22 September 2017

Gábor István Kiss: Good morning everyone. You are listening to 180 Minutes, Kossuth Radio’s morning news magazine. Sitting beside me is Prime Minister Viktor Orbán. Good Morning.

Good morning.

This week saw the beginning of what I suppose we could call the final full session of Parliament prior to the election. You drew MP’s attention to the country’s economic performance and to the economic indices. This was justified, as the figures are truly compelling. It also emerged that the Government’s strategic goal continues to be for the basis of everyday life in Hungary to be an increase in living standards attained through work. There is a general approach related to the country’s economic performance, and, as you’ve also mentioned the following comparison before perhaps you won’t object if we begin our conversation with this question. When will we catch up with Austria?

I can’t answer that question, but let’s return to it later. Parliament usually begins its sessions with a report from the Prime Minister on the period since the end of the previous session. This also includes the final period of the second quarter, since economic data is published every quarter. And at such times we always play a game in which the opposition behaves as if the Government were trying to speak about its achievements. That is not my intention at all, however: I want to speak about the state of the country. And when I talk about economic results or promising trends, I’m not talking about the Government’s economic policies – although there would be good reason to do so – but about the economic performance generated by the work of the more than four million people currently in employment in Hungary. So I’m speaking about the performance of the country. It helps for a country to have a government that pursues a rational economic policy, but the success of the economy is, after all, dependent on whether people believe that it is worthwhile to work and to make renewed and increased efforts. If they believe this and see that this is the case, then the economy will grow. If, however, they see that the money they earn slips through their fingers because, for instance, it is eaten up by inflation, then commitment, effort and the will to work will decline. From that point on economic performance will not increase, but begin to decline. Currently, however, it has become a generally accepted fact that anyone in Hungary today who wants to work and is capable of working can find employment, and although they may not find their dream job, they can find work and can support their family. And they may also feel valued and appreciated, as for the past fifty months or so wages have been continuously increasing.

Yes, you’re referring to the increase in real wages, which could reach double figures for the whole of the year, and which is a major success. If we look at a family with three children, since 2010 their so-called real earnings – their net income – has almost doubled.

This is because for families with two or more children, every year we have significantly increased the level of family tax allowance – the amount they can deduct from their taxes. As a result certain families are experiencing a higher increase in their net income than in their gross earnings. This is an unusual economic phenomenon.

In Hungary payroll taxes are also decreasing, and as a result real wages are increasing. Yesterday the Minister for National Economy announced that tax burdens on employers could be reduced from January. If we assume that the country’s economic performance is as good as it seems to be from these figures, have we – or rather the Government – given up on the aim of an income tax rate in single figures?

The best rate is zero. The best tax is one that doesn’t need to be paid. Everyone who has ever paid taxes knows this full well. Unfortunately this is not possible, because somehow we need to finance public goods such as education, public safety, defence, health care and so on: the services that we all need. This means that some kinds of tax will always exist: there will always be taxes. I’m a supporter of a gradual reduction in tax burdens related to employment, because this will promote the feeling that work is worthwhile, and this is what the state also promotes thorough low tax rates. This is why I also believe that it is better to impose taxes on spending, which is why the level of VAT in Hungary is higher than the personal income tax rate. I believe that the state can only truly generate revenue when people spend their money, and I think that this is also fairer that taxing income – something which can often also be concealed. We all remember that before we managed to transform the Hungarian economy into a work-based economy the personal income tax rate was high, and people who were cleverer, richer and more skilful regularly concealed part of their income, which therefore couldn’t be taxed by the state. This led to poorer people concluding that the rich can always find loopholes in the tax system, and that therefore they should be able to do the same. This became a kind of unhealthy national sport, in which the criterion of fairness was lost, and gradually the economy approached a state of paralysis. I would like to remind everyone that in 2010, only 1.8 million of the country’s 3.7 million workers were paying tax. It’s a wonder we survived. Now every one of the country’s 4.4 million workers is paying tax.

In the meantime, the Government is also thinking about possible ways of further reducing the burdens on certain social groups, which obviously is also a consequence of our economic performance. I would like to speak to you a little about the student loan scheme, which is also unique in that the Government’s decision to increase the student loan budget and make the other student loan construction interest-free has not been dependent on the charity of the banks. This means that when banks waive these interest charges they aren’t doing so out of charity: it is the Government that undertakes to pay this money.

