On January 23 Hungarian Prime Minister Viktor Orbán gave a speech at the 4th Lámfalussy Lectures conference in Budapest. Below is an excerpt from his talk; the entire speech has been subtitled, and is available here.

Many thanks to CrossWare for yet another mammoth effort of translation, and to Vlad Tepes for the subtitling:

Transcript of the full speech (47 minutes; the above excerpt is from 33:36-38:36):

00:04 Deeply respected Mr. Governor and distinguished guests

00:08 of the conference, I thought a lot about

00:12 accepting the invitation to this conference.

00:16 … It is beyond dispute,

00:20 that the invitation by itself is an honour,

00:24 … but such world political events,

00:28 are happening …

00:32 couple of them were quoted here: Brexit,

00:36 a new American president with all its consequences.

00:40 In the shadows of such events,

00:44 If one were to speak sentences without a strong political content,

00:48 It would not be possible to talk about the future.

00:52 But this contains risks, and could even tip the conference out of balance

00:56 from its usual peaceful progress.

01:00 This is what I had to weigh, but finally, I accepted the invitation because,

01:04 first of all Mr. [Jacques de] Larosière — since the beginning of

01:08 the ’80s we followed his thoughts here in Hungary.

01:12 So a real legend has arrived here, and

01:16 to sit with him at the same table is by itself a great honor.

01:20 On the other hand, we have here also Mr Tian Guoli [Chairman of the Board, Bank of China],

01:24 who has been our friend for long years now,

01:28 in general, also but especially

01:32 in the opening to the East.

01:36 He is the one who at our frequent meetings

01:40 prunes back our overgrown

01:44 European self-assessment

01:48 by telling us those numbers,

01:52 which you were able hear from him, just before me.

01:56 I owe a great deal of gratitude to him, and I am honored

02:00 to be together with him today.

02:04 Additionally, the rise of China

02:08 brings our attention to a psychological problem here in Europe.

02:12 …

02:16 There is a saying that sounds simple or even primitive,

02:20 “What is, is possible.”

02:24 Europeans do not understand this.

02:28 At least when it is about China, they do not understand it.

02:32 Instead when we learn about what is happening in China,

02:36 We use a significant portion of our energy to explain

02:40 why it is not possible, what has happened in China.

02:44 Or if it is, then “it is temporary”, “has no basis for its existence”,

02:48 “this tempo cannot be sustained”, “there is such internal stress”,

02:52 “in Chinese society, it will fail politically”. So instead

02:56 we study, and understand, that what is exists: IT IS.

03:00 We need to explain to ourselves that all that is possible

03:04 in China, and ease ourselves backwards, so we might accept that fact and try to

03:08 learn from it, but we try to convince ourselves

03:12 that is not happening. So with the meeting with Mr Chairman here,

03:16 the meeting with Chairman Tian Guoli,

03:20 the meeting could save us from this European

03:24 problem. Dear ladies and gentlemen,

03:28 but the real deciding factor for accepting the invitation,

03:32 was the person of Professor [Alexandre] Lámfalussy.

03:36 because… as Mr. Larosière…

03:40 mentioned we remember a great man today,

03:44 who moreover was a fatherly friend

03:48 — and so remained — of Hungary, after

03:52 he had to flee from Hungary because of the Communists.

03:56 He had to flee to Belgium, but despite that

04:00 he remained Hungarian and he stayed a friend of Hungary,

04:04 because he was able to distinguish between the actual political regime

04:08 and the motherland, which is a virtue that is worth bowing our heads for.

04:12 Additionally he was a good man,

04:16 as you would hear said. We have saying in our culture,

04:20 that saying: “Peace on Earth for the people with goodwill,”

04:24 and Professor Lámfalussy was a person of good intentions,

04:28 and for this he received peace, love and respect from

04:32 everybody. If this has been not enough,

04:36 let me quote it here for you,

04:40 actually he was my colleague too — I am bragging now! —

04:44 He also worked with me as an advisor

04:48 alongside me; he was my supervisor,

04:52 in the intellectual meaning of the word.

04:56 I received his warnings about my youthful excesses,

05:00 “There will be trouble from this, Viktor!” he would say.

