Package of Economic Measures Announced by Dr. Viktor Orbán, the Prime Minister of the Republic of Hungary in the Hungarian National Assembly on 8 June, 2010.

Mr. Speaker, distinguished Members of Parliament,
Ladies and Gentlemen,
Fellow MPs,

First of all, allow me to inform you briefly on the progress made in fighting the flood. As you are probably aware, an unprecedented flood has developed and the highest ever water level was reached in Northern Hungary. The situation turned especially critical over the weekend in the Hernád Valley, six counties had to be included in the areas where a state of emergency had to be declared. Declaring danger and emergency resulted in concomitant unpleasant measures as well. I would like to thank all those who live in the areas affected by such measures for taking part in fighting the disaster.

Despite all the efforts, a lot of people were forced to leave their homes and still a lot of them live in uncertainty about what may happen to their deserted assets. First of all I would like, if you allow me, perhaps on behalf of all of us, to express our commiserations to those hit by this natural disaster and to their families. Perhaps I can even say that besides commiserations, on behalf of all of us I can express my solidarity, and I can promise to give all help, just as we have done so far, in the coming days to fight the disaster and to repair the damages, and then during the rebuilding to recreate the conditions for a life worthy of a human being.

I want everyone to know that we will not leave anyone behind. I would have been happy to have missed such an experience, but you all know that the Civic Government had been forced before, at the beginning of the second millennium and at the end of the previous century, to recover the areas flooded by the Tisza River and to rebuild the area. I am confident that we still have the knowhow, and we will be able once again to help all Hungarians and their families quickly and efficiently during the rebuilding process.

Besides expressing our commiseration and solidarity and providing help, I would like to say a few words of thanks: thanks to all who participated in this painful, but splendid work, who gave their money, energy and assets to such defence efforts. I would like to thank the local mayors who gave their best to stand their ground in managing the fight against the flood. I would like to thank the staff of the water management authorities, whose performance has been outstanding throughout.

I would like to thank the members of the police force, not only to the policemen as such, but also to the other organisations supervised by the Ministry of the Interior; when the state of emergency was declared, many staff members of such organisations followed the order without any hesitation and appeared at the most critical defence lines, and in un unprecedentedly short time raised the height of the dams, and defended the settlements. I would like to thank the soldiers of the army, who lost no time to appear, after the order from the Minister of Defence, in high numbers at the area.

I would like to inform you especially that people from the penitentiary were also ordered to participate: some of them were guarding the inmates, and some of the perpetrators of lighter crimes were also ordered to work on the dams. I want to share with you the information that to our latest knowledge, up until now, first of all nobody has escaped from among them, and second: they were in the front of the work and gave a good example to all of us. I think that besides expressing our appreciation for the necessary physical work done on site, they enhanced the hope in us that life is such that if you make a mistake, and you can correct it, you can become once again an appreciated member of the community. Therefore I would like to thank the convicted prisoners for the work and effort made on the dams.

Ladies and Gentlemen, naturally this is not the right time, but later a summary and assessment study will have to be made on how and where this emergency pointed to the weaknesses of our state organisation; where we need to proceed with special attention when restructuring; where we need to enhance the State of Hungary in order not to have to put up a good show at a time of unexpected disaster, but to handle it with the routine of the usual work.

Ladies and Gentlemen, Mr. Speaker, Fellow MPs,
In the second part of my speech today I would like to share with you some of my thoughts on the economy of Hungary. First by way of summary I would like to tell you that the time has come in the economy too, to replace the old with a new one. You know that this year in April, on the 25 of April, the Hungarian electorate overthrew the old system, and we are convinced that a new social contract evolved in the polling-booths when Hungarians showed an unprecedented agreement in overthrowing the old system and decided to build a new system of national cooperation. People deemed the old system as unsuitable to lead the country out of the current situation because in the past years they felt that it was and it is unable to give a solution to the long standing troubles of the country and to the challenges of the world of today. People very sensibly see that it is not just an individual, personal lapse when state owned companies, ministries, heads of universities, mayors and leading politicians suffer the fate of being cuffed and led away due to abuses often committed as organised crime; people see exactly that these are not just individual lapses, but there is a basic, serious systemic fault here, meaning that the system that is working here is fundamentally wrong, and only the vested interests of dishonest profiteers keep it running.

