12 March 2014

Péter Molnár: Hello everyone! Today's guest on Miskolc Television is the Prime Minister of Hungary, Mr. Viktor Orbán. Good Morning, Mr. Prime Minister!

Viktor Orbán: Greeting to your viewers, good morning!

PM: Last October, the Government declared Miskolc and it's vicinity a priority development centre, didn't it, and you personally announced on 15 November that the Takata Corporation was bringing to Miskolc its latest development project, which is the largest greenfield investment project to be realised in Hungary since the Mercedes factory; it will create a thousand jobs in the region. Today, the foundation stone of the factory has also been laid. Is this just a foundation stone, or with regard to Miskolc and the surrounding area can it also be regarded as a milestone?

VO: I see it more as a milestone. In addition to which the factory will be constructed very quickly. Yes, we are talking about a thousand new jobs, directly, but since the factory will also need suppliers and a factory of this size also needs services, we can also count on the creation of several hundred jobs indirectly as a result. And if we calculate with or rather take into account the fact that a huge corporation of this kind needs a good engineering base, and you have an excellent university here in Miskolc, then we can be sure that it is only a matter of time – and I am pushing for it to be sooner rather than later – before a deep-rooted cooperation develops between the company and the university. As a result of which, if we act accordingly, more investment projects – engineering, research and development projects – will also be realised. The first tentative steps have already been made in this direction.

PM: Could this determine the direction for the University of Miskolc in the upcoming period?

VO: We think so, yes. A university cannot be taken out of the environment in which it lives and works, this is Miskolc's university. And Miskolc was an economic and industrial centre in the old days, when it was still a proud 'steel city'. That's how I came to know it from the song by the pop group Edda, as a boy from western Hungary. And I am sure that we can rebuild the traditions that still have their remnants here, and I think that the culture of industry has not only remnants here but that major elements of it still exit in the city of Miskolc. And so I believe, if I interpret the expert reports correctly, that with a good government policy, a good local government policy and with the partnership of the companies already present here, this city can once again become an economic and industrial centre, like say Győr is in the Transdanubia region.

PM: And this is a different kind of industry, a different technology than there used to be here, than the steel industry or Digép, the Diósgyőr Machine Works, was? This represents a high added value industry, doesn't it?

VO: Undoubtedly. If we take a look at the companies who have settled here in Miskolc, we can see that they are all related to the modern vehicle manufacturing industry. And the automobile industry was always among the frontrunners on the European continent, meaning it is a sector of industry that works with state-of-the-art technology. The numbers are staggering. There are over 700 companies in Hungary that are involved in vehicle manufacturing or serve as suppliers to the industry, and they have a huge export capacity and employ over 115 thousand people here in Hungary. And so, with regard to the future, it is an excellent investment on the part of the City to attract automobile industry investments, but I would not ignore traditional industry either, although resuscitating that is much more difficult. I was in Ózd recently, and the problem is also familiar from there. Mining, the steel industry and heavy industry are areas that are difficult to resuscitate, but we should not give up on then completely because these are fields in which we have expert knowledge and experience. We still have the old pros, if I may use that expression, with the help of whom we could re-launch vocational training, and at perhaps a lower volume, but using more modern technology, I think perhaps even heavy industry will have a future in Hungary.

PM: As you mentioned, the large multinational companies need suppliers. And I think you have mentioned before that Hungary requires 12 thousand prospering small and medium-sized enterprises that can support these companies. If industry continues to gain strength, do you think that small and medium-sized enterprises in the region can also gain strength? If needed, with support from the Government or the European Union?