05:04 He was our messenger and our guarantor, too,

05:08 in the Western financial world.

05:12 We can be only grateful to him. Moreover,

05:16 we could learn from him too,

05:20 and it is worth to see some examples from his life,

05:24 and transplant them into our own lives.

05:28 He was an open man and this has exceptional significance,

05:32 in a Western democracy. In our own perception,

05:36 in our own — we could call it Hungarian or even Central European — perception,

05:40 a good democracy

05:44 is based on arguments, and we are a followers of

05:48 the debate-based democracy, but that

05:52 requires open people, who need open spirit

05:56 and a straight character.

06:00 And in Professor Lámfalussy both the open spirit and straight character were present,

06:04 so we could say he had the best qualities of our kind — the Hungarians —

06:08 he embodies our best virtues.

06:12 I could also learn it from him;

06:16 he even phrased it similarly: “In the end,

06:20 character always matters.” There are these hard intellectual

06:24 questions, which must be deliberated,

06:28 and that requires intellect. Let me note, that buying intellect

06:32 is certainly possible, especially if someone is a prime minister — end quote.

06:36 Because he can hire the best intellects, and “he will have a brain.”

06:40 It is that easy in our profession, much easier than in other occupations.

06:44 So there is the intellect and there are the hard

06:48 questions and the intellectual challenges, but in the end,

06:52 when the time comes to make a decision, said Professor Lámfalussy,

06:56 character always counts. And he continued his sentence,

07:00 “so, dear Viktor, you should also go once a year to a desert for a week

07:04 and walk! Like I do, too,” he said.

07:08 The professor kept up this custom, as long as his physical wellbeing allowed him,

07:12 The most important thing I learned from him

07:16 came from a provocative situation,

07:20 if the older ones still remember,

07:24 at the beginning of the ’90s.

07:28 Bloody and fierce

07:32 ideological battles were fought to decide what type

07:36 of character of the political system should have after communism: Liberal, Christian, or what kind,

07:40 Those were hard times, full of provocations, and the professor

07:44 — who was a faithful Christian — could not avoid, when he came home,

07:48 a question thrown at him

07:52 by an ill-mannered journalist:

07:56 “Are you a Christian?” Let’s note

08:00 the Christian rule that we do not ask such questions of each other.

08:04 So he asked this question, and the Professor’s answer

08:08 — since then I have been keeping it in my pocket or in my heart —

08:12 and I think the most proper response, so he said with utter calmness,

08:16 — to the question if he is a Christian —

08:20 “I try to be, but I am not always successful!”

08:24 Respected ladies and gentlemen,

08:28 those were the memories that in a Lámfalussy conference

08:32 I believe were worthy to

08:36 evoke. Nevertheless,

08:40 I do not believe that these circumstances would have provided the reason

08:44 to name this conference after Sándor Lámfalussy,

08:48 but we probably had better find the reason in the fact

08:52 that he is being remembered, as the father of the euro in Hungary…

08:56 Once when I

09:00 recommended him for an award, I wrote in the recommendation

09:04 that he is the man who is not world-famous only in Hungary.

09:08 Probably our guests do not understand this sentence,

09:12 but we Hungarians understand precisely what this means.

09:16 A Hungarian who was not just world-famous in Hungary!

09:20 and in his role of establishing the Euro

09:24 made it possible.

09:28 I am not sure he would have agreed to name an award after him,

09:32 Because he did not believe that he would be the father of the euro.

09:36 When I talked about this with him, he said of course there is much

09:40 work which needed to be done on this, but the truth is, for the euro

09:44 the knowledge of an economist was not really required, but

09:48 — it was very handy that it was available —

09:52 but a solid political will.

09:56 so the founder or parents of the euro may be found among economists,

10:00 but look among politicians of the time, and mostly Germany and France come to mind,

10:04 who distinguished themselves in that topic.

10:08 I asked him about how …

10:12 he had courage to advise

10:16 politicians to create a monetary union,

10:20 that do not include a fiscal and political union?

10:24 Did he think this might be a gamble?

10:28 He gave an astonishing answer:

10:32 In the end the politicians will admit that after the monetary union

10:36 they must create a fiscal and a political union.