This failed, bad system made Hungary reach the point that she fell out of the group of the 30 most competitive countries. As for the tax burden on companies, out of 183 countries, we stand at the 151st place. We, distinguished House, reached the point that tax bureaucracy forces us to spend 330 hours of work a year for one person, while this number in Ireland is 76 hours. The bureaucracy burden on employment – which is the greatest problem in Hungary – is such that 203 hours of bureaucratic efforts need to be made in a year for every person, while in Ireland this is 36 hours. No wonder that people decided to give a clear and strong mandate to build a new system.

This is not an easy job because the country expects us to demolish the entire system, not just some elements, and to build a totally new one. The country expect me and expects my government to do the same, therefore we will work towards this.

You know it too because you could see here in the Session Hall of Parliament that the work started when we created the foundations of a new political system within the frameworks of the national cooperation system; the foundations of the political system of national cooperation, when a new Parliament was formed; we adopted the declaration of national cooperation, reduced the number of politicians in Parliament as well as in the local governments, adopted a document on national cohesion, and we granted dual citizenship to Hungarians living outside our borders. I hope this also played some role in the unexpected, huge success of the Alliance of Voivodina Hungarians over the weekend at the autonomous elections held in the Southern areas. Right from here, from the Hungarian Parliament we congratulate István Pásztor and his organisation.

In the second round we established the new government system of national cooperation, the new ministerial structure, restored the permanent (administrative) state secretary position, and launched the complete restructuring process in public administration, the foundations of which you can discuss here and now too, in the House.

And now we arrived at a new important step, to a third round, if you like, and this means laying the foundations of the economic system of national cooperation. I ask you to continue with this work. We arrived at the third round, this is all about the destiny of the country, therefore we cannot say that it is the fight of armatures that is happening, so let us get prepared for at least twelve rounds, Ladies and Gentlemen, in the coming weeks and months.

I hope that a new era is starting in the economy of Hungary too, with the system of national cooperation established by the voters. I hope that you will see from what I have to say that the old benchmarks will lose their validity, and new ones will enter into force. Building a new economic system will naturally change fundamentally all important areas in life because every element of a totally rotten mechanism needs to be replaced. The most important thing, Ladies and Gentlemen, is to work predictably, carefully and precisely, with attention and consistency. People expect, even during restructuring, a stable, well run system, a system that can function reliably on the long run. Therefore, distinguished fellow Members of Parliament, it is important what criteria and principles are behind the building of a new economic system, and along what criteria and principles will the new Hungarian economy be reorganised.

The Government held a cabinet meeting over the weekend and adopted an Action Plan, which I hope you allow me to call as the First Action Plan. The Government will start the implementation of the Government Programme by carrying out this First Action Plan. Just as I said during the debate on the Government Programme, it is a compass that has been discussed and adopted, and now the opportunity is open to discuss the measures, the tools and the schedule: draft bills will be submitted to the House for debate and Measures, Government measures, will be outlined for the fellow Members of Parliament.

The First Action Plan focuses on two main thoughts. The first one is the creation of a new economic system and the introduction of the principle of mutual responsibility in the Hungarian economy. First I would like to speak about some of the elements of the new economic system.

The starting point is, though I think I do not need to prove this in this House that our political community is always especially sensitive to the merits, light and glory of the past and of past moral achievements, but Hungary wishes to be successful in today’s world, and not in yesterday’s. Therefore we need to look forward. We can be successful in today’s world only if we look around and see what is happening, what vital processes take place around us.

