Prime Minister Viktor Orbán stated at the press conference following the EU summit yesterday that each member state showed a constructive and supportive attitude towards Greece at the working dinner. The member states intended to convey the message to the Greek citizens that they should decide about the fate of their country with keeping in mind that Europe can only be their partner in saving Greece if they do not disregard the agreements made with the EU earlier.

Every remark made was about keeping Greece in the eurozone and that the cooperation of the Greek citizenry is required to achieve that, said the Hungarian Prime Minister. He added that the recent results of the election in Greece suggest that the economic crisis had shaken the democratic institutions of Europe as well. The Greek results foreshadow the danger of stepping over a Rubicon line.

The informal meeting of European heads of states and of governments was a consultation for crisis management, and no formal decisions were made; it was rather a preparation for EU summit at the end of June. The general perception was that „things were not going too bad until the Greek elections broke the door."

The prime ministers of the members states, as a result of several-month-long efforts, launched a mechanism that guarantees for the citizens of all EU member states that the management of the economy would be pursued in a reliable and disciplined way, declared Viktor Orbán. The coordination of economic policies in the framework of the European Semester, which was launched during the Hungarian EU Presidency, and the enhanced cooperation in budget planning and budget discipline are parts of this mechanism. The members states have undertaken to implement structural transformations that all show in the same direction, and all member states have made measures that will hopefully prevent the occurence of another financial crisis in the future.

It seemed that Greece could keep its track and – with the help of reducing its state debt – it would be able to meet its international obligations. However, following the parliamentary elections in Greece, EU decision makers began to fear that anarchy might unfold in this eurozone country leading to a worst scenario.

The Hungarian Prime Minister emphasized that the most important is to maintain and stabilize the democratic institutions of Europe, which became united after the fall of Communism. The Hungarian government has worked out a scenario for both cases; if the eurozone successfully consolidated its currently unstable situation and also if the Greek exit from the eurozone materialized with its grave consequences.

The Hungarian government has a ’plan B’ for how to finance Hungary in case market for state bonds faltered and how to change the central budget, and how to achieve extra growth through other means than normally available. Having said all that, all EU decision makers pray for ’plan A’ to occur, said Viktor Orbán.

The Central European member states of the European Union are going to submit a joint proposal for enhancing economic growth through EU incentives.

The proposal, in the elaboration of which Hungary was involved, includes the following elements. The countries of the Visegrad Cooperation (V4) should have access to the foreign exchange transactions of the European Central Bank (ECB), the capital transfer of branches from Central Europe to their main bank should be terminated, the application of reverse VAT should be made more flexible, and it should be confirmed that the Cohesion Fund is to be maintained for its original purpose.

Viktor Orbán declared that the Cohesion Fund is the only available instrument in the European Union that had demonstrated its capacity to engender growth and employment. Almost two and a half million workplaces have been created thanks to this instrument since 2000. This is why Hungary does not support any initiative that would transfer funds at the expense of the Cohesion Fund. The countries that were involved in the elaboration of the joint proposal will present the details of their proposal at the EU summit in June.

President Herman van Rompuy was requested to summarize in an action plan the decisions that are expected to be made at the summit in June. This document is supposed to sum up those, at least, 15 issues that were discussed in Brussels. The issues include the question of introducing eurobonds, and if yes, how many types should be introduced. It is also an issue whether is there a need for introducing new instruments of engendering economic growth (like making capital increase in the ECB) or whether the fiscal pact on budget discipline should be modified or not.

„As regards the application of double standards, the situation in the EU has improved significantly for Hungary,” said Viktor Orbán. He pointed out that all the unresolved questions related to Hungary would be, step by step, handled in a comparative European framework. He said it was becoming clear that Hungary had not applied any legal solutions in its economic policy or in its constitutional system that had not been in force in some other member state of the EU.

The Prime Minister pointed out that some instruments of government that Hungary was the first to introduce – and for which Hungary was widely criticized – were to become accepted in Europe. „Recently the Hungarian transaction tax has attracted a lot of attention. It is an instrument for economic policy which makes it possible that a tax form related to consumption and distribution can replace taxes imposed on work. The successful implementation of such system could well gain historic importance,” he said.

Viktor Orbán claimed that EU members states could be divided into two groups on the basis of whether they only have competitiveness problems or if they were inflicted by high state debt as well. Hungary is among those 3-4 member states that will be able to reduce debt and increase competitiveness simultaneously this as well as next year.

The Hungarian government fights against the double standard employed in connection with the infringement procedures as well. „We regard the decision that initiated the partial suspension of Cohesion Fund payments for Hungary as unfair,” said Viktor Orbán. Hungary is the country that successfully meets the financial requirements in three consecutive years.  The Prime Minister declared that he was optimistic and full of hope with respect to the coming EU decisions and meetings concerning theinfringement procedures launched against Hungary.

The European Commission will be issuing its assessment concerning the stability and convergence programs of the member states next week, and the ECOFIN will be making a decision about the possible withdrawal of the suspension of Cohesion Fund payments for Hungary in June.

Viktor Orbán underlined that Hungarians had worked a lot to have their performance recognized by the EU and that he, in his speech in Brussels, highlighted the sacrifices made by the Hungarian people and made it clear that the Hungarian government would support EU incentives for economic growth, but only incentives that would not lead to further debts.

(Press Office of the Ministry of Public Administration and Justice)