation is forgivable, but essentially it has happened. Unemployment should be below 4 per cent: this is where we are on the borderline. Let the Government have an investment policy and support capital export: we can say that since 2010 the level of our capital export has doubled, and this is a success. When those Hungarian entrepreneurs who are successful at home and who take it upon themselves to go abroad and prove themselves there are accused of benefiting from government support, I can only ever exonerate them. Because if someone is competitive abroad, then obviously he or she will also succeed at home, because he or she is competitive and has a good track record. I would therefore expressly encourage anyone who in the future wishes to continue to cooperate well with the Government to go abroad and prove their competitiveness there. And in doing so they will also be helping us politically. And our sixth agreement with László Parragh was that there should be a significant reduction in corporate taxes. Since 2010, the tax wedge has fallen by 6 per cent, so I think we have kept our agreements with that period.
What about the new leadership? From what I have said, it is clear that the new leadership of the Chamber could not have had a better partner. In the business world, too, we have an outstanding record on delivering on the agreements we make with each other, and we stand ready to do this. This was also the subject of the meeting preceding this conference, when I understood what the President was asking us to do. This is also what he talked about here. The tone was not exactly the same, as in a closed meeting more forceful expression was allowed. The President is calling for tax simplification, so to speak, and bureaucracy reduction – and he sees one form of tax reduction as being tax simplification. I think we can agree on that. I would like to indicate that the Hungarian government is prepared to conclude an agreement with the new leadership of the Chamber, as we did with the previous ones; and the agreements should consist of clear, achievable points, for which we should set a deadline. I propose that the things we are about to agree on should be done by 1 July, and that this agreement should also include tax simplification, tax reductions and a reduction in bureaucracy.
Ladies and Gentlemen,
What I can tell you about Hungarian economic policy for the future is that its philosophical foundations – its most essential elements – will not change. So in terms of economics, strategy and direction you need to count on what you have known for the last fifteen years. We are – and shall remain – a government of tax cuts. There are all sorts of rankings to help you judge tax systems internationally. In the Tax Foundation rankings – which is what we look at most – we have the seventh most competitive tax system among developed countries. A legitimate question is why we are not number one – we need to work on that. From the recent announcements, particularly on the lifetime exemption from income tax for mothers who have children, you have seen that essentially the Government has – to put it straightforwardly – introduced an element into the tax system that will determine its character in the longer term. One cannot jump in and out of this. So we will have a tax system based on a three-way combination. The tax system must encourage people to work, encourage them to have families and children, and achieve all this through low taxes and tax breaks. In this solution work, family and tax are combined. We are introducing this now, it is starting to happen, and we have already started to move in this direction with the family tax credits. But the structure of the tax system will not be changed by the introduction of the lifelong tax credit, because you cannot take away the lifelong tax credit from those who have received it. Anyone who has been in politics knows exactly that this is the case, so in the longer term you should settle for this tax system.
The second thing – which is important for the predictability of our future – is that the most important consideration will be job creation. So we are not going back to the socialist way of doing things, and we do not want to bring back a socially-based, welfare-based economic system by budgetary distribution, by distributing budgetary resources that do not exist. We think in terms of a work-based system, and we want to reward, recognise and value performance. So job creation will continue to be one of our most important objectives. I do not agree with those who say that in Hungary we are running out of Hungarian workers. According to our analysis, there are still about 300,000 people in Hungary – Hungarian citizens – who can enter employment. Of course this will require training, a more regionally balanced economic policy, and many other things; but there are still at least 300,000 of our fellow citizens who would like to work, but who do not yet seem to have the opportunity to do so.
