Thank you very much. Good morning. I wish you all a Happy New Year.
As Zoltán has requested, I’ll briefly tell you what happened at yesterday’s Cabinet meeting. The Minister of Defence reported to us on the security situation related to our soldiers in Iraq. The Minister of the Interior gave a report on border defence and migration, and the Minister of Finance informed us of the prospects for the Hungarian economy in 2020. Then we focused on issues related to health care, and finally – after many long hours at the table – we discussed and formulated the national strategy on energy and climate.
With regard to the situation of our soldiers, the fact of the matter is that missile attacks have struck military bases occupied by American military personnel. Hungarian soldiers are also stationed at one of these bases. Not a single Hungarian soldier has been injured. Our soldiers are as safe as is possible for soldiers to be. We decided – in line with the Minister’s decision, which had been taken even before the government meeting – to send over a senior military leader, who has since arrived and taken command of the troops there.
The Minister informed us that all conditions are in place for the immediate evacuation of Hungarian soldiers, should that prove to be necessary. The means needed for such an airborne evacuation are already in place. The question is whether or not we should withdraw. In essence we see this as being conditional on an intergovernmental agreement. The international legal grounds – and, I think, also perhaps the domestic legal grounds – for the deployment of Hungarian soldiers in Iraq is that the Hungarian government has entered into an agreement with the Iraqi government on our soldiers being able to be based there.
And yesterday we decided that we shall continue to fulfil our treaty obligations until such time as the Iraqis terminate the agreement. If the Iraqi government terminates the agreement, we will immediately evacuate the Hungarian soldiers. On Friday – tomorrow – the Foreign Minister will attend a meeting of the European Union’s foreign ministers, at which we will attempt to form a common European position on the situation in Iraq and Iran. For that reason I don’t want to say anything more about this now.
As far as the report on migration is concerned, first of all we were briefed on the annual data from the Turkish immigration directorate. So we looked at what has been happening in Turkey. The Turkish immigration directorate’s annual summary states that 450,000 people entered Turkey illegally in 2019. That’s 450,000 in one year. This was an increase of 70 per cent on the previous year. Accordingly, or as a consequence, compared with the previous year there has also been a dramatic increase – 180 per cent – in the number of migrants heading for Greece.
The logical consequence of this has been an increase in the number of migrants on the Balkan route. Furthermore, if you know the people smuggling routes – or their locations on the map – you can see that due to bad weather the Bosnia and Herzegovina-Croatia route has become increasingly difficult to use; consequently more and more people are heading due north towards the Hungarian-Serbian border. As a result, migration pressures at the Hungarian border have increased significantly.
We have also had to deal with this issue, because last week the number of attempts to cross the border illegally exceeded one hundred per day. So every day we need to intercept more than one hundred people crossing the border illegally – we need to intercept them, detain them and then transport them back. The police need to eject them, as it were: to open the gates of the transit zone, enabling them to return to Serbia. In order to do this work we need to increase the number of soldiers and police officers serving on the Serbian-Hungarian border, and yesterday we decided to send further units to the border and deploy further police officers to the area.
We have activated the border defence agreement concluded among the V4 countries. So the Czech Republic, Poland and Slovakia will be able to provide us with immediate assistance if needed. And we decided to provide immediate assistance to Macedonia and arranged for a police contingent to be sent to that country.
The following is my account of the Finance Minister’s report on the economic situation and outlook. First of all, we came to a fantastic conclusion. Hungary has achieved a fantastic result: for the first time in thirty years – since the fall of communism, for the benefit of the younger ones among us – the number of people in employment in Hungary has exceeded 4.5 million. This has not been the case in Hungary for thirty years.
This means that since 2010 the number of people in work in Hungary has increased by more than eight hundred thousand, and our employment rate has thus exceeded 70 per cent. This is a fine achievement, especially when compared to the situation ten years ago. But I’m not completely satisfied with this, because I don’t think we can allow the Czechs to remain ahead of us – and they are ahead of us by at least a nose. So I asked the Minister of Finance to also prioritise the goal of catching up with the Czechs.
You obviously know the gross average salary figures, as they were released by the authorities a few days ago: wages have been rising continuously for 82 months, and average earnings have increased by 80 per cent since 2010. I feel it is important to add that Hungary has a national and Christian democratic government; and it follows from this that – as befits a Christian democratic government – wage growth rates were highest among those on the lowest incomes.
