Chinese products to arrive faster to Europe following Budapest-Belgrade railway line upgrade

December 17, 2014 1:49 PM

Hungary, Serbia and China will sign the agreement on the modernisation of the Budapest-Belgrade railroad on Wednesday, thanks to which the transit route will be constructed, which allows the fastest transportation of Chinese goods form Greek harbours to Europe, Prime Minister Viktor Orbán announced at the Central Eastern Europe-China summit in Belgrade.

The railroad will be constructed with the financial and technical support of China.

Talking about the details of the project the Prime Minister said: “This railroad will form one section of the transit route starting from Greece, which will lead through Macedonia, Serbia and Hungary to Western Europe”.

He also announced that the Bank of China will establish its regional centre in Budapest.

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Photo: MTI/AP/Marko Drobnjakovic

Concerning the changes going on in the world he said that as a result of the on-going global political, economic and security-related developments, Europe was not as successful in terms of competitiveness, as the other continents. However, he also added that in spite of this fact everyone agrees that the Central Eastern European region will be the growth engine of Europe.

“The fact that our economic growth was higher than the EU average bears significant responsibilities,” the Prime Minister said, adding that supporting further economic growth is a common European interest.

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Photo: MTI/AP/Marko Drobnjakovic

According to Viktor Orbán, Europe must be able to establish strategic cooperational partnerships with the fastest developing regions of the world. This is why it is Europe’s vital interest to establish a close cooperation with China and for the region to play an active role in the Chinese-European cooperation, he said.

(Prime Minister's Office)

The Hungarian legal system punishes hate speech

December 18, 2014 11:43 AM

People who incite hatred can expect the Hungarian legal system to not leave their actions unpunished, Minister in Charge of the Prime Minister’s Office János Lázár declared following a session of the Jewish Community Roundtable on Wednesday.

According to the Minister, Hungarian laws are suitable for preventing and punishing crimes of an anti-Semitic nature. The police and the prosecution services still have work to do with relation to applying the law however, he noted.

Other administration representatives at the meeting, which Minister Lázár described as a constructive and good-natured discussion, included Minister of Justice László Trócsányi and top officials from the Chief Prosecutor’s Office, the Curia (Supreme Court), the National Judicial Office, the Ministry of Interior and the National Police Headquarters. According to information provided by the head of the Prime Minister’s Office, the justice system officials present received both negative criticism and positive initiatives.

On the subject of crimes of an anti-Semitic nature, the Minister said that the number of such crimes is stagnating, but the important thing isn’t the numbers, but the fact that these crimes are capable of endangering the tranquillity of a community.

The subject of the ‘House of Fates’ was not touched upon and the intention of the Government remains to achieve a consensus, because the museum cannot be established without the Hungarian Jewish community, the Minister said.

Deputy State Secretary for Priority Social Affairs Csaba Latorcai from the Prime Minister’s Office told the press that the participants had asked the Minister of Justice to expand the interest protection system.

Also discussed was the fact that Hungary will act as President of the International Holocaust Remembrance Alliance (IHRA) from March 2015 until March 2016, which the administration would like to perform with the involvement of the meeting’s participants.

The Deputy State Secretary explained that the Government plans to handle the issue of cemeteries as a key duty and views the task not only from a heritage protection perspective but, for instance, would also like to involve school community service to enable children to gain first-hand knowledge of local history in a targeted manner. The funding for the programme is expected to be several million euros, he added.

Mr. Latorcai also reported on the fact that the Government had come to a decision on increasing the pension-like benefits of politically persecuted persons, with a 9.9 percent retroactive increase from 1 November this year and a 2.4 percent increase beginning on 1 January 2015. According to the Government’s decision, such benefits must be higher than the average pension.

András Heisler, President of the Federation of Jewish Communities in Hungary (Mazsihisz), told the press that they had received a promise with regard to the investigation of various stalled anti-Semitism proceedings. With relation to the ‘House of Fates’, Mr. Heisler said he trusts that the parties will soon come to an agreement and it is evident that both the Government and the Jewish community would like to achieve a consensus on the issue.