The third pillar of economic policy which will remain constant in the coming period is support for businesses. Earlier, in order to avoid a later communication skirmish, the Minister for National Economy simply referred to the fact that the 320 billion forints that you have been given through the Széchenyi Card would be sufficient for everything. For example, lifelong income tax exemption for mothers of three costs somewhere in the region of 150 billion forints a year. With the Széchenyi Card we are giving businesses 320 billion. I would just like to point out that for a government this is a very clear decision with serious political consequences: whether it should distribute such a large sum of money in line with a social, left-wing approach, or whether it should instead give the money to support businesses – so that you can be 320 billion forints better off and be able to run the economy. This is a question of values. I am convinced that the efficiency and economic strength of the country will begin to decline if we do not make this clear that we value entrepreneurs and businesses, if we do not recognise them, if we do not support them, if we do not make it clear that, in fact – since we live in an economy based on the private sector – it is they who run the whole economy, and not the state apparatus and not politics. Therefore the Government will continue to support businesses and value the work of Hungarian entrepreneurs. To show how much this is true, during the past three years of war, since 2021 – the last year before the war – we have pumped an extra 400 billion forints into the economy, specifically to support businesses. This has been especially directed towards small and medium-sized enterprises. As we are talking about breakthroughs, we are planning that this year this will also apply to businesses. Compared to 2024, we will be pumping an extra 1.73 trillion forints into the Hungarian economy through entrepreneurs – mainly small and medium-sized enterprises. This is an increase of almost 50 per cent.
Likewise, advocacy for investments can be counted on as a permanent feature of government policy. There is, of course, a technological shift, which more knowledgeable people speaking before me have talked about. But I would just like to point out that we cannot be successful if we do not keep pace with the technological shift that is happening in the world. This is more than digitalisation. It is indeed digitalisation, but it is more than that; and – in addition to various other economic considerations – this is one of the reasons we cannot do without the investment of foreign working capital in Hungary. We need to bring in the foreign capital investments that are assisting the Hungarian economy in this technological shift. When we give foreign companies opportunities in Hungary there are many different aspects to consider, from job creation to the issue of proportionality across our regions, and I will not list them all here. But in the future one of the most important aspects will be that of technology. Foreign investment that helps the Hungarian economy to make technological changes is particularly welcome. Incidentally, as a proportion of GDP the amount of foreign capital deposited and operating here is the second highest in the region – or perhaps in Europe, second only to the Czechs. Our figure is 55 per cent: FDI stock in Hungary is 55 per cent of total GDP. The Czechs have a slightly higher figure, putting us in second place.
And finally, since the Governor of the Central Bank has spoken about mysterious, patient Central Bank policy, a few words must also be said about the issue of financial responsibility. The Minister for National Economy had full authority to say what he has just said here about how far we can stretch. So whatever happens in the world, we must not renounce the principle that, after debt servicing has been accounted for, the budget must be balanced. This is the room for manoeuvre that the Minister for National Economy has. If our primary deficit also goes into negative territory, it could cause financial instability in the country that we cannot afford. So if this is the meaning of the patience mentioned by the Governor, that the Government does not rush but understands that it has a certain room for manoeuvre beyond which it must not go, then this may be the yardstick we need to adhere to. I would also like to bring your attention to something that I hardly ever see in public discourse, and that perhaps you do not even know about. This is that, over the last fifteen years, Hungary has had a government that has reduced the budget deficit in every election year. Our opponents say the opposite, but there is no factual basis for their claim. The fact is that Hungary has had a government that has cut the budget deficit in 2014, 2018 and 2022 – regardless of the fact that there were elections. This shows that we are committed to fiscal discipline. We cannot – and I shall not – yield on this.
If you will allow me, I would like to say a few words on a subject that has been aired by several of you here: the unfolding international environment. But it is not unjustified for me to contribute to the discussion of it – mainly because I have just come home from the witch’s kitchen. This was the subject under discussion in Brussels on Thursday, and so perhaps I can provide you with the information to help you not only understand the world, but also to help you adapt your own calculations. First of all, I would like to repeat that I had good reason to veto the document on Ukraine signed by the other 26 European Union countries, and to exclude Hungary from it. That document – which, of course, everyone is talking about but no one has read – is actually about having to send even more arms and even more money to Ukraine in the coming period: about Europe giving arms and more to Ukraine, and sending it from Europe to Ukraine. For three years Hungary has fought to stay out of the war. For three years we have not sent weapons and for three years we have not sent money to Ukraine. Now, when the Americans finally share our position, to give up this national position would have been more than a mistake: it would have been a crime. For three years we have fought against international attacks, in order not to drift into the war. We have not sent weapons and we have not given money, except for humanitarian purposes. Whatever the pressure we are under, it would be a mistake to give this up at the last moment, and so I ask you to support the Hungarian government in holding firm to our pro-peace position. During the three years of the war, the Hungarian economy has lost 20 billion euros. This is the loss to the Hungarian national economy. If there is any country that has an interest in seeing the war end as soon as possible, if possible tomorrow morning, if there is any country that has a vital interest in this, it is Hungary; because for a national economy the size of Hungary’s, losing 20 billion euros in three years is a very serious loss of blood. And let us be glad that at last someone other than us – and the United States, a great power with weight considerably greater than ours – is saying the same thing that we are. Let us not give in to the European siren calls to send more weapons and more money, but let us defend ourselves and stay out of it. Those here at home who criticise the Government for not signing this 26-country agreement are in fact saying that we should send more weapons and more money to Ukraine. That is a mistake; let us not take that position, let us not drift into this war!