First I suggest that we take into consideration the gloomy, even alarming economic weather that rules the world today. Alarming news is coming from all over. The crisis, which is a concomitant of a deep transformation, is not yet over, but our job is not to wail. Our job is to use the typical, special Hungarian way of thinking and ingenuity and try to use these external processes for our own purposes, meaning for the benefit of Hungary and the Hungarian economy. There are some chances to do this. The most decisive process worth noticing is that today world economy is turning to a new direction. It seems that productive capitalism has a future once again, and the times of speculative capitalism are running out. We all know that the number one reason for the economic crisis that tortures the world is that an overvaluation rules the global market due to the fact that the money available in world trade surpasses significantly, many times over the amount of the real value we can find in the world. Consequently all real values are overvalued in the books and in records, and a necessary consequence is that bubbles form in the economy, and such bubbles start crises again and again in the economy, which unfortunately no matter how much we would like it, do not stop at the Hungarian borders.

Ladies and Gentlemen, Hungary can be successful in this rapidly changing modern world only if we too, focus on productive capitalism, and turn the global processes to out advantage. I mean that we fight back more and more and with more and more determination all speculation, and strengthen our efforts towards productive capitalism. I’d like to make it clear without abusing your time by entering unnecessarily into the details that productive capitalism focuses on work, speculative capitalism focuses on speculation. Therefore it is important to see clearly whether we can distinguish between speculation and work.

Distinguished Ladies and Gentlemen, the point is that we can make such a distinction. I suggest that when building the new economic system we consider as speculation when somebody gets hold of money in a way that necessarily causes damage to others, and work should be defined as earning money by creating value and by this others and the entire community benefit.

Ladies and Gentlemen, I am convinced that only this type of productive capitalism can create one million new jobs in ten years time in Hungary. One of the global damages caused by speculative capitalism is that it causes massive destruction of businesses and jobs around the world and in Hungary too. Therefore the new Hungarian economic system must be built upon the principle that puts production, meaning work in the place of speculation. Therefore all measures and draft bills we recommend should bear this principle.

Distinguished House, Members of Parliament, Mr. Speaker,
The main element and the foundation of all economic systems is the tax system. The new economic system therefore will need a new tax system. We recommend to the distinguished House not to patch up the currently in force tax system, but rather to lay new foundations for a Hungarian tax system and create a modern form to it that will be the token of the future. Please think about it: a tax system working under normal conditions is really a community shaping network of interests. When the economic system is healthy, taxation is one of the strongest links between the individual and the community, between the individual and the nation. It is a strong and reliable link built on trust.

We lived through the opposite in Hungary, and we still live it. I think that the tax system in Hungary was not built from start on trust, but rather on distrust and speculation. Taxation was unjust on the one hand, and on the other hand everybody felt it a punishment. It really was a punishment. It was a punitive taxation because it required impracticable things. With this it practically forced people to try to evade as much as they could. This is how it happened, distinguished MPs, that honest, law abiding citizens became losers, helpless duds, and finally this is how people became convinced that it was not worth it to be honest and law abiding in Hungary, because the world stood for the shrewd and cunning. This is one of the reasons why so many people feel so negative in Hungary, and this is why so many young people leave the country.

The current tax system is unjust, Ladies and Gentlemen, because it hits those the hardest who work honestly, do business and try to do something, act and create value, and leaves those in peace who are cunning and tricky and speculate. You cannot catch up with those who speculate with serious money; actually, we are at a stage when a mere 2.5 million taxpayers support 10 million people. One cannot build a modern economy on such foundations, Ladies and Gentlemen! Since the present tax system is built on distrust, nobody trusts it. Not the taxpayers, not the state, not the investors, and not the businessmen. Nobody. The fact that millions are forced to outsmart this tax system just to survive, gave basis for a small group to make a business around tax evasion and tax fraud. This became the world of off-shore knights who managed to get even under the skin of the state, and were not ashamed to take a good number of millions from the taxpayers’ money even after their several hundred millions of off-shore income.

Ladies and Gentlemen,
The policy put to an end by the voters poisoned the economy and society through the tax system mostly. Therefore this tax system must be replaced by a new one. With the old tax system we would never have a chance to put the Hungarian economy on its feet again.