10:40 This truly astonished me, because for such a historically large-scale venture

10:44 to be given to the discretion of the politicians is a very

10:48 hazardous undertaking. And it seems like time up until now

10:52 has not proven the Professor’s point, but rather mine, or our doubts.

10:56 Professor Larosière’s presentation was basically

11:00 about this issue. He essentially asked if are we going to have

11:04 enough discretion for the decision-makers

11:08 To make the necessary decisions, without which a monetary union

11:12 cannot continue to exist.

11:16 I do not know what the answer to that question is; I only know

11:20 that this is the largest question about the European future.

11:24 What I wanted to highlight from this little story,

11:28 what I could draw as conclusion, will sound like

11:32 it was from Professor Lámfalussy: we learned that the basis of

11:36 a successful economy is politics,

11:40 most importantly it is stability.

11:44 Respected ladies and gentlemen, a strong economy

11:48 is a prerequisite, as we learned.

11:52 the financial world and political representatives

11:56 must pull the wagon in the same direction.

12:00 Time proved his point. If we just think about the recent history of

12:04 the Hungarian National Bank,

12:08 we can say when the National Bank was in opposition [Socialist-led], it was not too long ago,

12:12 we can still remember. As a result political forces

12:16 and the financial world did not pull in a single direction.

12:20 Hungary suffered a lot, unnecessarily.

12:24 Since the National Bank is now not in opposition, but

12:28 looking for opportunities for cooperation with the political leadership,

12:32 economic development is visible, or more correctly

12:36 spectacular the economic development, as

12:40 previous speakers have already commented on.

12:44 Respected ladies and gentlemen,

12:48 after this I must talk about,

12:52 the time since 2008, which was what

12:56 our French presenter called a “wakeup call”,

13:00 if I understand it correctly. So since 2008

13:04 since the financial crisis, a paradigm shift occurred in the world economy

13:08 and world politics. And today the measure of success

13:12 for European countries

13:16 is which countries who adopted those changes immediately,

13:20 which ones did it more slowly,

13:24 and which are still in the phase of awakening.

13:28 … This paradigm

13:32 Shift — which is a snobbish

13:36 expression, but still has meaning.

13:40 It want to say something like this to everyone:

13:44 There was an old system in the world,

13:48 where our thoughts were born and kept,

13:52 and we placed them, and it sounded like this:

13:56 after 1990, as elegantly phrased,

14:00 the world has only a single pole.

14:04 There was only one power center of the world,

14:08 we lived in that world for almost 20 years,

14:12 the line of force there were organized around that single center.

14:16 The core of the new paradigm is that there are multiple centers.

14:20 I will not say poles, because in the Hungarian language “multiple poles” means only two,

14:24 The North and the South, but I am not talking about those. What I am talking about

14:28 here will not involve only two poles, but more,

14:32 so more centers… more power centers is the correct phrase,

14:36 or more precise.

14:40 The necessary repercussions of this paradigm change,

14:44 about which there is no wide consensus,

14:48 if it really exists,

14:52 the nature of the crisis in Europe after 2008 was prosperity-related,

14:56 or structural or about competitiveness.

15:00 There is no consensus among the political leaders of Europe. If you were to interview,

15:04 the 27 European prime ministers, you would see,

15:08 there is no agreement among them, which means

15:12 in the paradigm change, now as well as before

15:16 a necessary accompanying element,

15:20 the representatives of the old order, must have a

15:24 debate with the representatives of the new order — we Hungarians could tell tales

15:28 about our new economic policies after 2011.

15:32 Respected ladies and gentlemen, if someone speaks at a conference like this,

15:36 the first question one must ask, honestly and

15:40 openly — and make a decent

15:44 effort to answer it, too — sounds like this:

15:48 How do we interpret the world where this conference takes place?

15:52 …

15:56 Decisive for me — besides the numbers we heard before —

16:00 is the new president of the the largest military power, the United States,

16:04 his inauguration and his suggested

16:08 politics. I have to say

16:12 I listen to the analysts,

16:16 and to the interpreters, or as I would say,

16:20 the devotees of the old paradigm, who always try to make us believe,

16:24 despite the fact we had Brexit, and we had an election of a new president of the European Parliament,

16:28 — with those election results — we had an Italian referendum, but nevertheless

16:32 they try to make us believe, “The porridge isn’t eaten as hot,”

16:36 that it is impossible to generate such changes as targeted by

16:40 the American president, or those we attribute to the American president.

