19 July 2017, Budapest
Good afternoon, Ladies and Gentlemen, Honourable Prime Minister Netanyahu,
Thank you for coming. After a wait of thirty years, we are once more welcoming a prime minister of Israel – and, for the first time in the history of the State of Israel, on an official visit. Clearly, the focus of interest is Prime Minister Netanyahu. I’ll describe myself as the support act, if you please.
With your permission, I’d like to briefly say that we sat down at the negotiating table with the intention of opening a new chapter in the history of our two countries and our two nations. Our talks focused on the future. Today the Honourable Prime Minister made two proposals to the prime ministers of the Visegrád Four: the setting up of a joint task force focusing on the fight against terrorism; and another joint task force for the development and promotion of cutting-edge technologies. We received a generous offer from the Honourable Prime Minister: from the countries of Central Europe we can send large numbers of development engineers and innovators to Israel, in order to understand and to learn what makes the economy of Israel so successful.
In this context, it may be relevant that the Honourable Prime Minister and I have known each other for several years: I visited him in the 2000s. He was famous for being the man the Israeli people turned to when there were problems. In this respect I feel that we have something in common. In Hungary, too, the pattern is that when things are going well, the Socialists are entrusted with the task of forming a government. And they then destroy the economy. This leads us into trouble, and then we’re invited back into the job. This is why I am standing here now. This is what happened to us, too, in 2008–2009, and this is why we were returned to government in 2010. So I’ve known the Honourable Prime Minister for years, and when I went to see him in Israel in the mid-2000s I asked him to recommend experts to prepare our political community for an election victory, and thereafter for government. That was when I gained an essential understanding of the Honourable Prime Minister’s views on economic policy, and the programme with which he is also now governing Israel so successfully. We then received experts at the Prime Minister’s recommendation with whom we could also develop programmes for Hungary, mutatis mutandis. If you compare Hungary’s current situation with that in 2010, you can see that the advice we were given was not bad.
Ladies and Gentlemen,
I’d like to briefly tell you that in recent years Hungary has undergone an extraordinary process of renewal. The goal has been to strengthen our economy, to develop an investment-friendly environment, to create a workfare economy, and to change the course of Hungarian foreign policy. On 1 January this year we introduced a flat rate of corporation tax and a flat rate of personal income tax. We have created Europe’s most flexible labour code, reorganised higher education, and are in the process of attempting to change over to a German-style dual vocational training system. We believe that a new era in the world economy has begun, and in this new era the most important precondition for success is the soonest possible assimilation of technological innovations in the economy. This, in my view, is the most important point of contact between the Israeli and Hungarian economies – because Israel excels in this department, while we still have a very, very long way to go before we can say the same of ourselves.
Ladies and Gentlemen,
In this new era, competition now exists not only between companies, but also between countries. The latter competition is to attract investment from businesses developing new technologies – the investment that those companies need to make to realise such development. We understand that in this competition this is what is at stake. The economic figures of Israel, however, clearly indicate that the country not only understands this, but also takes action on it. We have entered this competition. The nine per cent flat tax rate on corporate profits is a major factor. The fifteen per cent flat rate for personal income tax is a major factor. A system of state subsidies for technological innovations is a major factor. Tax allowances tied to technological growth and developments are also a major factor. Perhaps we do not yet stand any chance of competing with Israel, but within the European Union, with these measures Hungary and Central Europe stand a good chance of being successful in the world economy’s modern era.
Ladies and Gentlemen,
The greatest change that one should recognise is this: when I met the Honourable Prime Minister in Jerusalem, the first question he asked about the Hungarian economy was how many people were in work. Before 2010, out of ten million – that’s the size of the country, ten million – three million seven hundred thousand people were in employment. The second question was how many people were paying taxes. My answer was one million eight hundred thousand. In response, the Honourable Prime Minister asked: “How come you’re still alive?” And that was indeed a mystery: with these numbers, how did we survive until 2010? In Hungary today, four million three hundred thousand, four million four hundred thousand people out of eight million are in work; and all four million four hundred thousand of those people pay taxes. This is why we’re on our feet today, and this is why here today we can talk about our shared economic future. How did we, the governing parties, survive? That’s another mystery, but that’s not the topic of my speech today.
Ladies and Gentlemen,
The Hungarian parliament has already passed the budget for 2018. I’m telling you this because it indicates to our guests that Hungary is a stable country. Most European countries are only now beginning to debate next year’s budget. We passed the 2018 budget in mid-June 2017. Everyone knows the rules, the plans and the regulations. I’m telling our guests that stability is something Hungarian – a Hungarian characteristic. We’re the only country in the European Union which has had no early elections since 1990, since the fall of communism. Whether we liked our parliaments or not, every parliament here completed its four-year term. I’m convinced that this is important not only for politics, but it is also a clear message for the economy. This is a stable country in which everyone seeks to create a predictable environment.