Ladies and Gentlemen,
I think it follows logically for all of us from what I said that in the system of national cooperation, taxation will have to become a community enhancing network of interests. I mean instead of punishment, taxation should mean participation; participation in the system of national cooperation. A kind of participation in which it is worthwhile to take part, which is built upon trust and mutuality, that is fair and just. We need to reach a point in Hungary despite all cynicism where tax evasion would not be worth it, neither financially, nor morally. For this we need a life-like, simple, feasible and work friendly tax system. So simple, Ladies and Gentlemen, so simple that a person with only eight grades of primary education could understand the rules that apply to him or her. This is not just a question of the economy, this is also a question of democracy, Ladies and Gentlemen!

Therefore, distinguished House, we intend to start a new era in taxation as well. We plan to introduce significant tax cuts and radical simplification in the tax system, in several steps.

Job creation will stand in the focus of the new tax system. If you compare the Hungarian tax system with that of the neighbouring countries running an economic race with us you can see very well that we have two serious competitive disadvantages. One is that the neighbouring countries running the race against us apply a single rate personal income tax system, and all incomes, no matter what form they might take, are taken out through this single rate system, and they have low corporate tax rate, too. Thanks to this, I mean the competitive edge they have in these areas, we turned from vanguards into rearguards because the advantage they had in this race turned into our disadvantage; this is how we became from the vanguards of eight years ago the rearguards of today.

Accordingly, the First Government Action Plan includes seven measures to cut taxes significantly and to simplify the tax system.

As Measure 1 we recommend to the distinguished House to cut corporate tax after profits from 19 percent to 10 percent under an annual profit of 500 million, thus we can support Hungarian small and medium sized enterprises.

Measure 2 is to introduce the single rate family personal income tax; we would switch over in two years and during this time we include 1.3 million, meaning 1 million and 300 thousand employees in the tax system, and during this time we eliminate the institution of tax credit.

Ladies and Gentlemen,
Everyone will be a winner in this tax system, and transition will take place gradually, as endurance allows. Consequently the phenomenon that taxation is built on lies will cease to prevail; we are victims of a chain of lies, and even the state does not take the levied tax seriously, neither does the entrepreneur because he or she knows that this was not the real intention of the state when it levied it, and finally the employee also tries to avoid it wherever he or she can. One cannot build the economy on such distrustful situation and morale, therefore this chain of lies, this special Hungarian tax ring dance, this ring of lies must be broken.

There are people, of course, who think that income tax, a single rate income tax, and all withdrawal of money as income from the economy is not compatible with family based taxation. This is a misconception, Ladies and Gentlemen, and we will put forth a motion that unites these two systems in harmony. If you allow me, I will come back to this later.

In Measure 3, of all the taxes burdening small and medium enterprises ten so called small taxes will simply be wiped away in a single move.

Proposal 4 is to introduce the concept of income outside the tax system, meaning non-taxable income, and to make it possible that if someone provides work for others as a private individual out of after-tax money, the one working should not have to pay any more taxes. I recommend this under the principle of protection of private property, because the state has nothing to do here any more.

Ladies and Gentlemen,
Measure 5 concerns freedom of taxation, meaning that the movement of assets between blood relations of lineal descent – between live and deceased, and between those alive – employment out of after-tax income and caring for children should be taken out of the range of state action regarding taxation. This means, Ladies and Gentlemen, that there are areas of life the state has nothing to do with. Since we are thinking in terms of families, and since we take the family as a basic unit of the economy, in case of lineal descent of blood relations, the state has nothing to do with the assets in terms of duties or taxes, and I am saying this again: under the principle of protecting private property and freedom of taxation.

Similarly, Ladies and Gentlemen, when we recommend to put the elements of the single rate tax system together with those of a family supporting tax system, I will propose to you to adopt the thought that when the actual text of the tax legislation will be formulated, being aware of the annual budget, a certain amount should be set, and up to this amount we should take it that certain work income shall not be liable to state taxation after one, two or three children  because it belongs to the family, the state has nothing to do with it.

