Reigniting economic growth in Hungary is of paramount importance and also requires the confidence of enterprises as investing here makes economic sense because profit prospects will be favourable, Minister for National Economy Mihály Varga told representatives of large German enterprises with investments in Hungary at a business lunch at the Hungarian Embassy in Berlin.

At the event, at which among many others representatives of Daimler, Hochtief and Siemens also took part, the Minister pointed out that he had promised as early as the parliamentary hearing preceding his appointment that his first official visit as Minister would be to Berlin instead of Brussels, because Germany and the German economy are crucial for Hungary’s economic development.

In addition to holding talks with business sector representatives in the capital Germany, Mihály Varga will also meet with Finance Minister Wolfgang Schäuble, Minister of State at the Economy Ministry Stefan Kapferer and several senior officers from the Federation of German Industry (BDI) and the Association of German Chambers of Commerce and Industry (DIHK).

The Minister for National Economy said at the lunch that the “past three years were hopefully not in vain”, but “there is no absolute guarantee” for success. A lot depends on developments in Europe, and “signs of stabilization will soon disappear unless economic growth picks up”, therefore the most important task for 2013 and 2014 is to recommence economic growth, he added.

However, he said, growth cannot be revived “without help”; regulatory reform is not sufficient on its own. Stability and predictability are also necessary and enterprises must also believe that it is worth investing in Hungary, as opportunities for profitability are likely to be good, he stressed.

As head of the Ministry for National Economy, Mihály Varga added that he offers partnership to German enterprises operating in Hungary. “We endeavour to make our partners comprehend why and what we do even if we cannot come to an agreement”, he said. He asked that he be allowed to begin work in his post as a Minister "on a clean sheet", “regardless of whether former experiences were positive or negative”.

Mihály Varga said that in 2010, when the new Government took office, “the state of the Hungarian economy resembled that of Greece”. The budget deficit was above 7 percent of GDP, state debt totalled 83 percent of GDP and only 55 percent of the working age population had a job, whereas the EU average rate of employment is 65 percent.

As a result of the new economic policy, however, in the past two years the deficit has been below 3 percent, the pace of government sector debt increase had first slowed and then began to decrease; the country’s forex debt exposure, country risk and interest rates have decreased significantly, and progress, albeit “to a modest extent”, has been made regarding employment.

He added that the Government had among others modified the ratio between taxes in order to achieve greater stability, which “does not make everybody sitting at this table happy”, and he stressed that he was “open to proposals” concerning this issue.

He informed those present that the Government had incorporated supplementary elements into the taxation system on the grounds that everyone should partake in stabilisation. In turn, he emphasized that enterprises who took part in stabilising the economy could eventually also profit from lower country risks.

(MTI)