What will happen after the war? This is perhaps the most important question in the international environment. First of all, we do not need to worry about Hungarian security, because after the war there will still be NATO, and Hungary is a member of NATO; and in fact the owners of NATO’s two largest armies – the United States and Türkiye – are Hungary’s two closest allies. So anyone who is worried about Hungarian security does not know what they are talking about; because as long as there is NATO and Hungary is in the close relationship it enjoys with both the United States and the Turks, we will be at the heart of NATO. And through NATO – and, of course, through our own Hungarian national army – we are able to guarantee the country’s security. So there will be military security. This uncertainty factor can be safely discounted, and it is not worth building it into your calculations, into your business calculations.
The second thing that will certainly happen after the war is the strategic alliance between the United States and Hungary. This has already been established politically, and we are now giving it an economic form. Our Foreign Minister has just been in Washington, and there will be a Hungarian–American economic cooperation package which will be of considerable assistance to the Hungarian economy. This is good for us, even if in the meantime there is a tariff war – which Hungary will of course lose, as will every other European Union country. We do not yet know the extent of this, but we can be sure that there will be one. This is not only because of what you might read in the economic press: that the Americans want to reduce their foreign trade imbalance and their disadvantage related to the Europeans – at least to reduce their losses, or to gain an advantage. But it is also because of what the Minister said: this is the best way to enable everyone to understand that it is best to invest in the United States, because then they will not have to pay these tariffs. This is why the big German companies are rethinking their own investments and are making huge investments in the United States instead of in their own country, in Germany. We need a package with the Americans that limits this impact on the territory of Hungary, or that can reduce it to zero. We have the opportunity to do this, as, for example, we do not have a double taxation treaty with them. This is because the previous US administration terminated it as a punishment, and we are negotiating its restoration. There will also be other economic elements which here in Hungary will be able to compensate us at the level of the national economy – both in monetary and real economic terms – for the loss caused by US tariffs against Europe.
What else will there be? Sooner or later there will be a European Union policy, because it is no accident that those who have spoken before me have been able to identify the intentions of all the global political players with the exception of the European Union. This is not an indication of the limited capacity of the speakers, but of the situation. I can give you a first-hand account of this, because we talked about it on Thursday. It may be justified to criticise a leader in the way we criticise the leadership of the Union – and you know that I am not in the habit of holding back on that. It may be justified, but for the sake of fairness we must also bear in mind that the change needed here is on a scale that has not been seen in the last twenty or thirty years. So the European Union must do something that runs counter to the logic of how it has operated up until now – and I am not at all sure that it will be able to make this shift. When he wanted to illustrate this phenomenon for me, the Minister for National Economy used the term “developmental state”: the Member States of the European Union – and as a result the entire European Union – must change from fiscal conservatism to the logic of a developmental state. This is the term he used. It is an apt term to describe the essence of the problem. To put it more simply, the crux of the problem is that the most important rule the European Union has ever had is that the budget deficits of the Member States must be below 3 per cent – period. Anyone who deviates from this will be punished according to a predetermined system of penalties. We can see that our competitors are not doing this, and the figures we have heard suggest that they have not been doing it for decades. The moment has come for the European Union to face the consequences of this.