Ladies and Gentlemen,
I recommend to the House to set a single income tax rate at 16 percent.

Distinguished Speaker,
Ladies and Gentlemen,
In order to create as many new jobs as possible, it is not only tax cuts we need, but we must also start to cut red tape that is paralysing the economy in Hungary, and the authorities should not rule, but should serve people, should not set up barriers, but demolish them. Furthermore, I feel we need to target SMEs directly to help them, it is worth it and it is possible to do so, so that they can have opportunities and access resources; therefore the Government is recommending seven more measures to demolish bureaucracy and support the SME sector.

Measure 6 – continuing with the previous line – in the area of investment: today 51 permissions need to be requested; one third of them will be eliminated by the state, meaning the Government.

I recommend as Measure 7 to abrogate the simplified temporary employment currently in force – the name itself bears witness to the sense of humour of the previous government when they called that system simple employment – I mean the present one be abrogated and we should go back to the old one; it was less bad, and let us start to develop a new system that is not only less bad, but that is good for all of us.

We recommend as Measure 8 not to have to become an entrepreneur when one wants to rent a piece of real estate property.

We recommend as Measure 9 to give people back their right to freely make fruit brandy. Ladies and Gentlemen, I’d like to inform you that this way we put an end to a 90 year old struggle. Countryside people in Hungary work hard, plant fruit trees, care for them and collect their fruits.  For 90 years they have been fighting with the government on power to get back this freedom – granted to similar citizens in the neighbouring countries. You may laugh at this, but I’d rather say that this freedom fight ended after 90 years with the total and complete victory of the insurgents.

As Measure 10, the Government recommends to heed the request of the historical churches and charity organisations, especially now in times of floods, and make donations tax free once again. This was also a serious freedom fight in the past years. The previous political powers stripped people of the freedom to run to help others, and instead of supporting them, they really punished those who wanted to help. This struggle seems to be settled too: I hope that the historical churches and the charity organisations will once again be able to make good use of this opportunity.

As Measure 11, the Government recommends to make the conditions of food production, processing and sale by small producers easier. In order to do so a separate motion will be submitted to the House.

As Measure 12 we recommend to widen the Széchenyi Card Programme, to raise it to 50 million HUFs, and to make it usable for investment projects and for the own part of application schemes.

Furthermore, I’d lie to inform the distinguished House, as Measure 13, a separate motion will be prepared for the National Assembly and for the public at large on the radical re-shuffling of the use of European Union funds to the benefit of SMEs.

Ladies and Gentlemen,
So much for the measures the Government could set out before you as the First – I stress the First – Action Plan with the aim of creating a new economic system.

And now, Ladies and Gentlemen, allow me to talk about another issue, the principle of mutual responsibility, because there have been decisions made on this too, and we recommend Measures to the distinguished House.

Ladies and Gentlemen,
Another determining factor of the system of national cooperation is mutual responsibility, which I know is a new phenomenon in Hungary, and will create new conditions in politics. Therefore another large chapter in our Action Plan recommends the introduction of the principle of mutual responsibility in the Hungarian economy. This means that everyone is entitled to the right to protection and to help when protection and help are needed, and everyone must take a share in the common efforts of the country.

It is a basic need, Ladies and Gentlemen, to help each other and to extend help to those in need as soon as possible. In the present situation of the country we must help those to whom the payment of the unrealistically high overheads has become an unbearable burden with the low wages and incomes. And even those must be helped, who, I am convinced, cannot pay their mortgage instalments because of the encouragement of the former irresponsible loan policy. We need to help them within the system of national cooperation, especially after the banks were immediately given state help when the loan crisis hit them. At the same time, distinguished House, in the current situation we can expect everyone to take his or her share in the burdens and tasks ahead of us.

