Prime Minister Viktor Orbán met with President of the European Commission José Manuel Barroso on Wednesday in Brussels. After the meeting, the Hungarian Prime Minister stated that for Hungary it is a moral issue, rather than a political or economic one, that the excessive deficit procedure launched against the country since it joined the EU is ended.

He pointed out that Hungary's budget deficit was below the 3% target both in 2011 and 2012 and will remain so in 2013, adding that "Hungary and the Hungarians have done everything to see that the excessive deficit procedure against the country is lifted".

Hungary has been under excessive deficit proceedings since 2004 the Prime Minister reminded, adding that he hoped that "if the evidence proves convincing", the excessive deficit procedure against Hungary would be lifted in 2013.

"We would like to free ourselves from the past and its shadow. We wish to re-join the company of reliable, predictable and respected countries also when it comes to budget management", he emphasised.

Prime Minister Orbán also spoke of the fact that he supports closer economic cooperation and coordination, because in his view this is the only way to combat the crisis within the Eurozone. He also announced that in March, Hungary would be publishing the schedule which would take the country closer to certain elements of the plan for a banking union.

At the press conference in Brussels, Prime Minister Orbán emphasised that Hungary would not just like to manage the crisis, but is also preparing for the period following the crisis. He reiterated that life for the Hungarian people during the past three years had not been difficult because of austerity measures, but because the Government was working on the total reorganisation and renewal of the country.

In reply to questions from members of the Hungarian press with relation to the state of negotiations with the European Union and the International Monetary Fund (IMF), the Prime Minister said that the negotiations had been going on for some time, all parties knew everything about the others and there were no circumstances that required further clarification. Hungary is capable of financing itself from the market and would have liked to acquire a so-called flexible credit line from the IMF, which would have served as a safety net, but which it has not yet received. "We require nothing more. We don't need a loan", the Prime Minister stressed. The standpoints have not converged, but until the EU and the IMF reject Hungary's request, it will remain valid, he added.

The Prime Minister told reporters that a year ago they had agreed with the President of the Commission that they would try to resolve the issues that were causing conflict between Hungary and the Commission within a year. These sources of conflict included reservations with regard to the independence of the national bank, and objections from Brussels relating to the retirement of judges and the restructuring of the office of the data protection ombudsman. In the opinion of Prime Minister Orbán, there were issues, such as that of the Central Bank, which were successfully resolved relatively quickly, and there were others with regard to which Hungary was determined to defend its standpoint and therefore left the decision to the European Commission. He noted that this is "the European way to resolve differences of opinion".

Prime Minister Orbán stated that he was unable to bring Hungary’s position closer to the Commission’s in every case, referring to the fact that in November the European Commission had decided that the law on the retirement of judges was discriminatory. After one year it may be stated however that one way or another, through agreement, court proceedings or via decisions, every conflicting issue had been or could be resolved, the Prime minister added.

Prime Minister Orbán also reassured José Manuel Barroso that the Hungarian people have a European consciousness, identity and commitment, and that the Hungarians' only request is that they receive fair treatment.

The Prime Minister also held a lecture at Brussels-based think tank The Bruegel Institute, where he stated that Hungary has become a European success story and fair treatment dictates that the country should be abrogated from the excessive deficit procedure. Please see the full speech here.

The presentation was followed by a Q&A session during which the Prime Minister answered questions and comments regarding the welfare state system, the European banking union, the independence and new governor of the National Bank of Hungary and the economic importance of Central Europe.

In connection with welfare services, he explained that too many people are dependent on entitlements, pointing out that the Central European approach needs to be changed in a way that people’s understanding of existence shifts from outside support that is taken for granted to merits and results. He concluded that the future lies in a labour-based society, a so-called workfare state.

With regard to the banking union, the Prime Minister stated that Hungary considers it a joint institution that will be required in future. He added that because of the common currency, eurozone states have limited freedom to work out a fiscal position and the union is not avoidable for them, whereas states outside the eurozone have wider space to create a proper mixture of economic policies. Hungary’s attitude is positive about joining the system of central banking supervision, but its possibilities and entitlements need to be considered.

He also said that he regards Hungary as a success story. We have to acknowledge the risks ahead of us, but at the same time, we have the capacity and resources to find the right solution to avoid them.

He highlighted that during his first premiership, the country's public debt was reduced to 53 per cent of GDP. Coming back to power in 2010, it was 85 per cent and now it is decreasing again year by year. Taking his two terms into account, he concluded that the Government was able to lower both public debt and the budget deficit for seven consecutive years. This is another reason why the excessive deficit procedure should be lifted.

The independence of the national bank was also a subject of discussion. First, Viktor Orbán underlined that the independence of the national bank is untouchable and the Government respects the Constitution and the Hungarian legal system which declare the independence of the bank. Nevertheless, a new President has to be nominated when the present governor’s mandate expires.

The Prime Minister, with the intent of defending Hungarian interests, will propose the next governor of the central bank just one day prior to the deadline in order to avoid debate about the candidate.
Finally, Viktor Orbán emphasized the importance of Central Europe within the European Union, stating that the eurozone cannot survive without incorporating the potential Central European countries bear with them.

(Prime Minister's Office)