With regard to the Federation’s budget, Mr. Heisler said that they had received confirmation of the fact that there will be funding available for the renovation of synagogues, with the renovation of three synagogues expected next year.

(Prime Minister's Office)

Hungary's sovereignty must be protected, Prime Minister says

December 5, 2014 2:54 PM

National sovereignty consists of energy, financial and trade independence, Prime Minister Orbán pointed out in Kossuth Radio’s morning interview, adding he regards Senator McCain’s recent claims as “extremist”. Viktor Orbán also noted Hungary’s national sovereignty is far more important than dealing with such statements.

On the subject of the US entry ban imposed on six Hungarian persons, Viktor Orbán said that the situation is “getting simpler” as the Americans the other day made a clear statement and said that the head of the tax authority had committed a crime of corruption: according to the Prime Minister, she is expected to take legal action in this respect.

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Photo: Szilárd Koszticsák

“Hungarian law offers an opportunity for each citizen to defend themselves, and I expect each senior state official to do so in such a situation,” he said, adding that if corruption charges are proven, the offender “will go behind bars”.

To another question concerning allegations that Hungary could also restrict entry in reaction to the US ban, he said that “we will act as a country proud of its national independence should act”.

On the subject of energy, Viktor Orbán said that “the file on the South Stream gas pipeline is now closed” but Hungary's interest has remained to have a pipeline that arrives in Hungary bypassing Ukraine.

He also stated that the failure of the Nabucco project and then the dropping of the South Stream project necessitate a third option, adding that Hungary has a strategic agreement with Azerbaijan, which may offer opportunities for Hungary.

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Photo: Szilárd Koszticsák

Concerning the government's recent decision to purchase Budapest Bank, the Prime Minister said the aim was not to establish a big state-owned lender but to ensure that at least 50 percent of the banking sector will be Hungarian hands so that financing does not cease in a time of crisis.

Speaking about a proposal to restrict the opening hours of shops on Sundays, he said the proposal was not about closing stores, but about preventing employers from making people work on Sundays. He also said the proposal follows Austrian and German examples.

Commenting on the 2015 budget bill submitted to Parliament, the Prime Minister said it demonstrates that national independence is also useful in an economic sense, adding that the government's policies had directly served the day-to-day economic interests of Hungarian households, citing reduced energy prices, low inflation, the start of economic growth and job creation.

Regarding the by-elections in Veszprém, western Hungary, which may decide over Fidesz’s two-thirds majority, the Prime Minister underlined that majority is not crucial. It is important, however, that Veszprém and its surroundings should have a representative in parliament who is “able to assist them on important matters”, he added.

By-elections in Veszprém will be held on 22 February 2015, the candidate is to replace former Deputy Prime Minister Tibor Navracsics, who has been appointed EU commissioner.

(Prime Minister's Office, MTI)

Jewish public life in Hungary has gained impetus, Israel’s Chief Rabbi says

According to Israel’s Chief Rabbi, Jewish public life is increasingly active in Hungary, the Press Office of the Hungarian Prime Minister’s Office stated following Deputy Prime Minister Zsolt Semjén’s official visit to Israel.

Successful talks that are useful from the perspective of both nations were held in Israel by Zsolt Semjén, who met Jerusalem’s Christian Patriarch, after which he was received by the country’s Ashkenazi Chief Rabbi, David Lau. According to the Chief Rabbi, Jewish public life has gained impetus and the faithful have become more active in two European countries: Germany and Hungary.

The Chief Rabbi welcomed the Deputy Prime Minister’s invitation to visit Hungary because, as he explained, he would like to reinforce the relationship between the religious Jewry in Israel and their fellow followers of the Jewish religion in Hungary, and accordingly during the course of his planned visit to Hungary in addition to Budapest, he would also like to visit Jewish communities living outside the capital.