May I say a few words about the financial institutions, too. When the banks were in trouble a year and a half ago, the state immediately helped them. The state used people’s money to help the banks, because state money, even if it is just a loan, is still the people’s money.  So now when the country is in trouble, the least we can expect of the banks that managed to get out of the crisis after state help as winners and in 2009 achieved a significant profit, take a fair share in overcoming the problems. Well, distinguished House, I feel that nobody can get out of mutual responsibility, not the Government, not the financial institutions, nor state leaders or political parties. Everyone must take a share in putting the economy back on its feet.

The Government has serious responsibility to protect the balance of the budget in the present situation, therefore we will implement at least four Measures.

Measure 14: An expenditure stop in state and budgetary institutions.

Measure 15: Transformation of the wage costs of the public sector.

Measure 16: Revision of budget expenditures at funds and in the ministries.

Measure 17: complete revision of contracts with outsiders and outsourced activities.

These Measures will bring in altogether some 120 billion HUFs of savings for the Budget.

Proportional share in the public burdens, especially in these times of need, is important for the protection of public interests because it is in the interest of all of us to put an end to waste and to the former injustice in which the government put all burden on the people and only on the people. This is the objective of the next eight Measures of the Action Plan.

Measure 18: Levying a tax at a rate of 98 percent on severance payments over 60 days and other extra wage benefits, such as redeeming holidays and non-disclosure money in the public sector. The Government also pledges to the MPs that by submitting this motion, it will create the constitutional foundations for it.

Measure 19: Introduction of a wage ceiling of 2 million HUFs a month in the state budget sector, including the National Bank. Distinguished Ladies and Gentlemen, this means that in institutions with a budget received from the central budget, even in those with full autonomy since they use mostly public funds, a 2 million HUFs ceiling of gross wages shall enter into force. I do not find it acceptable that while the country faces serious challenges, in these institutions some people get a monthly salary today of 4-5 million HUFs, or even sometimes 7 million.

Ladies and Gentlemen,
Measure 20: In state asset management we switch to block of wages management, and I order an at least 15 percent reduction in the block of wages. This means that at least 48.2 billion HUFs will be saved here. This includes the 100 boards of directors functioning currently in state owned companies, and we will cut their numbers to 10. This means that from the number of 319 in the former political system, we drop to 60, meaning that the number of positions in boards of directors will be reduced by 260: we will cut these positions. The change in the supervisory boards will be similar: we will stick to the minimum statutory requirement, meaning that out of the present 636 places, 450 will remain, thus discontinuing the work of 180 supervisory board members in the future.

Ladies and Gentlemen,
Measure 21: May I respectfully ask the distinguished House, the fractions and the political parties lining them up for the elections that under the principle of national cooperation, to cut the party subsidies coming from the state budget already this year by 15 percent.

Measure 22: We will send budgetary inspectors to institutions using significant amounts of public funds, even to those that enjoyed institutional autonomy in the past. The Government once again pledges to create the constitutional foundations for this.

Measure 23, Ladies and Gentlemen: Full stop on telephone, furniture and vehicle purchase and replacement in the public sector.

Measure 24: Establishment of a national assets management organisation. We propose to establish a national assets management organisation so that homes with failed loans would not be taken away from the owners, but instead would be put under the supervision of a national assets management organisation  where the rights of families in debt but unable to pay and the right to use the home could be settled via talks.

Ladies and Gentlemen, measure 25: Introduction of the bank tax. After what I had said I propose that banks, insurance companies and financial leasing companies pay a higher amount into the budget. Regarding this year’s inherited budget, this is an amount of 13 billion HUFs; I propose to increase this amount this year to 200 billion HUFs.

Ladies and Gentlemen,
Since this is not an election mass rally, where we can let out feelings and emotions flow more freely than usual, allow me to request you attention for a few serious remarks on this point. The government is strictly against all anti-bank tunes. We would like to make it clear that the Government is convinced that no modern economy can be competitive without a well functioning system of credit institutions. Therefore Hungary needs stable, well functioning banks, insurance companies and financial leasing companies, and Heaven knows what other types of institutions doing financing. And the Government is committed to keep the Hungarian banking system stable. Therefore I am saying once again: these issues are not determined by counter-fans, by contrary feelings, by feelings of retaliation, but simply by a request arising from the principle of mutual responsibility.