16:44 I would like to bring to your attention: this is foolishness!

16:48 What IS,

16:52 is possible! This is true not only for China,

16:56 but true for the United States too. Naturally it is too early

17:00 to calibrate the place of all the change,

17:04 and its volume, what the character change

17:08 of the Western world will create.

17:12 I will caution myself and suggest that you do, too.

17:16 But I think we received one key sentence in the last week,

17:20 and we must understand that key sentence correctly, and if we do so,

17:24 and we could understand everything that lies ahead.

17:28 This key sentence is not what most often quoted, that

17:32 “America First”, but the next sentence which said:

17:36 “Any nation has the right

17:40 to place its own interests first.”

17:44 This is the big change! This sentence could not previously be heard

17:48 from the mouth of an American president. Now he has said it.

17:52 The age of unilateralism has ended and the era of bilateralism has arrived.

17:56 This is good news for us, because it is an unnatural

18:00 state, where someone, as result of external circumstances,

18:04 is afraid to state that he wants to place his homeland first, when

18:08 governing, or even considering some decision regarding the Central Bank.

18:12 This unnatural state of being is over. We received permission

18:16 — if you like — from the highest worldly office. We can now

18:20 also put ourselves in the first place. This is a great thing,

18:24 a great freedom, and it is a great gift. Respected ladies

18:28 and gentlemen. I am convinced that

18:32 a single pole / multiple poles concept

18:36 necessarily brings it with itself the fact

18:40 that while a single pole has a single model, multiple poles have multiple models.

18:44 In the world economy, this means

18:48 that with multilateral treaty systems,

18:52 it is very difficult to arrange multiple models together,

18:56 so it will open the door for bilateral agreements,

19:00 in military doctrines and economic policies also.

19:04 I am convinced there are no such general

19:08 economic policies that can be used uniformly.

19:12 Nations with different capabilities and in different positions

19:16 can make themselves equally successful. In reality

19:20 the world economy only grows — at least that is what I mean —

19:24 — that conclusion I draw from the presentation of the Chinese delegate —

19:28 today the only thing keeps up the growth of the world economy

19:32 is that multiple models exist.

19:36 There are different economic policies at work, because if the Chinese

19:40 wanted to imitate us [EU], the world economy would not

19:44 be not be at the level where it is today.

19:48 Consequently, we should welcome the rise of

19:52 the new poles or centers, instead of

19:56 looking at them as potential dangers. This is a key question, because

20:00 current Western leaders logically could think of this

20:04 as a loss of position and a source of risk.

20:08 But if we relate like this to the rise of multiple centers,

20:12 I am convinced we will doom ourselves to be unsuccessful.

20:16 The multi-center world brings opportunities.

20:20 Here is China, which we already talked about,

20:24 Which has shown it is not a comet, but a fixed star,

20:28 which will determine for decades,

20:32 the world economy. There is Russia,

20:36 — to bring an easy case forward,

20:40 to chat about an easy and safe topic —

20:44 Let’s talk straight! It survived the sanctions of the Western world,

20:48 isolationists and regime-change attempts.

20:52 The Russians survived low oil prices;

20:56 they survived the sanctions,

21:00 and the “non-governmental” NGO organizations,

21:04 “impartial” and “not externally influenced”

21:08 “demonstrations”. [SARCASM — translator] They survived it. They are still here.

21:12 For that reason it is not expedient, especially not in Europe,

21:16 to ignore the force presented by Russia,

21:20 and at the same time: opportunities.

21:24 Naturally this — if we can do it — means

21:28 we would need more European self-confidence, and

21:32 we should be able to honestly speak the sentence — but we do not say it,

21:36 because it is not true — that we Europeans, we can defend ourselves

21:40 militarily. Without any external help.

21:44 We are afraid to say this sentence, because it is not true!