Everyone’s incomes have risen, but the wages of people earning the least have increased the most: the minimum wage has increased by 120 per cent and the minimum wage for skilled workers by 135 per cent. We want to continue these increases in both employment and wages, because I see no other way to eradicate poverty; and you know that our government has committed itself, indeed proudly committed itself, to being the government – the party alliance, the Fidesz-Christian Democratic People’s Party alliance – which will eradicate poverty in Hungary.
You also see that in Hungary questions surrounding poverty are the subject of fierce domestic political debate. If one were to take Hungarian domestic politics as one’s starting point, one wouldn’t even be certain about the true numbers and figures; so in this area we take the European Union’s figures on Hungary as our starting point, and they show clear and unambiguous changes. I think that you are also aware of them.
According to the EU, and I quote, we now have 1.3 million – one million three hundred thousand – fewer poor people than previously; and the number of people in severe financial need has fallen to one third of its previous level. Percentage rates of poverty cannot be considered a success, however, because for that the only acceptable number is zero. And so everything that has happened so far is still not enough.
I don’t want to talk about this in more detail now, but yesterday the Minister of the Interior also told us about a programme for which he’s responsible – which he’s directing and supervising. This programme aims to improve conditions in the country’s thirty poorest villages, which mostly have Roma majority populations. Indeed yesterday he reported that new settlements have been added to these thirty villages, and thus the scope of the programme has been widened.
Yesterday we listened to a report from the Foreign Minister. I don’t want to talk at length about this, but I’d just like to underline the importance of his statement that 101 major investments were given the green light in 2019. The total investment sum for this is 1,700 billion forints. I only mention this because it is the highest level of investment ever made in Hungary. There has never been a year in Hungary’s history in which such a level of investment has come to our country.
Incidentally, this figure includes both large foreign and large Hungarian investments. I’d like to draw your attention to an interesting fact, while admitting that my reason for doing so is that in it I see the vindication of a strategic government decision made in 2010: last year 38 per cent of new jobs in Hungary were linked to investments originating in Asia.
So in 2019 38 per cent of new jobs in Hungary were created by investments that came to this country from China, Korea and Japan. I said that I consider this to be a vindication, because clearly the publically declared policy of “Eastward opening” is coming to fruition with investments made in Hungary. Incidentally, in 2019 the largest investors in Hungary were the Koreans.
I don’t want to talk very much about competitiveness here, because you know that – thanks to its systems of taxation and investment incentives – the Hungarian economy is one of the most competitive in Europe. What I would like to say a few words about, however, is that 2020 – which will be a special year – will be a particularly exciting year, I think, in terms of the Government’s work and in an intellectual sense.
The reason for this is that the Hungarian economic model that we’ve built since 2010 differs in important, essential aspects from the economic model of the eurozone countries: in the Hungarian model the tax system, investment incentives, measures stimulating competitiveness and the approach to social policy are all different from those found in the western countries of the eurozone. Right up to the present we have seen that the Hungarian model has been successful in parallel with significant growth in the economies of the eurozone countries.
In 2020 this situation will change. According to our analysis, in 2020 growth in the eurozone economies will come to a halt; and the question is, will the Hungarian model work even when there is no economic growth in the eurozone? No one knows the answer to this question. Everyone can have their hopes, as we do, but the Minister of Finance says that we won’t be able to achieve our goal of growth in Hungary which is at least 2 per cent higher than the European Union average unless we have a separate economy protection action plan.
So an economy protection action plan must be created. This work is in progress, and I’d like to describe it in detail in my State of the Nation speech in February. Therefore 2020 will be an extremely exciting year: professionally, in terms of governance, intellectually – and, ultimately, in people’s daily lives.
We have also made some decisions on healthcare issues, which I would like to briefly outline. Last year we identified the need to face up to a number of challenges, but the biggest challenge – the one which poses the most immediate threat to the Hungarian healthcare system – is the emigration of skilled workers and nurses. This is why we have set ourselves the goal of keeping them in Hungary. Therefore, over a total of two and a half to three years, wages in this area are being increased by around 72 per cent.
