21 November 2013, Tokyo
Distinguished Chancellor, Mr. President, Ladies and Gentlemen,
First of all let me thank you for awarding me with the title of “Honorary Doctor” of your respected university. I am a lucky man, because the Minister is here, who would hopefully give me a permission to wear that title, even in Hungary.
Ladies and Gentlemen,
It has been a long time since a Hungarian Prime Minister paid an official visit to your beautiful country. I was happy to receive an invitation, so now that I am here please allow me to share a few thoughts with you about Hungary, Europe and the changes taking place around the world that I am convinced will bring us, the Hungarians and the Japanese closer.
It is a personal joy to stand here as Prime Minister. Let me explain why: in 1997, I was involved in a future leader program and I was invited to a three-week-long scholarship program here in Japan.
Two years later, I was elected as Prime Minister for the first time at the age of 35. It is easy to imagine how difficult it was to gain some respect in international relations, but I have always received it from the Japanese based on the personal contacts built at that scholarship program.
So, it is not an exaggeration that you have my personal commitment. While standing here it comes to mind that when I was growing up, Hungary was still suffering from communism and sometimes we felt that it would last until the end of time. At the time, nobody was allowed to leave the country unless they had special permission. In this respect, even a trip to Austria, which is a neighbouring country, seemed like an exotic adventure.
Few people dreamt of ever getting to Japan. And now I am here. Louis Armstrong was right: “What a wonderful world”… At that time, Japan was truly seen as the country of the rising sun, the modern world, the latest technological wonders, the best cars, motorbikes, tape recorders and record players.
Accordingly, the Japanese are highly respected in Hungary. Not only because of the factories, which naturally command respect in their own right, but also because of the country’s culture and history. Moreover, Japanese values are something that we Hungarians deeply acknowledge and look up to.
This is a work and family-centric country. We do not have a more than 2600-year continuity, but we have been living in our homeland and we have had our own state for 1100 years. In this regard, we do respect history, heritage, culture and continuity.
We Hungarians even identify ourselves according to cultural terms. I think it is not a coincidence that the Hungarians and the Japanese have a special connection through the language of music. If I remember correctly, Japan was one of the first countries to introduce the Kodály Method in music education.
The excellent Japanese conductor Kobayashi Ken-Ichiro won the first conductors’ competition organised in Hungary in 1974, and went on to conduct the Hungarian State Symphony Orchestra for many years. Work, traditions, the family, moral and intellectual values, and innovation.
These are things common to the Hungarians and the Japanese that bring them close, regardless the obvious differences in size and productivity. And in my view, it is on the basis of these common foundations that we can build successful cooperation in the future.
Distinguished Ladies and Gentlemen,
I don’t know how you perceive things, but from Europe it seems obvious that unprecedented changes are now taking place around the world. I think that what we are experiencing as a crisis in Europe is actually a phenomenon that is accompanying the deep and rapid global transformation of the economy, science, defence, and in the areas of soft-power, communication and culture.
Currently, these changes are unpleasant and even painful to us Europeans. To speak the language of figures: Europe’s share of the world population is 8%; while we account for 25% of global production, but 50% of the world's social expenditure.
These figures raise a serious dilemma on their own account, but here comes the even darker, other side of the coin: the total state debt of the EU 28 countries is some 11,000 billion Euros. The yearly repayment of this sum with interest is more than 2,000 billion Euros, and the member states of the European Union produce approximately 1,200 million Euros of new debt every day! Who could be crazy enough to finance a system like this?
And above all, who is ready to do so from cheap sources that are indispensable for competitiveness? This is pure evidence, that in the Western world we can no longer keep living in the way we have been until now. Regardless of whether we Europeans like it or not, the crisis is not some sort of a conjunctural problem, after which everything will get back to normal once it has been sorted out, but a structural problem which represents the end of an era.
Global transformation is essentially the transformation of power relations; new centres of power have evolved within the global economy, which have an increasingly decisive impact on global processes. Unfortunately, however, Europe, our home, is placed on the receiving end instead of it being the driving force of transformation.
I think everybody understands that we Europeans do not want to live with this. We don’t want to fall behind, or for Europe to lose its significance and influence. Moreover we do believe that Europe can regain its influence, attractiveness and success if we are able to renew ourselves.
Even clearer, the situation nowadays is the following: emerging powers win, we Europeans lose. So the question is whether we can turn things into a win-win solution, and my answer is: this depends exclusively on Europe. To put the question even more precisely: will Europeans be able to improve the continent’s competitiveness or not?
When we talk about competitiveness, we usually think about economic competitiveness – but the situation in Europe is more complicated than that. What I would like to say is that losing economic competitiveness is the consequence and not the cause. The underlying reason may be concealed a little deeper. It is a well-known thesis among politicians that every civilisation has two fundamental resources.