When we talk about the economy it is important not to forget two important groups, two large groups of the national community: one is pensioners, and the other is students. The members of one group have been part of the economy in the past, and the members of the other will be part of the economy in the future; but I wouldn’t like to think about the economy without thinking about pensioners and without thinking about students. The commitment I made in 2010 to protect the value of pensions was the basis for an agreement with pensioners that for as long as our Government is in power there can never be a repeat of what happened under the socialists: people having their pensions taken away: partly directly, by scrapping the “13th month” additional annual payment; and partly indirectly, by allowing inflation to exceed pension increases. I promised that this will never happen again, and I feel that pensioners can also see that we have made every possible effort to abide by this undertaking. By this I mean that in the period to come we can also assume that the Hungarian economy is strong enough to ensure that today’s pensioners, our parents – who throughout their lives have worked hard, honestly and with great effect – should receive what they deserve, and not see their pensions decrease. In fact for many years now we have been able to continuously increase pensions, albeit modestly.

Will there be a pension supplement in the autumn?

I believe there will be, because there is a rule according to which we must deal fairly with pensioners. In November we’ll see the figures for the whole year, and based on the economic performance for the whole year we’ll calculate a fair pension level, and, if necessary – and in truth it usually is necessary – then we will implement a correction and introduce a retrospective increase in pensions. These are not large sums of money, but they are important, and for pensioners every penny counts. In addition, it is also important for pensioners to feel that the administration is dealing fairly with them. As for the young, we need to help them start out in life, and this requires two things: a family support system, which we have already touched on; and assistance for them in their studies. There are two kinds of student loan system in operation in Hungary; I am personally proud of this, because we launched this form of loan at the end of the 1990s during our first term in government – it’s our baby, so to speak. For young people who cannot rely on their families providing them with this assistance, Student Loan 1 is designed to enable them to receive the money they require to live on during their studies. Student Loan 2 is for paying…

Tuition fees, basically.

We could call them tuitions fee, but we don’t have tuition fees; the majority of education is free, but there are some who continue their studies, and this must be paid for. So it pays for these costs. What the Hungarian economy can now enable us to do for young people is to make the second type of student loan interest-free, while for the first type of student loan we are providing a tangible increase in the maximum amount that can be withdrawn every month.

Staying with the subject of budgetary matters, we can see that the largest current development programme in Hungary is the Modern Cities Programme, which is almost exclusively funded from the domestic budget. What, for instance, do you expect from the new minister? Because as far as I know you are placing the Modern Cities Programme in the hands of Lajos Kósa.

Could I approach this issue from a personal perspective?

Of course.

I’m a country boy, and I believe that the village way of life and the people who live in rural areas are huge resources for Hungary. The question is how can the energies of the countryside be harnessed: how can we help people living in these areas? In my opinion, the way that the modern world and the modern economy are developing, small settlements benefit from having major, developed cities in the immediate vicinity. So to be honest, much as I like supporting people who live in cities – and they are the direct beneficiaries of the Modern Cities Programme – it is through them that I can also help people who live in villages, and draw from the deep well of Hungarian energy which I am so familiar with in Hungary’s rural areas. So the Modern Cities Programme develops cities and is good for the people living there, but it also provides security, job opportunities and a stable background for over three thousand of Hungary’s small towns and villages. Hungary is a rural country in the sense that most of our settlements are not towns, but villages. And we mustn’t forget about the people who live there. And we need a minister, because we are facing a huge coordination task: we are developing cities and want to create opportunities in every dimension – including the economic, cultural, healthcare and sporting life of cities. For this, the traditional distribution of tasks would usually require three or four – sometimes five – ministers. Within a single city, developments must be completed within a specific deadline and in a coordinated and concentrated manner, however. This is why we need a minister to coordinate completion of these tasks, which would otherwise be fragmented. This is how things stand. As to whether these are Hungarian funds or European funds, I am not aware of any such distinction.

That’s exactly what I was about to ask.

This is what I hear time and again time from all of you, and here it is again in your question. Even the general public think that there is EU money and then there is Hungarian money – but this is a misconception. It is all our money. We don’t receive a single cent from the EU as a gift. We give something in return for every single cent. First of all, not only do we receive money from the EU budget, but we also contribute money. Secondly, we have opened our borders and our trade, and given Western companies – which were more developed than we were – opportunities that they would not otherwise have received. So not a single penny in the Hungarian economy is a gift: all the money is Hungarians’ money, regardless of what the officially recorded source is – either Budapest or Brussels.

The reason I wanted to get onto this subject, which you have now spoken about, is that there is a possibility that as a result of our dispute with the European Court of Justice and the Brussels decision-makers, we will have to forego some of our EU funding in the form of fines and the withdrawal of funds. So if this policy continues, do you think this is something we must prepare for?