The first step has already been taken, and I think we announced it yesterday: a 14 per cent increase in January and in the second half of the year a further 20 per cent increase, from 1 November. With this we hope that we will be able to retain nurses and healthcare professionals, who are subject to enormously powerful forces drawing them away, as many Western European countries – especially Germany – make no secret of their desire to attract highly-trained Central European healthcare professionals to their countries by offering them higher salaries.
This is a very serious challenge, and we will try to address it with this measure. As I see it, in politics it is natural for people to want everything all at once and immediately; but people also know that one can’t have everything at once and right away. So we must take things step-by-step, and so now we have made nurses our first priority. We also made a decision on development funds, asking the Minister to reallocate development funds in 2020 and give priority to the refurbishment of hospital waiting rooms, wards and related communal spaces.
In recent years most of the healthcare budget has been spent on hospital buildings, operating theatres, hospital equipment purchasing and wage increases. These are all important things, but now we have come to the point at which I think people are justified in expressing their dissatisfaction with the physical spaces in which they seek access to health care. Yesterday, therefore, we made the decision to provide for the refurbishment of all wards, waiting rooms and associated communal spaces in hospitals that have not undergone refurbishment in the past three years.
Until this happens, we will not be able to support other developments: this is the priority for this year. The third question we dealt with was that of hospital debt – on which, I regret to say, the State Audit Office has issued a troubling report. The State Audit Office is an important institution, because it is not a government institution: we use other institutions for governmental oversight, while the State Audit Office [SAO] is an institution answerable to Parliament. And since the SAO report is one issued by Parliament, its every letter must be taken seriously.
The SAO report states nothing less than that the accumulation of hospital debt is not a forgivable mistake, not an excusable transgression or error, but a serious matter known as an unsecured loan commitment – something which is prohibited in Hungarian state institutions. The State Audit Office – in this sense Parliament – has called on us to put an end to this. And I agree with this, because I think it is worrying for one to hear that a hospital – or the very hospital providing one with care – is in debt.
So we have instructed the Minister to put an end to this practice and to prevent any hospitals from accumulating any form of debt in 2020. If the Minister lacks the means to monitor and direct the management of hospitals, we have offered him the opportunity to make a suggestion and we will give him what he needs. So he will receive all the means needed to eliminate hospital debt, and this is what must happen.
We cannot close this financial year with any of our hospitals building up debt. In parenthesis I’ll mention what I pointed out to the Minister yesterday: it is also clear from the reports that a large portion of the debt is caused by high-value services provided by foreign-owned firms, which make large profits as a result. So I’ve asked him to show the appropriate level of courage – as there are powerful forces at play, and big fish are moving in the water – in dealing with this problem, and to please solve it. He will also have to report on his planned measures in this regard by the end of January.
As regards climate protection, yesterday the Government discussed the country’s climate strategy together with its energy strategy; this is because in Minister Palkovics’s view these two issues can only be dealt with together. We accepted this. We were introduced to the climate change action plan presented to us by the Minister, and we adopted it. If I’m not mistaken, the Minister will inform the public about this in detail tomorrow. We also adopted the new National Energy Strategy and the new National Energy and Climate Protection Plan.
The content of these involves a huge amount of numerical data, and I don’t want to talk at length about them now; but from a policy point of view I’d just say that that we concluded that in this regard there is nothing inevitable about a collapse of any kind in the Carpathian Basin. Even adopting the most conservative – for us the most unfavourable – view of climate change, we shall be able to sustain the shared life of Hungarians in the Carpathian Basin. For this we must adapt to climate change smoothly, calmly and systematically.
If we adapt to climate change smoothly, calmly and systematically, the Carpathian Basin will be capable of producing all the food we need, the Carpathian Basin will be capable of supplying all the drinking water we need, and it will be capable of creating a clean environment for the people living here. And we must begin this process of adaption over the next few years. At yesterday’s Cabinet meeting we also reviewed the issue of drinking water reserves, and we adopted some decisions which will assist in their long-term preservation.
In this adaptation process, Hungary’s starting point is not unfavourable – indeed, if one can use the word in this context, it is favourable. We know of twenty-one countries in the world which have been able to produce significant economic growth while also reducing their carbon dioxide emissions. There are twenty-one such countries out of the world’s two hundred, and Hungary is one of these twenty-one countries. In Hungary gross domestic product has been growing; meanwhile, since 1990, we have succeeded in reducing our carbon dioxide emissions by 32 per cent, and in those thirty years we have reduced our energy consumption by 15 per cent.