21:48 I would like to return to this later,

21:52 referring to the speech of one of our lecturers.

21:56 We have good reason to welcome

22:00 the prospective new French President — we hope —

22:04 — sorry for intruding into French internal affairs! —

22:08 but the hopeful French candidate for President, nowadays, today or maybe tomorrow,

22:12 will visit Berlin, and based on the statement, they will discuss

22:16 the question of a common European defensive

22:20 alliance. Which could open the road

22:24 toward self confidence and later to the ability to negotiate

22:28 in every direction, which would include Russia, too.

22:32 We also talked about India, but that is not the reason we are here today.

22:36 India has significant reserves and it produces at the world-class level,

22:40 which areas in the next twenty years will have a strong effect

22:44 on the world economy. Respected ladies and gentlemen,

22:48 So new centers are rising and long forgotten

22:52 trade routes are being revived.

22:56 We must remember with the appropriate respect that in 2013 President Xi Jinping

23:00 started the “One Belt One Road” initiative,

23:04 which was the “first swallow” in that area.

23:08 I believe there will be others in the period ahead of us.

23:12 The second question that one

23:16 must touch in a presentation like this is how the situation in

23:20 Europe looks like from Central Europe.

23:24 The answer could be summed up in a single sentence: We cannot even recognize it!

23:28 … It struggles with four big crises

23:32 at the same time, and in recent times it has not been able to

23:36 reassuringly solve any of them,

23:40 it has a growth, or more precisely, competitiveness crisis,

23:44 a demographic crisis, a safety — public safety — terror crisis,

23:48 and it has a foreign policy

23:52 crisis, which is embodied in the fact that in areas which directly impact our lives,

23:56 we cannot exert any influence about the

24:00 events there. You can think of Syria or

24:04 even Ukraine. This is a foreign policy crisis.

24:08 Europe is drowning in debt. I think it is unnecessary to bring up the numbers;

24:12 you all know this numbers much better than I. every single day,

24:16 it increases by the approximately 1,000 million euro deficit generated by

24:20 the member states of the European Union.

24:24 Economic growth is slow as a snail,

24:28 as we also heard from Mr. Larosière.

24:32 in the last decade it barely exceeded

24:36 1%; the Eurozone has been under the 1% level.

24:40 Since 2008 from the existing employment market

24:44 around six million jobs have gone missing.

24:48 I can mostly hear the voices of resignation from

24:52 the experts, but even now from the decision-makers too,

24:56 that in the upcoming decade the growth will not

25:00 reach or exceed 1%, perhaps 2%.

25:04 Europe is no longer as safe a place as it was before.

25:08 Hundreds of thousands of people are living among us about whom we do not even know what they doing here,

25:12 why they came here and what exactly they want!

25:16 We must face the fact —

25:20 which could be an unfriendly sentence, but still represents the truth

25:24 — we must not imagine things that we would like to see,

25:28 but face reality and what reality sounds like,

25:32 where lot of migrant have settled in Europe,

25:36 in those places the crime rate immediately — not later — immediately increased.

25:40 We must reckon the consequences of that.

25:44 To sum it up: the European continent is getting weaker.

25:48 From a global actor it has become a regional one,

25:52 and even for that status it must fight now.

25:56 Respected ladies and

26:00 gentlemen, we can’t avoid

26:04 in such a presentation — especially

26:08 if we talk about the work of Lámfalussy and open-debate style democracies — asking

26:12 the question: How could this happen? How did we end up here?

26:16 … Many people, as many answers!

26:20 I do not have the need that anyone

26:24 accept my answer as the only correct decipherment,

26:28 I would like to only add to the debate on the topic.

26:32 I am convinced

26:36 Europe set great goals for itself,

26:40 but it could not realize any of them.

26:44 I was also prime minister in 1998, when we were preparing for the negotiations to join,

26:48 so I have that advantage or handicap,

26:52 I still remember to those negotiations with those prime ministers,

26:56 when [Jacques] Chirac and [Helmut] Kohl were sitting at those desks

27:00 together and we composed those big plans,

27:04 to make the euro one of the world’s

27:08 reserve currencies alongside the dollar; we failed in that.