One of these is human resources, in other words work and producing added values; the awareness of permanence, namely, that certain values never change, so there is always something to lean on, and bearings in every situation. There are cultural and moral traditions, roots that the human community can draw on over and over again.
In the case of Europe this is Christian culture. What made Europe really strong in the previous centuries can be summarised as follows: Ora et labora – which means: Let us pray and work. This is what the Benedictine monks adhered to. In the language of modern communication, I would translate this as: labour and Christian culture.
This is what made Europe a great, pioneering civilisation. By the end of the 20th century, we got to the point where Europe simply falsified its own history, with reference to Christian traditions being left out of the European constitution. But this is not the only thing Europe denied. It equally denied work, its other fundamental resource.
What I am now speaking about is perhaps not perceivable, not understandable and does not make sense to somebody who has a more traditional way of thinking. In the 70s and in the 80s, the West started deceiving itself that scientific and technological development, machines and money would solve everything for us. We believed that it was possible to live in greater prosperity while working less.
This is how Europe turned its back on its two civilisational resources, the added value-producing work carried out by its own citizens in its own region and Christian cultural traditions. My point is that Europe is capable of taking its fate in its own hands if it builds on its own traditions and values, namely: human dignity, freedom and obligations, where merit is based on work and where natural human communities and relationships, like the family and the nation, are respected.
Europe doesn’t need more rules, but rather more trust, more opportunity and some fresh air. Europe needs to be freed from liberal distrust and the limitations of greed left to roam free.
Ladies and Gentlemen,
Let me say a few words about Hungary. We Hungarians are often said to be the most western easterners, and the most eastern westerners. This refers to our origins. This may be true and provides an explanation for why even modern Hungary has been open to and interested in what is happening in the East.
It explains why we have always given the world scientists and artists who later became widely known and respected around the globe. What is furthermore worth knowing about Hungarians is that we speak a language spoken by no one else in the world. This language creates a special way of thinking, which culminates in pioneering innovations. It is enough to say, that Hungarians invented the computer, the ballpoint pen, and the espresso coffee machine.
Not a bad list, I think. I would say that we are a freedom-loving, proud, hard-headed and passionate but friendly people. An exceptional event took place in Hungary in 2010; a special event during which a political community – namely ours – gained two-thirds of the seats in Parliament. Hungary is a parliamentary democracy, so we received the strongest possible legitimacy for executive power and administration.
We began to completely overhaul the system in Hungary by placing work and Christian values at the fore. We applied a series of so-called unconventional solutions. We began to transform the economy, the state and its sub-systems in the same spirit. Allow me to point out that Hungary was on the brink of bankruptcy when we took office in 2010 and was rated a higher risk country than even Greece.
This was just 3 years ago. But we succeeded in driving the budget deficit down to below 3% on a sustainable basis, and we have a primary surplus in our budget. We are one of the few countries in Europe now in which sovereign debt has decreased, from 85% to 77%. As a guarantee, the new constitution sets the debt limit at 50% and declares that Parliament cannot adopt a budget that increases government debt. We reduced the number of politicians by nearly 50%: we reduced the number of local councillors by 45% and the number of MPs also by 50%.
As a consequence, following the next elections the Hungarian Parliament will be just half its current size. We introduced a flat rate 16% personal income tax combined with a generous family tax credit system. We also decreased the corporate tax rate for small and medium-sized enterprises to 10%. We introduced one of Europe’s most flexible labour codes with the concurrent support of both the major trade unions and employers’ associations.
We are confident that these measures will give a boost to the already remarkably competitive economy of Hungary. 50% of our exports are high tech and high-quality manufacturing related, resulting in a 2% annual current account surplus in recent years – which is a good figure in a European context.
According to the Economic Complexity Index, the sophistication and complexity of Hungarian exports rank 14th globally. We have good reason to believe that growth, which has now begun after all these changes, will remain sustainable in the long run.
Ladies and Gentlemen,
Now comes the point which may explain why we are here in Japan. This official visit is not a typical protocol visit. We came here to convey a message to you. The message reads as follows: Central Europe is open to you.
Although there is much debate at the moment in Europe about the future of the European economy, there is no debate about the fact that Central Europe is looking forward to a promising decade, meaning that Central Europe will be the leading region in Europe in terms of economic growth and performance.
Despite all the problems of the European Union, there is a significant region with a population of 80 million and a very promising outlook called Central Europe, and Hungary is part of it. The greatest potential for European growth lies in this particular region.
This region offers good opportunities to investors; logistically this is probably the best point from which to reach the huge market of the European Union. This region is already over the crisis; it has renewed itself successfully and it is now competitive even with newly emerging economies and nations.
To put it very simply: we are back on the map and we are ready to play a win-win game with the most competitive economies of the world. I wish good luck to all of us in taking advantage of this historical opportunity.
Thank you for your kind attention.
(Prime Ministers Office)
