PM Orban: Economic Neutrality Is Difficult, But Hungary Takes Steps to Implement It + Video

Hungary's prime minister delivered a keynote address at the European Competitiveness and Hungarian Economic Neutrality conference.

Orbán Viktor

The political logic of the EU’s Green Deal has been called into question, particularly if the push for decarbonization results in the decline of European industries, because European companies relocate their production to other countries, Italy's former prime minister pointed out.

Half of EU companies consider energy costs to be the second most important barrier to investment, the Hungarian premier said.

Even if renewable energy development targets are met, the share of hours when fossil fuels determine energy price levels is not projected to fall significantly by 2030,

Viktor Orban said, citing the report. According to Prime Minister Draghi, support for battery production development has been crucial, and the outlook for the industry has improved in the EU, even if it is not EU actors who benefit the most. Europe is still behind Japan and South Korea.

Regarding the automotive industry, former Prime Minister Draghi pointed out: if we fail to see what industrial policy is consistent with climate policy, we will implement a climate policy that will destroy our industry, PM Orban said. 

"The report also includes proposals, some of which fall in line with what we think and are also in the interest of Hungary's national economy," Viktor Orban said, stressing that it is important to grow aware that there is a new situation and that Hungary must respond to the changed global economy.

Trade between Asian countries will grow to sixty percent of the total world trade in the foreseeable future,

PM Orban pointed out.

The Western response is the formation of blocs, dividing eastern and western world economies into separate blocs, he said. In PM Orban's view, this is a return to the Cold War-era logic, and 

both Brussels and Washington are experimenting with bringing the 20th century back to life.

China tried to fight against this for a while, but now  we can see that China is building its own financial system, PM Orban noted.

We could have two financial systems in the future, he said, adding that this may not entail only theoretical consequences. At this point, he recalled the Reuters' report on what kind of industrial disinformation campaign the US financed against the use of Chinese vaccines during the pandemic. All this may remind older people of the pre-1990 Soviet versus capitalist period, PM Orban remarked.

The Americans will soon spend 1.6 billion dollars on an information war against China, which will also be perceptible in Hungary, and it will be the task of the Sovereignty Protection Office to identify such endeavors, he said.

Trends in the EU

Speaking about the trends in the EU, PM Orban said that one of them is the transatlantic trend. Backers of this trend see Europe integrated under the US, which now has a serious competitive advantage.

Others believe that Europe needs strategic autonomy, a term introduced by the French president. They do not see transatlantic integration as Europe's future, but believe in strategic autonomy that allows Europe to shape its relations with other actors according to its own interests.

Based on our historical instincts, Hungary's sympathy lies with the latter, even though that won't work as the idea of European strategic autonomy comes from leaders who think in terms of a federalist EU,

he pointed out.

The PM considers a federalist Europe a pipe dream destined to suffer a major shipwreck, adding that strategic autonomy on a federal basis is mere wishful thinking.

There can be no common migration policy on a federal basis, that will also eventually crash into the welfare wall, as on a federal basis the EU is only capable of poor performance. The third wall that federalism will hit is that of common borrowing, because a federal Europe has to be financed, and the EU has no money to finance it,

he said, noting that for some states common borrowing would be tantamount to suicide. 

The patriotic turn seen in the Netherlands, Italy and many other countries is the dominant trend. If the EU wants to address this flood of questions, it must do so on a national basis, not a federal one,

he added.
 

This is a new world, and responses of the past no longer serve as solutions to the problems we face. The voice of reason is needed and a new economic policy has to be announced. The task for Hungary is to formulate a neutral economic policy that affords a chance of success.

Economic neutrality

According to the PM, we weren't conscious of economic neutrality, yet it has become part of our everyday life. This was the case during the epidemic, as well, when we obtained vaccines from both the East and the West. Hungary responded similarly to migration, as it did not approach the problem on ideological grounds.

The essence of economic neutrality is that even if the global economy is divided in two, there will still be areas where the two economic systems meet and overlap.

Vienna was such a place during the Cold War.

In 2010, Hungary replaced the liberal economic policy with an economic turnaround, so there is a political basis for this. At the time, they had no idea that this would be the direction of world politics, but now it is clearly just what we needed. 

According to the prime minister, economic neutrality is based primarily on

conducting business with whom ever we choose. The second principle means doing business with whom ever is the most worthwhile. The third principle involves stating that we negotiate based on our own values.

"We must not confuse ideological and economic issues, and must strive to ensure that economic relations are purely economic and that we do not have to give up any of our values,"

he explained, noting that the EU blocked part of the money we are entitled to because Hungary adopted the Child Protection Act.

The fourth point, according to Mr Orban,

is that we must orient ourselves in all directions, not just towards the West, because the world has changed. Modernity is not an exclusively Western phenomenon.

Modernity is not a category exclusive to the West

The prime minister said that modernity is not an exclusively Western category, and there are many examples of it in Asia.

For development, we have to be open in all directions.

On economic neutrality, he said that we must be present in the London, Japanese, Chinese and Arab financial markets. He stressed that investment must also be neutral, and explained that the Germans have brought 25 billion euros of capital into Hungary, while the Americans and the Chinese have each brought nine percent, so there is already some degree of investment neutrality. 

Hungary is moving towards investment neutrality and is welcoming investment from all centers of the world,

 he said, while highlighting Serbia's free trade agreement with China.

Mr Orban said that the fourth element is technological neutrality, and that Hungary's Paks 2 is an intercontinental investment, as Russian, American and French companies are collaborating. The fifth element is energy neutrality.

The EU is slated to grow by one percent this year, and cannot seem to break out of the zero to three percent GDP growth band.

For us, this is not enough," he remarked, saying, "Hungary needs to be between three and six percent. I think next year we can move into that band and aim for the upper end of the range. 

It is important to avoid slipping into debt slavery. The Hungarian economy can do this for the time being, and this is a key point of economic neutrality. Debt must therefore be reduced. We also need external capital in addition to Hungarian capital. As he said, a capital injection program has to be offered to small and medium-sized enterprises. He also believes that the child tax credit should be doubled, while preferential loans should be offered to them and also to skilled workers and not just university students.

According to the Prime Minister, economic neutrality can only be viable if we keep apace of the technological mainstream and if we have modern technologies.

The budget mirrors policy, and therefore we can expect that the 2025 budget will include elements of economic neutrality policy.

The biggest challenge for Hungary is to remain a neutral country in a world that is dividing into economic blocs. If we are unsure of the answer, we should again consult ChatGPT. "We are the guardians of our nation's future, and we will write that future," Mr Orban said, quoting from the speech produced by the AI platform, and then indicated that

we can all be sure that with determination, Hungary can make the policy of economic neutrality work.

"There is nothing left to do but press forward," the PM concluded his speech.
 

Hungarian Prime Minister Viktor Orban gave a talk at the National University of Public Service's (NKE) conference on"European Competitiveness, Hungarian Economic Neutrality" Wednesday morning, which Magyar Nemzet reported on in real time. 

Cover photo: Hungarian Prime Minister Viktor Orban (Photo: Vilaggazdasag/Zoltan Vemi)