27:12 We said, “We should create our own independent

27:16 European security policies, based on our own strength.”

27:20 We failed at that, too, and we had the goal

27:24 of making a single Eurasian economic zone — from Lisbon

27:28 to Vladivostok — there is no word about that today; we failed at that too!

27:32 This is not a general decline we are talking about here,

27:36 which would bring us into a boundless discussion about civilization.

27:40 But I am talking about concrete goals, which were never fulfilled,

27:44 when looking for reasons. My explanation is that Brussels

27:48 became a prisoner of a utopia. The name of the utopia is

27:52 a Supranational Europe!

27:56 And in the final period, it turned out to be an illusion.

28:00 There is no such thing as a European nation. There are European nations,

28:04 but there is no such thing as a European people.

28:08 And if there is no European people, no one can build on a non-existent

28:12 nation a whole system of institutions.

28:16 Then we must accept the facts: there are nations in Europe,

28:20 and for the politics of nations, their intentions, will and their willingness to cooperate

28:24 one must build on a pan-European system. We made a mistake with this.

28:28 This differentiation got lost in the final period.

28:32 Maybe the more experienced ones can confirm

28:36 my opinion that if we are looking for successful periods

28:40 on the European continent, we could say

28:44 that Europe was never strong, at least not permanently,

28:48 when it was directed from a single power center, but we were strong

28:52 when multiple centers of power existed within the continent, and now Brussels,

28:56 wants to convert these separate power centers into a single center.

29:00 Which provides the answer — I believe — to how

29:04 we got to the point where we are now.

29:08 After this, respected ladies and gentlemen,

29:12 finally, if all this is true, we must ask only one question:

29:16 How we can make Europe competitive again? Mr Larosière,

29:20 has previously given us an attractive… attractive

29:24 and grandiose answer to this question

29:28 Compared to him I try crawling on my belly — at the level of daily politics —

29:32 to give an answer. The first thing, I think,

29:36 to make Europe competitive again, is that

29:40 Europe must let go of the illusion of federalism.

29:44 We walked to the edge of the abyss,

29:48 and ran out of land under our feet. The fifth largest

29:52 economy of the world exited the Union;

29:56 if we continue this way, this process will continue.

30:00 So we must let go of the illusion

30:04 of federalism. From this it follows that Europe,

30:08 we must transform Europe into something having multiple poles.

30:12 If you construe, from this point of view, what the V4 is doing,

30:16 you can see we set this exact goal for ourselves.

30:20 The Visegrad countries as region wish to become one of those poles

30:24 inside the European union.

30:28 Strong, also competing with other regions of the Union,

30:32 and this way, adding in growing proportion

30:36 to the overall performance of Europe. We wish to become a growing region.

30:40 The other milepost on the road to competitiveness

30:44 is for we Europeans to enter into new type of cooperation.

30:48 First we should look for new agreements

30:52 with the USA, replacing the lame-duck

30:56 free trade agreements. Let’s not force the issue, that thing is dead!

31:00 It is no more! Maybe we do not need to throw out all the work of preparation,

31:04 but that treaty will never become reality.

31:08 We need something else instead; we should find that form of contract,

31:12 where Europe and US can make an agreement

31:16 with each other. We shall search and find,

31:20 look for common ground, and make

31:24 the contract with China too,

31:28 Pick up the question of Russia,

31:32 and try to get into the world race, which today is called

31:36 the contracting race, and we Europeans are continually

31:40 left out. …

31:44 I find it important, on the road to competitiveness,

31:48 to think through the financing

31:52 of the individual European national economies. Previously we heard

31:56 an excellent lecture here, which touched on this question.

32:00 I am convinced that if we do not have anything to invest, then

32:04 we can’t rev our economies up any higher.

32:08 Europe is in not too bad a situation from this point of view,

32:12 because there is a bank, a European bank, that understands

32:16 the correct direction. This bank is called EBRD [Bank for Reconstruction and Development].

32:20 It would be in our interests that the bank’s activities

32:24 would increase on the whole continent, but definitely in Central Europe.

32:28 And we are in a good position, because here are our friends the Bank of China,

32:32 who stood beside us and supported us in financing questions.

