In Budapest on Thursday, at a general meeting of the German auto manufacturer Mercedes-Benz, Prime Minister Viktor Orbán said that its Kecskemét factory is a symbol of the German company’s faith in Hungary, and as such is not just another factory among many.
He added that the factory was built in a time of crisis, when “investment was a scarce commodity in Europe”. At the time of the crisis, Hungary was in a worse situation than Greece, and earlier had also “collapsed” financially. During this difficult period, he said, for Hungarians the project was not simply a financial decision, but demonstrated Mercedes’ faith in the future of Hungary.
The Prime Minister expressed the hope that the firm does not regret its investment, as “the figures look pretty good”, and the EUR 1.3 billion it invested has been well spent. The factory provides jobs for more than 3,000 people in Hungary, it provides “the lion’s share” in training the engineers of the future, supports dual training, and participates in the training of specialists. Last year the percentage of its Hungarian suppliers was increased to 30 per cent, he said, which means that Hungarian businesses received orders from the company worth one billion euros.
He stressed that Mercedes-Benz also contributes its share to the Hungarian economy’s growing performance. First quarter GDP growth of 4.1 per cent took analysts by surprise, and this “is not bad” when compared with the performance of the other EU Member States. The Prime Minister said he is not satisfied with this, however, saying that Hungary needs to grow at a higher rate.
According to Mr. Orbán, it is foolish to pillory Hungary when it has Europe’s highest or second highest growth, the most rapidly decreasing unemployment level, compliance with all European financial regulations and falling sovereign debt.
He added that people should begin to realise that there is no successful European economy as a whole without successful European national economies. The 2008–2009 financial crisis was not simply a cyclical one, but structural in terms of competitiveness, he said, and so the response to it must take this into account.
In the Prime Minister’s view European competitiveness is served by what is now a currently successful Germany and Central Europe, but we are yet to see a reformed France or an Italy with strong political leadership. It is important to see “our divorce with the British” end in a win-win solution, but the current status of the negotiations appears to indicate that it will be lose-lose, he said.
Mr. Orbán stressed that we need a fully self-confident, strong and safe Europe: one that is as reliable, as safe and as fast as a Mercedes, and this will also be in the best interests of Mercedes-Benz. Good performance by the individual Member States is likewise a precondition for the success of its international companies, he said. Therefore, he added, the outcome of the debate on the future of the EU is just as important for Daimler and Mercedes-Benz as it is for the Member States.
Hungary is an unshakeable member of the European Union, and “its fate is intertwined” with the development of the EU, he pointed out. The EU’s formerly unquestioned competitiveness is now at risk, and it is losing its former importance both in terms of economic performance and demography. In order to regain competitiveness, each Member State must be allowed to pursue its own economic policy, against the background of accepting certain common regulations; no further powers should be transferred from Member States to community level, he said.
It is important to understand the new industrial revolution correctly, he said; the master plan “Industry 4.0” launched by the Germans will work if it is combined with low taxes and affordable energy prices, and we must therefore create links with regions supplying cheap energy, rather than severing our ties with them. It is also important to increase spending on innovation, as this is where Europe has a competitive advantage over other parts of the world. The Prime Minister highlighted the significance of new types of cooperation arrangement with the emerging regions of China, India and Russia, as well as the importance of involvement in the development of new trade routes.
He pointed out that every fiscal regime must be based on the features of the given country and must also take account of the local employment culture and historical traditions. According to the Prime Minister, Hungary is lucky that it did not adopt the advice of the “troika” (International Monetary Fund, European Central Bank and European Commission) to “hang everything on the same peg”, because “otherwise today we would look like Greece”, which followed the advice it was given, while Hungary went in the opposite direction.
The Prime Minister said that chief among the advantages Hungary has to offer is political stability, which is a precondition for security: Hungary is now one of the EU’s most politically stable countries. It is able to guarantee strict and sensible fiscal policy, with last year’s budget deficit at 1.7 per cent of GDP, and this year’s due to stay well below 3 per cent. He said that there could even be a budget surplus, but there must be simultaneous support for development, promotion of economic growth and control of the deficit. The “economic mix” now in place appears to be viable for many years to come, Mr. Orbán said.
He highlighted the importance of Hungary’s dual training system, which takes account of the needs of investors, and said that we must conquer the old notion that “everyone will work in laboratories wearing white lab coats” and that manual labour will be done away with.