(Prime Minister's Office, MTI)

V4-Switzerland Summit in Bratislava

Hungary wishes not simply to observe, but to shape what is happening on Europe’s eastern borders, Prime Minister Viktor Orbán declared at the Summit of the Visegrád Four (V4) and the President of the Swiss Confederation on Tuesday in Bratislava (Slovakia).

It was a strategic error not to have constructed the pipelines of the north-south energy corridor over the past 25 years, because the corridor is also important from the perspective of security, the Prime Minister declared.

Mr. Orbán explained that Hungary is working to make sure that projects that enable the construction of the energy corridor are also included in the current economic stimulus package, the so-called Juncker package.

The Prime Minister called the conflict in Ukraine, which was the other main topic of the meeting, “Europe’s great challenge”, because it foreshadows the question of whether the Europeans are capable of establishing peace on Europe’s eastern borders.

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Photo: Szilárd Koszticsák/MTI

Hungary is doing everything possible in the interests of achieving peace, he added.

At the press conference following the summit, President of the Swiss Confederation Didier Burkhalter stressed the importance of concurrently achieving both security and growth, and highlighted the importance of European security, which “must be a joint project of the Europeans”.

The Swiss politician also pointed out that the heads of government attending the OSCE (Organisation for Security and Cooperation in Europe) meeting in Basel, Switzerland, had voted in favour of implementing the Minsk Protocol and had agreed to set up a separate working group to ensure the implementation of the agreement.

At the Bratislava meeting of the V4, the Prime Ministers of the Visegrád Group pointed out the importance of Swiss investments in Europe, and with reference to the order of magnitude of those investments voiced their request that the V4 should benefit more from them in accordance with the Group’s significant role.

The Summit’s participants also adopted a joint statement in which, among others, they declared their support for the security of the region.

(Prime Minister's Office, MTI)

Parliament adopted 2015 Budget in Hungary

December 16, 2014 3:23 PM

MPs have adopted the 2015 Budget that aims to strengthen families, create jobs and stimulate economic growth, Minister for National Economy Mihály Varga said.

The Parliament approved the full-year headline amount of revenues and expenditures at HUF 16 312bn 873 million and HUF 17 190bn 277 million, respectively, within the central sub system of the state budget in 2015. The fiscal deficit is expected to total HUF 877bn 404 million.

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Photo: Gergely BOTÁR

The Minister emphasised that the budget remedies the problem of foreign currency borrowers and it will preserve achievements realized thus far. He stressed that the assistance of families will be again in the focus of the budget next year. Thanks to the family tax allowance scheme, HUF 240bn will be left at families, while as of 2016 the tax break for parents with two children will be gradually doubled – over four years – from HUF 10 thousand per child to HUF 20 thousand.

The Government promotes marriages also through tax incentives, as couples tying the knot for the first time will be entitled to a tax break of HUF 5000 per month or HUF 60 thousand per year. The childcare benefit extra will be kept in place, as the measure has proven that it can stimulate the propensity to have children and the employment of mothers with small children, he added.

As of July 2015, new state housing programmes will be launched with two new key elements: people with one child will also be eligible to receiving support not only for purchasing or building a new home, but for the purchasing of a used home or the extension of an existing one. In addition to this, through banking compensation some 1000bn will be refunded to Hungarian families and monthly instalments are expected to be lower by as much as 25-30 percent.

The Minister pointed out that next year the Government provides the option of public work for more people, as it spends some HUF 270bn on this programme, up by HUF 35bn compared to this year. Employment stimulating measures will also continue, among them the Job Protection Action Plan. A higher tax break will be provided for the employment of parents with small children in a part-time job.

Mihály Varga said that wage hikes will resume: some HUF 44bn is earmarked in the budget for increasing the wages of armed forces and law enforcement in 2015, while some HUF 39 is allocated for the higher wages of teachers. The career model for armed forces and law enforcement will be launched next year with a 30 percent wage hike in 2015, and subsequent annual increases of 5 percent that will total 50 percent by 2019.