32:36 And the last discoverable milestone — at least by me —

32:40 on the road to competitiveness

32:44 is innovation. Let’s bring a greater

32:48 focus on innovation in Europe.

32:52 Let me note that, among the Central European countries, the Hungarian

32:56 percentage of GDP invested in innovation

33:00 puts it in an excellent position.

33:04 I think this is a laudable performance,

33:08 but still not enough, and we must increase the proportion of the amount

33:12 from the budget spent on innovation.

33:16 And now two important thoughts from Mr. Larosière,

33:20 I would like to connect

33:24 in my own simple way.

33:28 The first is the question of demography.

33:32 …

33:36 I will give a political answer for this,

33:40 of course, which differs in its characteristics from

33:44 an answer by an economist. My opinion is

33:48 that a nation or community that is not capable

33:52 of reproducing itself, does not deserve to exist.

33:56 and for those the judgement is

34:00 — in the highest place — declared. This is not something that can solved with tricks,

34:04 Nor can it be hidden. With colonization, migrants, guest workers…

34:08 Cunning is not possible, because the problem is deeper, if a community

34:12 is not capable of keeping itself up demographically,

34:16 does not believe in its own future and forfeits its right

34:20 to exist. This is the most serious issue we must face.

34:24 We Hungarians, too: our house is also on fire,

34:28 but the whole Europe as well. I am convinced that if

34:32 a nation is not capable of that, they can’t do it,

34:36 and are looking for help from the outside,

34:40 and solutions, that means that they partially or perhaps fully

34:44 have to give up their own national identity.

34:48 Then it is no longer the same nation as before. This is how it’s written in the Book of Faith.

34:52 at least as a politician, this is what I read in that book,

34:56 and I am convinced that we here in Europe must find a solution!

35:00 Because this is the question of being or not being, and Hungary has taken

35:04 some political steps vis-à-vis the family, which have had some

35:08 results, but still I must repeat: our house is on fire, too!

35:12 Concerning foreign policy… a common foreign policy,

35:16 Sorry… I would like to return for a moment to demography,

35:20 addressing this to Mr. Larosière, why I am so brave to give advice in this topic,

35:24 to organize my thoughts into such a definite sentence structure.

35:28 we are a nation with great deal of experience on the issue,

35:32 deportations, colonization, population exchange,

35:36 and the consequences of all of this, embedded in our

35:40 genetic code. We know exactly when such tools were applied,

35:44 for example, if I look at the Turkish occupation and the times afterward in Hungarian history,

35:48 we know exactly that this will lead the loss of the country and the nation.

35:52 This is why we are so determined to express our opinion in the matter,

35:56 in such a scientifically complex-sounding issue.

36:00 After all politics is a practical and not a theoretical genre.

36:04 Concerning European security policies and foreign policy,

36:08 what Mr President (Larosière) also suggested for us

36:12 a hard question, which we must address with Lámfalussy honesty,

36:16 which sounds like this: without America — or to phrase it more bravely,

36:20 without the Anglo-Saxons — can we save

36:24 the continent? From any, I repeat any,

36:28 external threat?

36:32 This is the big question of the future.

36:36 The key to the solution is a very simple one:

36:40 It’s called German-French security, military cooperation and a treaty,

36:44 A shared army, a shared security system,

36:48 call it what you will. This sounds very simple, but if you think about it, such a thing was never

36:52 attempted before. Which showcases excellently the simplicity and the difficulty of the solution.

36:56 If we are capable of that, or those affected are capable

37:00 of creating of such a defensive alliance,

37:04 the previously quoted negotiations will

37:08 shed some light. Respected ladies and gentlemen,

37:12 Finally, as I stand before you

37:16 as Prime Minister of Hungary, I have to say a couple of words about Hungary, too.

37:20 Primarily for the sake of our Chinese and French guests,

37:24 would like to say a couple of words. To them it might sounds strange,

37:28 for a country that only provides 0.2% of from the world’s population,

37:32 — that would be us — in such a grandiose way

37:36 to proclaim opinions on world political issues, and I understand

37:40 those aversions connected to this, because in politics

37:44 there is also this most important rule: that everyone must know their place.