I am not preparing for anything of the kind. That is totally out of the question. Threats of that kind have no legal basis in the European Union’s legal system. And there is certainly no mention of it in the founding treaty of the EU. All statements that even hint at a desire to connect these issues – such as our not wanting to become an immigrant country, and their aim to force us to be one, and impose fines on us if we don’t comply – all links of that kind are unlawful. That runs counter to the rule of law, and the European Union doesn’t recognise anything of that kind. Those European leaders who do so in their statements are continually violating the law.

Let’s provide a definition of the “Soros Plan”, a term which we often hear from you, from the Government and from others. A specialist on this has helped us attempt to define it here on 180 Minutes, but you are a more credible source. What I’m talking about is the existence of a plan for a permanent resettlement quota with no upper limit on numbers, which Brussels decision-makers are increasingly promoting, and which is somehow refusing to disappear.

Let’s look at the story as it stands. I’ve used the term myself, and there will also be a National Consultation on the subject, but when people talk about the Soros Plan, one looks around and asks: Where is it, where is this document? This document exists. The Soros Plan is written down, meaning we don’t need to make assumptions or deductions: it was made public by the author himself, George Soros, who gave the plan his name. European political life moves on, and sometimes it is difficult to even remember the events of two years ago, but perhaps some will recall that at the height of the mass inflow of refugees – the invasion, the migrant crisis – I put forward a six-point plan on how to handle this whole thing. At the time it fell on deaf ears, so today few people remember this. Today I’m doing better, but at the time I was a target for everything you can think of, but not recognition or thanks. A few days after I put forward my plan, George Soros put forward his own plan, in his own name. It was under this name, he wrote the article, and it is also available in Hungarian. He put forward his plan point-by-point, as an action plan. He wrote down what should be done, in opposition to the proposal of the Hungarian government and Hungary’s parliament. At the time it seemed like just a newspaper article or a document on paper, but if we look at what has been happening in Europe since then, then what I see is that the Brussels bureaucrats are working on implementing this plan, point-by-point.

Why is there a need for another Consultation, since we already had a Consultation on this topic in the spring? That resulted in a clear response on several issues relating to disputes with Brussels that affect our independence. There was a referendum almost exactly a year ago today. On what topics have the previous consultations and referendums not given your government a mandate?

Well, parliamentary elections – and the Hungarian legal system is a constitutional parliamentary system – provide a government with a mandate to do everything within the framework provided by the Constitution. The Constitution states what the Government can and cannot do. And we and I received a full mandate for this in the last election. The question isn’t what I have a mandate for; the question is whether I have enough strength. My reply to this is “No, I don’t”. So if this whole fight against immigration looks like a fight only fought on my and our own account, and only important to the Hungarian prime minister or the Hungarian government, or perhaps the Hungarian parliament, in which only they represent the Hungarian standpoint being put forward in Europe, then we – and I – will be unable to win these battles. What we need is for people to repeatedly confirm on specific issues the general mandate which they’ve already given us and myself in the elections. This is so that on the international stage I can fight, and argue that a section of the Hungarian community, the Hungarian national community – an unmistakable, conspicuous and overwhelming majority of people who are prepared to make themselves heard – share the same standpoint as the Hungarian prime minister. In a democratic system – and the European Union’s system was designed to be a democratic system – this has huge significance. And so I ask everyone to participate in the National Consultation; because by doing so they can help us achieve the goals that we are pursuing in the interest of the safety of Hungarian citizens and families, to enable us to protect ourselves from immigration.

In a practical sense, what do you expect to happen over the coming weeks and months? Because as you said, the way things now stand, this issue of becoming an immigrant country is clearly dividing the European Union. In a few days’ time Chancellor Merkel could gain strength, Juncker is doggedly pro-immigration, and then there are the NGOs facilitating this movement across the Mediterranean. What happens if these decision-makers say “Yes, the Member States of the European Union must be immigrant countries”, and threaten to impose various penalties, while you – citing the Constitution for instance – say that you disagree with this. At what point will your two standpoints collide with each other?

The European Union has developed its own internal system for resolving such disputes. Let me give you an example. One year ago The European Commission had already prepared a proposal for establishing a permanent system for distributing migrants throughout Europe. Interestingly, the Hungarian opposition sometimes denies that such a proposal exists, despite the fact that it has been put on the table in written form. Member States have already discussed the plan in internal specialist circles. This plan has been in existence for over a year, but it has never appeared on the agenda of the European Council of prime ministers, because through national consultations, referenda, personal battles and statements, we have made it clear that there will never be a unanimous decision on the issue in the council of prime ministers, in which unanimity is required for every such decision. In the end, even if nobody else does, I will definitely veto it; this has happened in the past.