The healthcare sector will also receive more funding and bolstering the GP system will be a key priority, the Minister continued. The “Women 40” scheme will also continue: this enables women with 40 years in employment to retire.

Minister of State for the Budget Péter Benő Banai stated that the National Assembly has adopted a stable budget that can enable wage hikes and the assistance of families, while fiscal deficit and state debt may fall further in 2015.

He added that MPs have tabled several amendments to the draft budget bill. Among these he singled out the proposal to earmark HUF 3bn as extra funding for bolstering Hungarian enterprises which mainly produce for the domestic market and the recommendation to uphold in 2015 the 100 percent wage supplement for teachers of civil foundations.

He also said that in comparison to the original draft, in the final version the amount of social benefit-related spending was raised by HUF 13bn. Next year the benefit-allocation system will be transformed: the tasks of the state and local governments will change, but the state will continue to provide for everybody, Péter Benő Banai stressed.

(Ministry for National Economy)

Growth requires stepping beyond traditional dogmas, Prime Minister says

December 15, 2014 12:55 PM

Hungary has proven that in order to stimulate economic growth, several traditional economic dogmas should be transcended, Prime Minister Viktor Orbán told the Serbian Tanjug news agency ahead of a China-Central Europe summit in Belgrade.

It is a common viewpoint in Europe that within several years Central Europe will become the engine of economic growth within the European Union, the Prime Minister underlined.

In recent years, Hungary has become a leading country in Central and Eastern Europe, and besides its adherence to strict budgetary discipline it is now among the states that produce the fastest economic growth, he highlighted. Hungary is expected to have achieved growth of 3 percent this year.

Not only has Hungary emerged from the economic crisis, but it has changed its attitude towards the crisis by considering it an opportunity rather than a problem, the Prime Minister said, adding that Hungary's political stability proves that it has not only survived the crisis but has actually gained strength during the difficult period.

The Prime Minister’s written statement noted that employment has reached a 22-year record, adding that the Government’s objective is to ensure that the number of people with jobs increases to 5 million.

It was also underlined by the Prime Minister that public debt has been on a decreasing trajectory and the budget deficit is being kept under 3 percent, as a result of which the European Union has abrogated its excessive deficit procedure against Hungary.

Viktor Orbán concluded that Hungary has proven that economic growth can be boosted and new jobs can be created while at the same time curbing public debt and the budget deficit.

The Belgrade summit will take place on 16-17 December with the participation of 16 Heads of Government.

(Prime Minister's Office, MTI)

Record high foreign trade surplus in Hungary

December 3, 2014 1:04 PM

In September 2014, Hungary’s foreign trade volume continued to increase, as exports and imports were up by 9 percent and 10 percent, respectively. This growth resulted in an unprecedented foreign trade surplus of EUR 939 million, up by EUR 85 million year-on-year. These data were mainly the result of domestic economic expansion, steady output increases within the industrial sector – thanks especially to vehicle manufacturing and related divisions – as well as higher consumption.

Following temporary production suspension due to summer holidays, as companies had resumed work foreign trade has accordingly gained momentum: exports and imports totalled EUR 7.8bn and EUR 6.8bn, respectively, in September this year, and foreign trade posted a record high surplus of EUR 939 million in the observed month. In the initial nine months of the year, exports grew by 7.7 percent and imports gained 8.8 percent compared to the level one year ago. In this period, foreign trade surplus was also higher at EUR 5bn, constituting a year-on-year increase of EUR 105 million.

The volume of imports and exports of machinery and transport equipment was 7.8 percent and 8.9 percent higher, respectively, in the initial nine months of the year. Road vehicle manufacturing products continued to be the driver of growth, the exports of which soared by 40 percent compared to last September. The volume of exports regarding manufacturing industry products jumped by 7.1 percent, while an even higher increase of 9.8 percent was registered with regard to imports, compared to January-September 2013. In the observed period, the trade volume of medical and pharmaceutical products was some 5 percent higher. Imports of electricity and fuels gained 12 percent year-on-year, thanks to the filling-up of gas reserves. Exports to and imports from EU member states were up by some 10 percent and 14 percent, respectively, in the initial nine months of the year.

