And we have identified this as a renewal and reorganization of our economy and society, concentrating and focusing on workfare society. We have shifted the focus of budget income from taxes charging work to taxes charging consumption. We have introduced a flat tax on the income side and a high VAT on consumption. We have reduced the duration of unemployment aid from 9 months to 3 months, several hundreds of thousands of people who could not find a job have been involved in the public work programs, we have abolished the early retirement schemes and we have transformed the social benefit system.
The result is astonishing: we are among the five European Union member states who are able to decrease their state debts, our budget deficit has been under 3% for the third consecutive year, and now we are very close to being abrogated from the excessive deficit procedure we have been under since our accession in 2004.
Thesis number four:
Policies which could be solutions for the internal problems of the Euro-zone have not been completed yet.
What are these internal problems? For example the differences between the state bond interest rates within the Euro-zone are still significant. In the meantime it will soon become unavoidable to come to terms with the internal coded contradiction that surplus in the balance sheet of Germany necessarily appears as deficit for other Euro-zone member states. Meanwhile, nobody knows how the countries with a level of debt surpassing 90% of GDP could stop their growing indebtedness on their own. The question therefore must be asked: if they are not capable of this on their own, who can assist them in this effort and in what way?
A stronger economic-financial coordination could be useful for the future, but it is not an answer to the current problems.
Thesis number five:
Deepening the European Monetary Union must not result in less flexible economic policies and must not cause an ideological and doctrine-based way of thinking. The economies of the Euro-zone countries are in strong interdependence with each other, therefore it is justified to conduct a deep and strict coordination of economic policies in the Euro-zone.
In the meantime it is of course unimaginable that for example Sweden, Hungary and Bulgaria would need the same type of economic policies. Thus parallel to the ever deepening economic and financial union of the countries belonging to the Euro-zone, those, whose economies are not so directly interlinked with each other, shall retain the high level of freedom in choosing their economic policy tools. At the same time, this deepening cooperation cannot bring about the closing of doors before those not yet members, and the flexibility of the latter group cannot lead to separation from those in a deeper integration. The common policies and the single market must constitute the navel cord between us.
Let’s put it this way: I agree with Chancellor Merkel who said that we all have to do our homework. However, it is not so simple to say whether all students should do the same homework if we want all of them to pass the exam. Following this logic and standing on the ground of common sense, Hungary is a defender of the diversity of economic policies inside the European Union.
Thesis number six:
Those countries who are already able to reduce their state debts or at least have the chance to turn back before reaching the 90% of GDP, should not give up their solid and disciplined fiscal policies in order to find an easier way towards growth.
While appreciating the crisis management steps made by the ECB, we have to state as well that central banks can assist only those crisis management policies through which governments are totally committed, 200% committed, to keeping the budget deficit under 3% and continuously decreasing state debt.
Thesis number seven:
It is very simple: Hungary has become a European success story. In case of fair treatment, after eight years, we should be abrogated from the excessive deficit procedure. Economic growth will start in this year and will be accelerating continuously in 2014 and 2015. Our record high trade balance surplus will be sustained, employment will continue to rise, state debt will continuously be reduced and the budget deficit will continue to be kept under 3%.
We are getting out of the trap of energy dependency, we are decreasing our indebtedness denominated in foreign exchange to avoid being exposed.
Hungary is a country which has not set getting out of the crisis as a target. Instead we are preparing for the post-crisis world and its competition.
I invite you to wish the Hungarians success in this effort. Thank you.