Since the strongest state in the Union is Germany, the economic philosophy of the European Union is in fact determined by the Germans – if not entirely, then to a decisive extent. So the economic philosophy that prevails in Germany is the economic philosophy that prevails in the European Union. Incidentally, from my specialist point of view it is a little cruder than this, because the coalition configurations that operate in Germany tend to operate in Brussels. But that problem is perhaps less relevant for you. The Germans are facing a tough decision. We have talked about it here in the past, I do not know if it is justified, but they are certainly on the verge of deciding to abandon classical German fiscal discipline. Let’s talk straight! The plan that I was informed of on Thursday is not of 500 billion euros, as we have seen here, but the creation of an 800-billion German national economic package. This 800 billion euros will be spent on infrastructure development – whatever that means – and on increasing military capabilities. Let us now put aside the political implications of this. I just mention this because it is also extremely interesting, and anyone inclined to do so should think about it. What we are talking about is commencement of the rearmament of Germany in the middle of Europe. There will be a German army. This will be the biggest in Europe, bigger than anyone else’s, and the industrial base for it that they want to build with this money will be far bigger than anyone else’s. We have not seen anything like it since the Second World War. At the moment there is no answer to the question of whether the Americans and the Russians will let this happen – we do not know what their attitude is. For the time being there is confusion on this. This is a new plan by Germany. The reactions to this challenge from third-party players are still only superficially known. What we can say for sure is that the Russians have no means of preventing it; but incidentally if the Americans want to intervene, they do have the means – mainly through the dollar–euro exchange rate. Anyway, let us put that aside for now. What we do know is that the Germans have made a decision: an 800-billion-euro package, fresh money in the economy. This is not Brussels money, because the numbers from Brussels are never true: they are lies – or perhaps I should call them exaggerations. This is because in Brussels they do not say, “We’ll put this much money on the table and then this is what we’ll have”, but that they put down some money – we don’t know exactly how much – which through various financial transactions will mobilise a certain amount, and that is what they declare. But this is not fresh money: it is a resource made available through loans, collateral, guarantees and other instruments which have been mobilised by fresh money. But this is not what the Germans are talking about: the Germans are talking about real money, about 800 billion euros, which is on the table. Then from this credit, collateral and so on can be created. So the amount that will actually go into the German economy will not be 800 billion euros, but much more than that, through the multiplier effect of financial instruments. I cannot tell you whether in the medium term it is a good thing for Germany to be rearmed and for there to be a large German army again, and for Germany to abandon the debt brake rule and borrow an enormous amount of money that it does not have: the 800 billion euros is not now there – it will have to be taken out as a loan and put on the table, to then be used as collateral for further loans. So whether this will be good for Germany and whether it will be good for us in the medium term is something I cannot tell you, because there are both opportunities and threats on the table. I can tell you whether it will be good in the short term. In the short term it will be very, very good, and in the short term it could not be better news for the Hungarian economy. Because if there is truth in the correlation – which perhaps all of us in this room are aware of – of how the Hungarian economy is linked to the German economy, and if money is injected into the German economy and the German economy experiences economic growth and a corresponding economic upturn, this will be reflected almost immediately in the Hungarian economy through a certain rapid transmission system, and will boost the performance of the Hungarian economy. Once again, I have no answer on whether what happens when the Germans become a debtor country will be good strategically and in the medium term, but in the short term I am quite sure that it will be good for you and for the entire Hungarian national economy. You know the Germans: when they do something, they do it seriously – when they do the right thing, and even when they do the wrong thing. On this, too, they are serious. And I only mention this now so that if anyone has any reservations about the quality of Hungarian democracy, I can dispel them. Because in order to abolish this debt rule, a two-thirds majority in the German parliament is required. As you know, there were elections there last week. There is a series of negotiations on the formation of a government, planned to be complete by Easter. This government will somehow have a majority, but not a two-thirds majority. So how are they going to get rid of the debt brake, which can only be done with a two-thirds majority? By calling a final sitting of the failed, defunct German parliament that has just been voted out of office. In this sitting, the majority in the current parliament – that is to say the government majority in the parliament that is now in the process of being phased out – and the main party in the future government, the CDU, will together form a two-thirds majority. And the parliament that has already been voted out by the German citizens will take the decision by a two-thirds majority to abolish the debt brake. That is the situation! This is legal, because it is possible under the German constitution. We do not want to interfere with that, but call off the dogs when talking about Hungary and the rule of law. This is what I am convinced will happen in Germany. If I am correct in my supposition that German economic philosophy determines the economic philosophy of the European Union, the consequence of this for the European Union will be that the 3 per cent rule will also be broken by the European Union. So what has been the rule until now – that each Member State of the European Union can only afford a 3 per cent deficit – will also be a thing of the past, and for us too.