The Ministry is expecting that the long-term positive trend concerning foreign trade turnover will continue in the coming months. The upward industrial output growth trend in place for more than one year and steady increases in consumption will also underpin the above tendency.

(Ministry for National Economy)

LEADING NEWS Prime Minister Orbán discussed the South Straem project with his Serbian counterpart

December 3, 2014 5:23 PM

The prime ministers of Hungary and Serbia exchanged views on recent developments concerning Russia's decision to abandon plans for the South Stream gas pipeline.

Prime Minister Viktor Orbán and his Serbian counterpart Aleksandar Vucic spoke over the phone after Russian President Vladimir Putin's announcement on Monday that Russia could not start the pipeline construction due to the European Union's obstruction of the project.

The two prime ministers will talk over the phone again on this matter in the coming days and meet in person at the China-Central and Eastern Europe conference in Belgrade on December 16.

(Prime Minister's Office)

Government measures provide major assistance to foreign currency debtors

November 21, 2014 3:56 PM

“The legislation introduced to improve the situation of foreign currency debtors is helping the holders of foreign currency loans in accordance with the Government’s earlier promises”, Minister of Justice László Trócsányi said at a press conference held jointly with Minster for National Economy Mihály Varga.

Mr. Trócsányi told the press that in view of the fact that the legislator is intervening into private contracts, it had to act with extreme care and while taking into account the principle of necessity and proportionality.

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Photo: Gergely Botár

He also noted that bank customers have been left with a wide range of choices: those who receive their salaries in foreign currency, who conform to the Hungarian National Bank’s strict conditions, whose contracts are due to expire before December 2020 or who are Yen or VIP debtors may chose to retain their foreign currency loans and opt out of forint conversion. “The Government is keeping to its promises; instalment payments will be reduced by 25-30 percent”, he declared.

With relation to the bill on the conversion of foreign currency loans to Hungarian forints, the Minister said that the Government had to take into account the starting interest spread applied when the loan was taken on and basically re-calculated to enable the interest spread to return to its original level. However, minimum and maximum interest spreads were also determined, the latter being 4.5 percent for home purchase loans and 6.5 percent in the case of general purpose loans. According to the Government’s standpoint, this will also lead to an improvement in the position of foreign currency debtors, Minister Trócsányi emphasised.

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Photo: Gergely Botár

At the press conference, Minister for National Economy Mihály Varga said that the Government is continuing to follow the basic principle according to which the roughly 650 thousand people with forint-based mortgages must not find themselves in a worse situation than the foreign currency debtors whom the administration is currently assisting. The Government has agreed to use the average exchange rate during the period between the deadline of the Supreme Court (Curia) legal uniformity decision (6 June) and 7 November as the basis for settling accounts.

The Curia’s legal uniformity decision also stated that exchange rate risks must be borne by bank customers, and this has restricted the Government’s scope of action, Mr. Varga added. The Minister for National Economy explained that calculations with relation to the average exchange rate have been completed and included in the agreement signed with the Hungarian Banking Association. The daily rate for 7 November was also included among applicable exchange rates, because the Swiss Franc and Euro exchange rates have separated and the two currencies have increased and/or decreased in value in different ways, meaning that euro debtors would have been worse off with the calculation of an average rate, Mr. Varga continued.

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Photo: Gergely Botár

The Government is expecting the vast majority of the remaining 400 thousand foreign currency debtors to choose to have their mortgages converted into Hungarian forints, thus freeing themselves from exchange rate risks, he stressed.