This means that we would like to start talks with the banks on what the basis for this tax should be – an important question – how this burden is to be shared between the banks, the insurance companies and the financial leasing companies, and we recommend to introduce it in the system for three years, and then to withdraw it in three years. We hope that in this time the Hungarian economy can pick up and grow, and will be able to achieve its goals even without such an additional tax; an agreement should be reached on the step-by-step withdrawal and scheduling in three years between the financial institution system and the Government of Hungary and the Hungarian Parliament.

I would like to inform you, in brackets only, that yesterday a decision was made in Germany on the introduction of a bank transaction tax, so the measure I am talking about is not at all alien to the current trend in Europe which determine today’s economic policy – that none of us is very happy about.

Ladies and Gentlemen,
Finally there is another set of four measures here that I would like to announce. In the system of national cooperation, social security is a national issue, meaning the protection of people, families and communities. The last four Measures of our Action Plan – altogether there are 29 Measures in the Action Plan – provide protection to these people.

First, in order to halt the spreading of foreign exchange based housing loans causing so many problems, we propose that mortgage registration be allowed only in case of HUF based housing loans. This way the number of forex loan owners in trouble and causing so many economic and political problems would not increase – we consider those with housing loans as a separate quality of debtors –  and no newer and newer families would enter the system which clearly caused more trouble and misery than opportunity and benefit, no matter how they had calculated when they took out the loan that they would be better off than if they had taken a HUF based loan.

As Measure 27, we propose to introduce a secondary food inspection so that from now on the European waste food would not flow unhindered into Hungary.

As Measure 28 I ask the Ministry headed by Minister Tamás Fellegi to order a moratorium on the increase of the utilities tariffs and start talks on the new system of pricing with the affected companies.

And as Measure 29 I ask you to support the Government decision to order a moratorium on evictions until 31 December, 2010, and start talks between debtors and creditors to settle the future of housing loan owners in trouble.

Regarding the moratorium on eviction, I would like to share with you a thought of mine: I am aware that the credit institutions and financial institutions do not support this motion with the very logical and understandable argument that if we take away the ultimate collateral behind the loan, the loan would become uncertain, and the creditor can get into trouble much easier. Well, Ladies and Gentlemen, this is true. Nonetheless I must say that the distinguished House, the Hungarian National Assembly and Hungarian politics in general spared the honest debate right here in this House and in the general public on how we are to understand the institution of mortgage in relation to housing loans in Hungary: in the Anglo-Saxon way, or the continental way?

In the Anglo-Saxon way it is not a problem to evict the debtors in trouble from the home since there are institutions in that world that open new opportunities up for them immediately. In continental Europe this is not so, and we do not have such institutions that could take care of evicted families. Therefore in the calculations of the Government the situation is that the financial institutions evict people unable to pay their loan debts, then they become unemployed, they start to subside in their existence, their families start to fall apart, their children have to be taken care of by the state, and they are a bigger burden on the whole to the public and to the state than if we interfered at the right time.

Therefore I propose to carry on with the spared debate. In this debate the Government will be of the position that the continental approach be put into practice, meaning the establishment of a mortgage system in Hungary that does not accept eviction.

Ladies and Gentlemen,
There are 29 Measures in the First Action Plan in the national cooperation system, and we start to build a new economic system in Hungary with these 29 changes that we hope you also find important.

Distinguished House,
This altogether means that now we can implement changes in two important national issues, meaning putting the Hungarian economy back on its feet and creating social security. Let the primary objective of our joint effort be to give work to Hungarians that they can live on.

We want to create one million new jobs in ten years, and all of our Measures also serve this objective.

Distinguished House,
We overthrew the old system together, and we will build a new one together, and I am planning that all of us together – not just the ones sitting here in the House, but all the citizens organisation Hungary together – will be the winners of this new era.

Everyone knows the size of the problems before us. There is no room for guessing. Everyone could see the May budget data. There are enormous challenges facing us, and the country is nearly not as well off as the picture the previous government painted of it. Unfortunately I must say that the figures of the budget are still rather ambiguous. We had suspected this for a long time.