There are breakpoints – probably two. The first is that up to a certain limit the cost of defence spending does not have to be added to the 3 per cent. So let us say that we spend 2 per cent. It will not be that good, but for the sake of simplicity, let us calculate that if we do not have to add this 2 per cent to the budget deficit, then our 3 per cent deficit could actually rise to 5 per cent if we so decide. This is one of the breakpoints. The other is that the Union, after the huge debates that are still ahead of us, will want to borrow huge amounts of money, will want to take out loans and – after Germany has taken on debt – will want to put the whole of the European Union in debt. The Hungarian constitution does not allow us to support this, and it states that such borrowing, which is borrowing outside the current seven-year budget – the RRF [Recovery and Resilience Facility] was an example of this, if you remember – requires the approval of two-thirds of the Hungarian parliament. So if Brussels goes down this path and wants to boost the European economy with all kinds of loan schemes, then in the coming months we are going to have debates about what should happen to Hungary’s participation in these programmes. We will have to discuss this then.
And the European Union wants one more thing: it wants to keep Ukraine alive. This means that, without our participation but with consequences for us, the decision has been taken that Europe will need to finance a Ukrainian army of 800,000 – which the Ukrainian President, who was also present, wants to increase to one million after the war. This is because he has announced that Ukraine cannot devote a single penny to financing it, and the Americans have announced that they will not be involved. So now the European Union wants to saddle itself with the financing of a million-strong army outside its own territory. We have to finance the Ukrainian state, because it cannot finance itself. Everyone remembers that before the war it was on the verge of collapse. So the European Union wants to finance the functioning of the Ukrainian state, while at the same time seeking to rearm itself. It wants to provide European funds for this, and in order to compensate the Ukrainians for not being admitted to NATO, it wants to fast-track their membership of the European Union. Earlier I used to be wary about judging particular decisions taken in Brussels or Germany; but I am certain that this decision in Brussels will destroy the European economy, and this is why this must not happen. Where we have a decisive say is on membership of the EU: the other financial engineering instruments can be created without us, but membership of the EU cannot. And now that the process of negotiating Ukraine’s membership of the European Union has reached the substantive stage, and so far we have established the forms and frameworks, we must now make it clear whether or not we want to take on the associated financial burden. This is an issue of such gravity that it could determine Hungary’s fate in the medium and long term. And so it is important that we get to know the opinion of everyone – including you. I would therefore urge all members of the Chamber of Commerce and Industry – and their employees – to take this seriously, to consider it, and to express their opinions in the advisory referendum.
Ladies and Gentlemen,
So on the basis of the strategic foundations I set out at the beginning as permanent elements, the question is what Hungarian strategy will look like in the coming period in the international environment I have just described. So the Hungarian strategy is based on the following idea: no isolationism of any kind should be embarked upon. We put this in positive terms as economic neutrality. So no matter which way the wind blows or where lightning strikes, it is in the interests of the Hungarian economy to have the best possible economic relations with the United States, with China, with the EU and with Russia. And in this we must not accept any ideological or political constraints; because then, as you can see, we will be caught in the middle of a tariff war in situations from which we will find no way out. Therefore from the outset it is a good idea to give ourselves the greatest possible room for manoeuvre and to establish the most sensible relations possible with everyone – from the United States to the Russians – on the basis of economic neutrality. This means that we must not end up in the situation that the European Union has manoeuvred itself into. Today the European Union is an isolated player in the world economy. It is at war – or at least in a serious political dispute – with the United States of America. It has just adopted a document that it has drawn up in opposition to the US peace initiative, in open conflict with the United States on the issue of war. It is isolating itself from China – because the Union itself has initiated tax and tariff initiatives, and therefore a conflict with China. And from the beginning of the war it has isolated itself from Russia with sanctions – especially energy sanctions. Today the EU is an isolated entity in the world. It is in conflict with America, China and Russia. It is isolated. Hungary is not part of this: we have the best possible relations with the United States, with Russia and with China. Therefore, when we talk about isolation, it is true for the Union, but not for Hungary.