Now, to stimulate our Israeli guests’ appetites by telling them what kinds of projects are being implemented in Hungary today, I am duty-bound to mention a few larger projects – and to blow our own trumpet. Apollo Tyres has just opened its new plant: in Zalaegerszeg we laid the foundation stone for a test track for autonomous cars which will have no rivals anywhere in the world: it will be the first of its kind. We have inaugurated an enormous industrial laser research facility in Szeged, which is one of Europe’s largest projects of its kind, and the production of new electric motors and models has begun at Audi’s factory. Samsung has just opened a new electric battery manufacturing plant, which is so big that it’s hard to grasp its actual size – it’s enormous. These are projects which all focus on the future, and which show that Hungary has successfully diversified its activities in the vehicle industry. Hungary is no longer a country with an economy simply based on assembly plants. After several years of work, we can finally say that Hungary is a country where the cars of the future will be conceived and made. We have achieved great results, although our figures are not yet at the same level as those which the Honourable Prime Minister will quote when describing how Israel placed itself on the map of the automotive industry. But our results are remarkable in a European context, compared with the average speed of business in Europe. We are on the world map of automotive industry research, development and testing.
Ladies and Gentlemen,
I’d like to say a few words about one more thing, and that is Israeli-Hungarian economic relations. I shall quote some convincing figures, but I’ll ask you to take them with a pinch of salt. The reason for this is that although the figures show great improvement, movement in the exchange rate against the dollar has pushed them upwards. So the improved figures are not a complete reflection of improved performance, and that is something that we should bear in mind. At any rate, I can tell you that the State of Israel is the third most important investor in Hungary. The value of investment from Israel – and I can quote the data from the end of 2014 – is 11 billion dollars. This represents 12 per cent of all foreign investment in Hungary. There are 172 Israeli businesses operating in Hungary, providing jobs for 4,570 people. Israel is an important part of the Hungarian national economy. The Government has strategic agreements with two Israeli companies. In 2015 our bilateral trade amounted to 525 million dollars – an increase of 12 per cent on 2010. I wish to inform you that the Hungarian government has decided that the Hungarian Eximbank will open a credit line of approximately six hundred million dollars for Israeli-Hungarian joint ventures and projects.
And finally, for the sake of our guests from Israel, Hungary is in Central Europe, and today Central Europe is the most exciting part of Europe: the most rapidly and dynamically developing region, and the most exciting in philosophical, ideological and intellectual terms. Therefore, if you’re interested in some energy, renewal, optimism and faith in the future, and if you want to get to know such a kind of European, today it’s well worth coming to Poland, the Czech Republic, Slovakia and Hungary. This is a region which does not complain, which does not talk about disadvantages, which does not focus on the problems and difficulties, and does not talk about why something can’t be done. This is the region which does things, wants to do things and is capable of doing them, the region which works hard to the best of its abilities, the region which is competitive and successful. I’m convinced that the future of the European economy lies in Central Europe. This will be the case for many long years to come. One cannot plan for the very long-term – I also learnt this from the Honourable Prime Minister yesterday – but one must have a clear vision of the world over a period of 10 to 15 years. I can tell you that over a period of 10 to 15 years, Central Europe will be the engine of the European economy, its determining force. The bulk of all the growth in the entire European Union will originate here. I believe it’s true to say that without the growth of the Central European countries, there would be no economic growth in the European Union. The entire European structure is dependent on Central Europe. And these countries, the V4 countries, are not only economically strong, but they also have strong identities. In this respect, they’re similar to your country, Israel. We know who we are, and we’re satisfied with who we are. We want to be what we are today, and we don’t want anyone trying to change us. We know our faults, and we’ll correct them of our own volition. We don’t need lecturing, we don’t need external intervention, and we don’t need pressure. These four countries, Honourable Israeli friends and guests, are also Europe’s four safest countries. And in these terror-afflicted times, at a time of mass population movement, this is of especially great value – because I’m sure that in the future security will be one of the most important economic factors. A country which is able to ensure its own security, and a political leadership which provides security for its people and country, does as much as is possible for economic development. I’m proud that today Hungary is one of these countries.
Ladies and Gentlemen,
In addition to Hungary, I also ask you to focus on Poland, the Czech Republic and Slovakia, as the combined performance of these four countries is nothing short of remarkable. Our combined performance would put us in fourth place in the G7, and we would be ranked sixth in the G20. Therefore, anyone who’s interested in Hungary would do well to broaden their horizon beyond our country, and to frame their economic investment plans in the context of the whole of Central Europe. I’m convinced that investing in Central Europe and cooperating with the countries of Central Europe will be a good deal for the future. Likewise, for us Central Europeans I believe that one of the best deals we could make would be to explore the trade and economic potential offered today by the State of Israel – potential which we have been unable to capitalise on in recent years.
Today we have concluded important agreements. I’m convinced that the Honourable Prime Minister and I have removed all political obstacles from the path of economic cooperation. From now on what you can make of Israeli-Hungarian cooperation depends on you, the members of the business community. In this I wish you every success.
Thank you for your attention.