VO: We would like that to be the case. When we distribute the economic resources and development funding for the upcoming seven-year period, then that will be a priority criteria, and we have already begun work on this. Today, Hungary has around 2000-2200 Hungarian-owned, and with that I mean companies that are truly Hungarian and whose owners are Hungarian, not simply companies that are operating in Hungary; so we have around 2000 or 2200 Hungarian-owned enterprises that are capable of placing goods and services on both domestic and foreign markets in the hope of earning profits. If we perform the required calculation based on what we have learned from the history of the European economy, then we will find that a country the size of Hungary requires around 12 thousand export-capable companies of this kind. There are 2200 today, and we need to get from here to around 12 thousand. For this we need entrepreneurs; we need courageous, young people with university degrees who are in possession of a new kind of knowledge; we need highly-trained workers and a good workforce; we need connections, meaning we cannot get ahead if we only do business here within the Carpathian Basin, so we must go forth into markets that fall outside the Carpathian Basin; and we need a government that supports entrepreneurs and development projects of this kind. If we have all of these factors together, then that 12 thousand strong main body of the army will come into being and the Hungarian economy will be in the hands of Hungarian businesses and we will all be standing on their sturdy legs, and then if the direction of the international winds take a turn for the worst, they will still be unable to capsize us.

PM: We are talking about seven thousand billion forints when we are talking about European Union finding for the next seven years, aren't we, over seven thousand billion forints. And the Government's intention is to put 60 percent of this towards economic development, am I right? Can disadvantaged regions such as Miskolc receive more of this sum in the form of funding or targeted funding perhaps?

VO: It always depends on whether there are any ideas. If there is an idea and there is a viable proposal, then yes. But you aren't doing too badly from this point of view. Miskolc shouldn’t regard itself as a city that hasn't received all possible and humanly calculable opportunities in recent years. If you do a quick calculation in your head, you will see that we have taken 36 billion forints in debt off the shoulders of the city. It's as if someone had paid all of that instead of you, and they will pay it, in view of the fact that the Government has assumed those debts of yours. You have received around 76 billion forints in operational funding. That's cash to all intents and purposes. And you have received 92-93 billion forints in development funding just since 2010. And the city also received funding prior to 2010. So if you add that up, only for the period since 2010, then it comes to about half a billion euros. And with this, all I want to say is that Miskolc isn't starting from nothing. So it isn't like in '93 or '94 when heavy industry collapsed after the regime change; it's 2014, and we have behind us three or four years spent mutually in development. So Miskolc has something to depend on, it has something to stand on and it has somewhere to launch itself from. These are large sums of money and – I don't live here so I probably have a better perspective because I am outside the forest; you can hardly see the wood from the trees, but I am looking at the whole forest from outside – when I come to the city I can see the changes. Of course, everyone is dissatisfied. Partly because we are Hungarian and partly because we happen to have a relatively difficult year behind us. Everyone would like to get ahead faster and move forwards at a greater pace, and everyone is right. It is an important motivation for people to have some kind of ambition or reason for being dissatisfied, a will to act. But we have made huge headway here in Miskolc over the past three-four years, and if we can continue what we have begun for the next four-five years then you will see that it is not an overstatement to declare that Miskolc will again be a stronghold of the Hungarian economy.

PM: There are of course certain groups here who have been living off benefits until new, or who are low-skilled or unskilled and became redundant following the regime change. Public work has helped their situation. We can also see, from the unemployment figures, that the level of unemployment in Hungary today is around 8.9 percent, which means the number of people who are unemployed is below 400 thousand, while more than 4 million people are working. In Miskolc too, we have seen over the past three years that the level of unemployment has fallen by 3 thousand – from 12 thousand to 9 thousand. Can we help by implementing new public work programmes, or what is the next step over and above the public work programme, let's say, to help those who have been living off benefits until now?