The second element of the Hungarian strategy in the coming period is peace. I have spoken about this, and I will not repeat it. We cannot endure three more years with losses to the Hungarian economy of 20 billion euros. So we need peace.
The third element is tax reduction. I have already spoken about this, and in the longer term we are now also consolidating a Hungarian tax system that combines family, work and tax reductions.
The next pillar of the strategy is the Sándor Demján Programme, and I ask the Chamber to help us implement it. We have developed a framework. But as I have said, the economy is not run by the Government, unfortunately not even by the Minister of National Economy, even more unfortunately not by the Governor of the Central Bank, and not by the Prime Minister. The economy is actually run by the economic actors, the entrepreneurs: by you. There would be no point in us announcing a Sándor Demján Programme if you did not help us to implement it in a way that is best for businesses. We urge you to participate in this.
And finally, EU money will arrive, and is arriving. EU agricultural funds are arriving, EU cohesion funds are arriving; they are arriving in the upcoming period. There will be points at which we will have to fight for another tranche or another amount of money to be drawn down, but we know what those points are, we know when they are coming, and our negotiating positions are set. So we will have access to every penny of European Union funds, just as we have access to them today – because European Union funds are arriving all the time, both from the Cohesion Fund and from the European Common Agricultural Policy.
So, all in all, what I can say to you is that this is the situation, this is our strategy, this is the year of the breakthrough that we have envisaged. You have heard, you have seen, and you are best placed to know that there is a lot of money in the Hungarian economy, there is a lot of money in businesses, there is a lot of money in households, and there is huge lending capacity in the banks. This year the challenge will be to mobilise that money and to put it to work in a meaningful way for economic growth and productivity. This is possible: we have the people, we have the programmes, and I very much hope that you have the appointed, elected leaders with whom we can carry out this process of creating economic momentum.
In conclusion, I will perhaps add this much – not to bore you, but just to show you that when I talk about a lot of money I am not talking through my hat. In Hungary there are currently 4,682 state investment projects. The combined value of these is 12.5 billion forints. There are 2,949 projects under construction, worth nearly 6 trillion forints. Thirteen priority building construction projects are underway. Ten major road projects are under construction, worth 1.27 trillion forints. In rail development there are 29 projects – not including the Budapest–Belgrade railway line – under construction, worth a total of 754 billion forints.
It is also worth acknowledging that we will not give up on the development of Budapest, because Budapest’s economic weight is decisive for the national economy. But I must also add that the previous levels cannot be maintained. So the fact is that the development level of Budapest stands at 165–167 per cent of the EU average. Huge investments are underway in the capital city right now, and I will name some of them. There is the Southern Rail Bypass project, Pázmány Péter Catholic University, we are talking about hundreds of billions of forints, the renovation of the Buda Castle district, and the new tramway – to name just a few. So there are major development programmes in Budapest. But we cannot launch any new ones in Budapest at the moment, for the obvious reasons mentioned here. We must direct the available development resources to provincial targets on a regional development basis, mobilising them in order to enable Hungary’s regions to narrow the development gap with the capital. These are huge numbers. Just as we have succeeded in setting the eastern part of the country on an industrially innovative, vigorous and dynamic course enabling it to catch up with the country’s most developed western regions in the near future, I expect that we can achieve the same in the country’s southern regions, where we have the greatest problems – both in Transdanubia and the Great Plain. We will concentrate these development resources there, and then the strategy that I have presented to you here will not only be implemented, but it will be implemented in a way that is fair for the country.
Honourable President Elek Nagy,
Thank you very much for the invitation. Elek, thank you very much for the opportunity to meet you today. Thank you very much for outlining an agreement. Once again I would like to draw your attention to the fact that I would like us to be able to achieve this by July. The annual mid-point in government and budgetary policy is 1 July; and if you want to achieve something this year, President, if you want to achieve something, Dear Elek, then the agreement must be reached a month or two before July, so that we can achieve it by the time the legislative session ends in July. On tax simplification, tax reduction, cutting red tape, the Government is 100 per cent at the disposal of the Chamber.
Thank you very much for your attention.