In reply to a question regarding why people whose foreign currency loans are due to expire before 2020 can choose to keep their current loan construction, László Trócsányi said that based on the principle of necessity and proportionality, the Government felt that these, otherwise very few, debtors should be given a choice. This is also the right decision from the perspective of constitutionality, he added. The Minister also stated that the minimum interest spread had been reduced to 1 percent from the original 2 percent because interest rates had been falling continuously during the past three years.

(Prime Minister's Office)

Industry and agriculture are the key to Hungarian economic development

The Prime Minister

Viktor Orbán

The Prime Minister

November 25, 2014 5:15 PM

“In addition to industry, agriculture represents the key to the development of the Hungarian economy over the next 20 years; Hungary cannot be successful without agriculture”, the Prime Minister declared on Tuesday in Nádudvar, eastern Hungary, at the inauguration of KITE Zrt’s logistics centre.

Viktor Orbán highlighted the national strategic role of KITE, which markets agricultural machinery and equipment, irrigation systems, fertilisers, pesticides, environmental protection technology and other agricultural products, and recalled that the company integrates 75 thousand partners and places significant emphasis on research & development and professional training courses, and accordingly can count on the support of the Hungarian Government.

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Photo: Gergely Botár

In recent years,HUF 3 thousand billion (12.2bn euros) have been spent on agricultural development through government funding to help launch various development projects, the Prime Minister said, adding that “today, Hungarian agriculture and rural Hungary are also performing better”.

(Prime Minister's Office)

Europe has a chance to be successful again

November 27, 2014 5:37 PM

According to Prime Minister Viktor Orbán, with the new leadership elected for the coming five years, Europe has the chance to start a policy with which the continent may regain its competitiveness, economic growth and position in the world economy and become permanently successful again.

On Thursday the Prime Minister gave a lecture on the situation and future of Europe and its geopolitical challenges at the Hankuk University in Seoul, which has a Hungarian faculty.

Concerning the geopolitical challenges, he emphasized that “calm and sober answers” are necessary, whereas touching upon the Ukrainian crisis, he said there must be a sovereign Ukraine between Russia and Hungary.

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Photo: Barna Burger

He also stated that the European demographic problem – which, according to the European philosophy of “political correctness”, is a “taboo” – can only be healed with the help of good family policy and not with immigration.

Underlining the importance of his official visit in South Korea, the Prime Minister noted that five ministers (among others Minister of Human Capacities Zoltán Balog and Minister of Defence Csaba Hende) and over a hundred businesspeople have accompanied him to Seoul, in order to increase Hungarian – South Korean relations to an even higher level.

He characterized his government as one aiming at the creation of a Christian, national, democratic and work-based society. He also said that since 2010, the Government has refurbished the economy, and among the results he mentioned that Hungary currently has 4.1 million taxpayers; however, the goal is to increase this number to 5 million.

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Photo: Barna Burger

The Prime Minister also pointed out that Central Europe – which is strongly linked to the German economy – will be the growth engine of the European Union for the next eight to ten years.

Following the presentation, Prime Minister Orbán paid tribute to war heroes in the National Cemetery of Seoul.

During his visit, the Prime Minister will meet President Park Geun Hye and participate at the South Korean – Hungarian business forum.

(Prime Minister's Office)

Ministry of Foreign Affairs and Trade summoned US Chargé d'Affairs

December 3, 2014 2:33 PM

Levente Magyar, Minister of State for Economic Diplomacy summoned André Goodfriend, Chargé d’Affairs of the Embassy of the United States in Budapest at noon.

Mr. Magyar informed Mr. Goodfriend that the Hungarian Government welcomes the fact that the United States' diplomatic presence will again be headed by an ambassador, after the Senate confirmed the appointment of Ambassador Colleen Bell.

The Government of Hungary, however, deems it unacceptable and firmly rejects the remarks made by Senator John McCain yesterday regarding the Prime Minister of Hungary, as well as the relationship between Hungary and Russia.

The Government of Hungary once again wishes to ask key U.S. officials to seek credible information before making comments regarding Hungary, so that their remarks do not lack the facts.

(Ministry of Foreign Affairs and Trade)