In all indicators suitable as benchmarks for comparing the European states in terms of their climate protection performance, we can say that Hungary is in the top third. So in the “climate championships” we are among the leaders. Hungarians are not used to the sorts of statements I will now make. We are ahead of such countries as the following: we are ahead of Germany; we are ahead of – it feels good to state these facts, so I will – the Netherlands; and we are ahead of, for example, the Austrians. In the area of climate protection policy we are doing better than all these countries.
As regards goals, Hungary has a phased plan for making 90 per cent of electricity production carbon neutral by 2030. This means that the Hungarian energy system will change to make Paks [Nuclear Power Plant] the provider of the bulk of our energy, of our electricity, with solar energy as the second largest source; so by 2030 only 10 per cent of our electricity production will generate carbon dioxide.
In Hungary there has also been much debate about whether we should join those countries aiming for a climate-neutral economy by 2050. We’ve carried out the necessary calculations, and we can state that Hungary could be converted into a country with a climate-neutral economy by 2050, but this would cost fifty thousand billion forints. This shows that climate protection is extremely important, but also extremely expensive. It is possible and it is worth it, but this is the amount of money we must raise.
Long debates face us – long debates face the whole of Europe – about how this sum should be raised. We have four criteria upon which we will represent Hungary’s position in this debate. The first is that the costs of a climate-neutral economy should primarily be borne by the climate wreckers: the large polluting countries and large companies. The burden must not be placed on the shoulders of the small ones. The second criterion is that the implementation of this policy must not result in increases in the prices which families pay for either energy or food.
The third criterion is that money must not be taken from poorer countries. This means that in the European Union’s next budget it would not be acceptable for money to be taken from the Cohesion Fund and reallocated to climate protection purposes, because this would mean that the funds needed to fight climate change would be taken from poorer countries. The fourth criterion is that we must openly state that in Europe we cannot build a climate-neutral economy without nuclear energy, and the use of nuclear energy should be supported, not restricted.
The EU has done a great deal in this regard in the past few months, with the European Parliament adopting a resolution to this effect, and the European Council issuing a document which makes this point clear. Following yesterday’s decision the Government will develop a climate and environmental protection action plan, which I will also introduce in February. This will contain specific measures: specific measures, not simply strategic directions.
We’re working on the full list of these, and the relevant background calculations are not yet available, but there are a few things I can tell you about, and so now I will mention two or three concrete examples. The climate action plan will definitely feature our resolution that in every town and city from 2022 onwards the only new buses appearing on the streets will be electric-powered. The plan will definitely rule that in the next two years all illegal waste disposal sites in Hungary must be closed and eliminated.
We are currently activating the instruments needed for this. And it is also certain that this year we must make decisions enabling us to clear our rivers of PET bottles, which flood us from time to time. We also have a plan – the details of which still involve a great deal of work – for phasing out plastic packaging materials. I hope to also be able to tell you more about this as in February. These were the most important government decisions.
If I need to say something to summarise the year ahead, if I need to draw a picture in the light of yesterday’s government decisions, I can say that 2019 was an election year in Hungary. Due to the election dates, not only was 2018 an election year, but we also had two elections in 2019: European Parliament and local elections. With the local elections, however, the election year came to an end. The period ahead – of more than two years – must focus on governing, not elections.
I could also say that the campaign period is now over, and the next political campaign or election campaign the Government will engage in will be after 1 January 2022. Until then we shall concentrate all our strength on governing: on what we might call everyday matters, the steps and the detailed work involved in country-building.
If you look back to your history lessons in school – and I believe that this has always been true, regardless of the political system in place when one went to school – in Hungarian history we see that two types of period alternate with each other: periods in which the country is built up, and periods in which it is lost.
We believe that in Hungary since 2010 there has been a period of country-building, and over the next two years we’d like to strengthen and accelerate these efforts, and increase our performance. Two years of eventful and labour-intensive governance lie ahead of us.
Ladies and Gentlemen,
Thank you for your attention. This is what I can tell you about yesterday’s Cabinet meeting. If you have any questions, either about these issues or any others, I’m here to answer them. Thank you for your attention.