VO: The way one should imagine this situation – and I always ask everyone to put both their feet on the ground and to stand firmly, meaning we shouldn't talk about principles and ideologies, but about reality – the fact is after all that there were hundreds of thousands of people in Hungary, and there are still families in which the children have never in their lives seen their parents get up in the morning and get ready to go to work, bring their pay checks proudly home at the end of the month, sit down to do their household accounts and maintain the family from their salaries. And a country in which tens of thousands of people live in this way does not lead to a bright future and does not have a bright future ahead of it. And of course, people need to make a living somehow, and if they don’t make a living working, because there is no work available, then they will make a living some other way. From crime, from begging, by taking on loans or they'll find a way to make a living somehow. Because live we must, the children need food to eat, people must get by somehow. What I viewed as the task of the Government – and this was also a personal undertaking on my part – was that we must take the country to the point – and for this I ask for the support of the country's voters – where we can state that everyone in Hungary who wants to work is capable of finding a job and maintaining their families from their wages. Now, people who haven't worked for ten-fifteen years and whose education is not up to scratch, who are difficult to employ within an economy that has since changed, who are possibly incapable of adapting to the labour market because they have been out of it for so long; these people must somehow be directed back to the labour market. They need a gateway through which they can step back into the world of work. And this gateway is public work. And so I believe that public work is important to every law-abiding citizen of Hungary. And not just because this way people who live off benefits can now make a living from working, and a better living than they would do receiving benefits, because unemployment benefit is only 22,800 forints-a-month, while the average wage for public work is around seventy-something thousand forints-a-month; it differs from between around 50 and 90 thousand forints, but the average is seventy-something. So if we want them to make a living working instead of receiving benefits and if we want to live in security; if we don't want to think that people who are without work and people who are in a difficult situation will take away from us what we have worked hard for and crime will increase; if we don't want this, then we must create opportunities for those who are in a worse situation than we are. And so public work is an important economic measure and an opportunity, and at the same time it is important from the point of view of employment, and is also important from the point of view of middle-class people who have work, because nobody can feel safe in a country where not everyone has their daily bread. This is why public work is important, because to be honest, we only want to pay unemployment benefits to people who are incapable of working. Because we want to give people who are capable of working and who have the physical capacity to make a living working with their two hands an opportunity instead of benefits; an opportunity to work. And if they are not sufficiently educated then we undertake to help in their training and are happy to educate them, but they need to want it too, to be able to read and write, to have a profession, to allow themselves to be trained for a certain vocation, and the list goes on. And so all I am trying to say to you with all this is that I regard the debate that is going on in Hungary today concerning the issue of what kind of work we require, as a bad debate. Because we need every kind of work. Engineers need investment projects that apply state-of-the-art European technology; skilled workers need quality workplaces that provide a professional challenge; office workers need offices to work in; public administration employees need public service positions; and the first stop for people who have no qualifications and who are living off benefits is public work. An important question is whether people can make the transition from public work to the job market and to the world of job opportunities provided by the real economy. From what I can see, perhaps six-eight percent of the people involved in the public work programme are currently capable of grasping onto the job market and stepping up from public work into a more secure job that provides a better income.

PM: What we have been talking about was of course of one Europe's biggest problems – we didn't mention it earlier – that a welfare-based economy became established in Western Europe, whereas we would like to transform this into a work-based society.

VO: And we here are patting our backs – with suitable modesty – in view of the fact that the last time this many people were working in Hungary was in 1992. We are above 4 million. But the population of the Czech Republic is roughly the same as ours and 5 million people are employed there. So what I mean is that 4 million is a nice achievement, but we have no reason to be satisfied. There are still a few hundred thousand people for whom we need to provide work. Public work, work within the labour market, whatever they require. This will continue to be an important task over the course of the next four years.

PM: You said in relation to 2010 that it was a second regime change, so it was the second in 20 years. I suppose can we say that it was an economic regime change when we voted at the 2010 parliamentary elections. And there will be new elections on 6 April. Will this also be a landmark election?

VO: It is my hope that we will be able to continue what we began in 2010. And so I would prefer to think back on this event as a reinforcing election, an important and historic election, but to all intents and purposes a reinforcing election that strengthens the path we have been moving on until now. But of course the decision isn't mine; it's up to the voters to decide what direction the country will move in. With regard to Miskolc what I can say is that you are on the doorstep of an important era, so great acts are to come. Here's this whole baths project that will be realised in two phases and on which the cabinet has already voted and will support; we will be completing that. I think all of Miskolc will be rightly proud of it and it will become one of the symbols of the city. We are also supporting the city with regard to sport. We have decided on and earmarked the funding for the construction of Diósgyőr football club's new stadium. Now it is just up to the people of Miskolc to make use of these leisure and sports opportunities. So in addition to job creation there will also be development and investment projects here that will convince the people of Miskolc that we have indeed entered a new era – there are not only more jobs and more secure jobs, but that the standard of living can also improve.

PM: Prime Minister, thank you very much!

OV: Thank you!

(Prime Minister’s Office)