Xpat Opinion: ‘Pulling Hungary Out Of The Pit’ Of Debt & Low Productivity

  • 3 Jun 2013 9:01 AM
Xpat Opinion: ‘Pulling Hungary Out Of The Pit’ Of Debt & Low Productivity
Without a doubt one of the highlights of last week – after the announcement, of course, from the EU Commission that it would recommend an end to the Excessive Deficit Procedure against Hungary – was a conference organized under the banner “National Interest in Focus – The Hungarian model in a changing Europe.”

Its theme, a European Union in transformation and alternatives to tackle the crisis, has gained currency in recent months as we see increasing criticism of the so-called orthodox approaches. This forum dared to suggest that perhaps the Hungarian model has something to offer to the discussion and among the speakers were José María Aznar, former prime minister of Spain, and Prime Minister Viktor Orbán.

Central to the discussion is the idea that Europe, according to Aznar and others, builds cooperation not by forcing a unified one-size-fits-all system on the member states, but by promoting coherence of individual national cultures and values. Prime Minister Orbán, emphasizing Hungary’s contribution to contemporary debates, focused on the current government’s results. Here are a few of his key points:

“Our opponents say: do not engage in ventures, adapt, do not speak up for yourselves,” stated the prime minister in what was one of his central themes. “We say do start ventures, stand up, speak your opinion and the future is yours.”

In economy, this means the government is dedicated to a strict fiscal policy, in which “living off of the money of others” is unacceptable, a reference to the period of 2002-2010 when the country was financed from foreign and IMF loans and debt-to-GDP nearly doubled. Reversing this vicious trend, Hungary’s economy is becoming “one of the most promising ones in Europe.” The government, said the prime minister, still has a lot to build but has been “able to pull the country out of the pit” of debt and low productivity into which the previous governments pushed the country.

“When I took office, there were 1.8 million people paying taxes in this country of 10 million…Now this number is close to 4 million.” This is what moving from the welfare economy to the workfare economy is all about. The government’s tax policy values work by keeping income taxes low and instead shifts taxes to consumption. Currently, Hungary has a flat tax of 16% on income. The prime minister said he’d like to one day reduce it to a single-digit flat tax.

On law and order, Prime Minister Orbán recalled that when the new government took office, paramilitary organizations were marching legally on the streets of Budapest and the countryside, that there had been a series of murders of Roma people, some of them children. And crimes under the value of 20.000 HUF (70 Euros) went unpunished. Since then, paramilitary organizations are banned, the perpetrators of violent crime are brought to justice and protection of life and property are improving.

On the field of human rights and personal rights, the prime minister presented a study evaluating the government’s first three years. “Some disagree and we may still have to improve, but the country had a long way to come,” Prime Minister Orbán said, reminding the audience that under the previous government, the police, acting under orders, brutally beat demonstrators that protested against Socialist Prime Minister Gyurcsány following his infamous Balatonöszöd speech in which he confessed to deceiving Hungarian voters to get reelected.

“We have had splendid ideas, some of them surprisingly great, while others turned out to be less great than we thought,” Prime Minister Orbán summarizing with a little humor and irony. We’ve made mistakes, he acknowledged, but this government has shown determination to overcome the grave crises that other parts of Europe are suffering, despite no small amount of skepticism about our supposed unorthodox ways. We’ve achieved results that others, even Brussels, are beginning to notice.

Source: A Blog About Hungary

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