But all this is the past, part of it, and we are not looking backward now. Naturally this does not mean that accounts should not be settled. Account must be settled but we are interested primarily in the future now, and the future requires us to take calm, but firm action and to start to implement changes immediately, clear away the rubble, clarify responsibilities and start reconstruction.

Distinguished House,
Allow me to share with you another thought: the biggest trouble in the economy of Hungary at the moment is the size of the national debt. A serious sin weights on the conscience of the past eight years.

Ladies and Gentlemen,
In eight years, the Hungarian national debt went up from 53 percent to nearly 80 percent. This is an assault not only against contemporary Hungarians, but against the future generations too. We must take this into consideration.

Ladies and Gentlemen,
If the national debt were around 53 percent today, most of the troubles coming from the global economy could be taken care of, I must say, as a routine management of world economy. The trouble is that global difficulties called Hungary to duel while she has nearly 80 percent of national debts.

Ladies and Gentlemen,
It is not good to live on loans. But the consequence of the past eight years is that Hungary does not stand on her own feet today, but lives on loans. Debts will have to be reduced in the next few years, this is certain; we must keep them under control, and reduce them if possible. We all know the laws: the more loans we take, the more we will have to pay back. The more we have to pay back, the more creditors worry if they ever get their money back. The more people worry, the less people trust our economy.

And since there is no such rule in the world that anyone should invest in Hungary, as a matter of fact, today even money produced in Hungary can be taken out by Hungarians to invest elsewhere – this is why we acceded to the European Union so that all Hungarian citizens could be entitled to do so – well, under such conditions if things do not go well, if they are not balanced and under control, investors and creditors will turn away from Hungary.

This does not mean, Ladies and Gentlemen, that we give up our ideas regarding the new economic system the Measures just presented aim to serve. We have to keep the financial situation under control and march towards the goals identified and set out by the voters at the same time.

Ladies and Gentlemen,
An important precondition of the success of the system of national cooperation is that we do not only see the truth, but we try to pronounce it, as I have just done in my presentation, meaning that we fund our economic policy on realities. We wish to build our future not on quicksand, but on rock.

We received tremendous trust at the elections and I know that we need to live up to it. You must know that this is the only important thing for me and for us now: to live up to this trust. The road will be long and curvy, and you know how tiring it is to climb upwards. But if we do it together, we can reach the great, common goals that we have set for ourselves so far. We will put the economy back on its feet, create law and order; there will be social security once again in our country; we will save health care and will restore democratic norms. This road leads to a kind of Hungary in which it will feel good to all ten million Hungarians to be Hungarian because we will have our shared values that are indispensable in our lives: work, home, family, health and order.

There, in that kind of Hungary everyone can have a better quality of life and more opportunities. I will need, Ladies and Gentlemen, everyone’s help. The new joint efforts of the new Government and of the people can bring success. I will need your faith and the faith of all Hungarians, your work, support and even encouragement.

It will take time for us to climb out of the current situation. They took us deep in the woods for eight years, and it will take a few years to finally get out for good. The way I see it is that the country has enough energy and determination so that the way out would not last as long as the lapse. We started to tread a difficult road, but we have already had some successes together, and we will have even more. Our goals are the same: we continue to be convinced that the Hungarian people are very talented and strong. They always find a way if others don’t subjugate them.

Distinguished Ladies and Gentlemen,
More opportunities, more trust, more jobs, meaning a better tomorrow, a strong and successful Hungary; we need to work towards this in the coming years.

I would like to thank the honour of the unfailing attention of my fellow Members of Parliament, and allow me to use this opportunity to thank besides my fellow MPs to all Hungarians for supporting the system of national cooperation; I thank all Hungarian citizens that even after eight years of vicissitudes, they have not given up; I thank all the ten million citizens of Hungary that after so much deception, lies and injustice, they persevere and stick to their country and care for Hungary.

Thank you for listening to me.