The other question is that some people are also looking for ways of avoiding a vote on this.

Yes, this is another issue. Those who want to turn us – the countries of Central Europe – into immigrant countries are thinking how they could bypass the forums which give a voice to those of us who do not want to become immigrant countries.

The vote of the V4 is decisive.

That’s right. This is a battle. And I’m only saying so in reply to your question. There are forums within the European Union, there are important issues, and there is a perpetual ongoing struggle. And in this struggle, a national consultation, a referendum or any statement of opinion by our citizens serves to improve our position and the position of the Hungarian nation.

The next time you have an official meeting with the President of the Commission will be in Tallinn, when Angela Merkel is expected to attend as the re-elected German Chancellor. What is your assumption? Will you be saying a prayer for a Merkel victory in the Bundestag elections this Sunday?

I have already encouraged any Hungarians who are interested in international politics to…

And have you kept to your standpoint?

…to say a quiet prayer every evening for the extension of the current Chancellor’s mandate; because of all the possibilities offered to the German electorate, the one serving our interests is extension of the current Chancellor’s mandate. I may have a slight party bias, because Angela Merkel’s Christian Democratic Union of Germany is part of the European People’s Party, of which Fidesz and the Christian Democratic People’s Party are also members. So obviously we support each other. But if I look beyond party considerations, I must also state that if anyone has heard how the Social Democrats’ candidate has spoken about Hungary during the campaign – how disrespectfully and insultingly he has spoken about the Hungarians – then there can be no doubt that our vote should be cast for a Chancellor who is friendlier towards the Hungarians.

Will you be taking your invoice pad to Tallinn, so that you can present Jean-Claude Juncker with an invoice to pay the European Union’s share of the costs incurred in protecting Hungary’s stretch of the Schengen border? That would be around 400 million euros.

The Hungarian government is known for friendly firmness, so we always carry that particular chequebook which the president of the European Commission, Jean-Claude Juncker, can sign in order to transfer to Hungary the 140 billion forints we expect from him. This is a specific demand on our part. Protecting the borders – the Hungarian and European border – and protecting the safety of Hungarian and European citizens, has cost Hungary around 270 billion forints [EUR 870 million]. This includes building the fence, the physical border barrier system, and the cost of deploying more than three thousand border hunters. We are asking the Commission to pay half of this bill, as we are also protecting Europe’s security and its borders. Of course they are not keen on paying, so we can expect some long battles, but in the end we will settle our account with each other.

There could be another issue – or the question is whether it could be raised – on the agenda in Tallinn. This is Ukraine’s new Education Act, which is awaiting the President’s signature. You voiced opposition to it in your speech in Parliament before the start of daily business, and Hungary’s foreign minister has also taken determined action on it at the UN and other international organisations. Five countries which are directly affected by Ukraine’s new Education Act are protesting against the new legislation. Will this be enough for the issue to be placed on the agenda in Tallinn?

I’m sure it will be a subject for discussion. In European culture it is not the custom to strip minorities of rights which they have already been awarded. The custom is to maintain – or expand – the rights of minorities. The situation in Ukraine is that up to now the state of affairs has been acceptable to the Hungarian, Romanians, Bulgarian, Greeks and Poles: up until now Ukraine has employed a legislative approach which meets European standards. It has enabled many Hungarian children to attend Hungarian schools. They have been doing nothing wrong, they have just been studying in the Hungarian language. And then suddenly the Ukrainians announce that they are backing out of this and will be limiting the opportunities for children to study in Hungarian, and for children to study in Romanian, Bulgarian, Greek and Polish. This is a retrograde step, and is something that would be impossible in the European Union. What Ukraine needs to understand is that if it would like to get closer to the European Union then their current approach, in which they are taking back rights that they have previously afforded national minorities – and which is natural for those minorities to have – is not making it possible for them to come nearer to joining the European Union. And this is something we will not allow either, because someone is either European or they are not. And if it doesn’t want to be European in terms of protecting minorities, then it shouldn’t want to be European in terms of the economy either. We must state this clearly and unambiguously. The whole issue is not a political one. On the receiving end of this issue are children, and their parents who take them to school every morning, who would like them to receive education of a quality and in a language that they as parents expect. It is not clear what Hungarian, Romanian, Bulgarian, Greek and Polish children and their parents have done to Ukraine that justifies Ukraine backing out of its commitments and taking away their rights.

You have been listening to Prime Minister Viktor Orbán on 180 Minutes. Prime Minster, thank you for again accepting our invitation, as usual.

Thank you for inviting me.