37:48 Just like in private life. And a country

37:52 must know, based on its military power, its GDP, its population,

37:56 and its size, it must know its place.

38:00 When it knows its place, it knows when it can speak up and when it must shut up,

38:04 So it requires an explanation why, in such issues,

38:08 Hungary brings up its own ideas.

38:12 There is an English proverb which sounds a bit lame translated into Hungarian,

38:16 …

38:20 Nothing succeeds like success!

38:24 That is the explanation why the Hungarians are not afraid to

38:28 voice their opinion. Because of the period between 2010 and 2016

38:32 we can see that Hungary went from black sheep

38:36 to being a success story.

38:40 Of course this is not accepted by some.

38:44 But it is important that truth, that facts and truths,

38:48 must be acknowledged, even when it is favorable for the Hungarians.

38:52 For this… for this

38:56 I must remind everyone — testing your patience for another two minutes —

39:00 Of the fact that in 2010, we had no economic growth, almost nothing;

39:04 government debt was above 85%.

39:08 Inflation would not fall below under 6%.

39:12 The government deficit flew up to 7%, and the unemployment rate

39:16 was in the 11.5%-12% range.

39:20 Of ten million Hungarians less the 3.7 million

39:24 so three million and 700,000 were working,

39:28 and almost exactly half of them, 1 million 800,000, were paying taxes.

39:32 We had no income, but our expenditures were

39:36 predetermined because the government, the enterprises and families were all in debt.

39:40 It was no wonder that before Greece, it was Hungary that needed IMF financial aid first.

39:44 This where we started from.

39:48 Today we can say that debt as a proportion of GDP is decreasing,

39:52 the budget deficit is permanently under 2%,

39:56 around that. The economy is growing at around 3%

40:00 per year. And the unemployment rate is somewhere around 4.5%.

40:04 Close to full employment.

40:08 Our trade balance repeatedly closes with a large

40:12 surplus. This is when the question comes up,

40:16 How could this happen in the country,

40:20 How it was possible to execute a 180-degree turn?

40:24 Without giving unsolicited advice, we would like

40:28 to bring attention to some facts. First, it is political stability.

40:32 If it’s true that the starting point of good economic policies is politics,

40:36 stable politics, then political stability must be created.

40:40 There is no successful economic reform, no economic political change,

40:44 without political force and political stability. Political force

40:48 is not always a sympathetic thing, mostly in intellectual circles,

40:52 especially strongly disliked by the analysts, there are

40:56 politically badly trained financial actors, who think the room for maneuver is limited,

41:00 of the bank sector, but the truth is, whoever

41:04 wants a reliable business, always has a vested interest in a strong and reliable

41:08 politics, not to mention the 98% of the population

41:12 who are voters. The second important thing

41:16 that led to the success is strict fiscal policies,

41:20 which I only want

41:24 to say refers back to the lecture of Mr. Larosière.

41:28 They either accept it or not. The people must admit

41:32 that sometimes strict fiscal policies are necessary.

41:36 I say the people only accept strict fiscal policies,

41:40 when they think they are fair. This is a simple statement,

41:44 but a complex issue. The people accept

41:48 strict fiscal policies if they feel they are is fair to them.

41:52 In every country there is a different recipe for this.

41:56 In Hungary it started with cutting the political elite in half.

42:00 We did not introduce any strict fiscal rules, until we decreased their numbers by 50%,

42:04 halved the members of parliament, halved city councils. To mention just one. There are many others.

42:08 I just want to say, that a recovery based on strict fiscal policies

42:12 is possible, and politically manageable. That is all I want to say.

42:16 That is why I am standing here and that is why we did not lose the election in 2014,

42:20 after we restored the country’s fiscal stability, but won, so it is possible.

42:24 Not a simple thing, and it requires some unorthodox steps.

42:28 So the question of justice cannot be excluded from the question of fiscal responsibility,

42:32 from the circle of political questions. The third thing

42:36 that can explain the success of Hungary is the creation of the work-based society,

42:40 instead of the welfare state. Of course it is not my place to

42:44 bedevil you with it, but I would love to see Western society

42:48 — including France too — when the government announces that

42:52 the unemployment insurance will be limited to three months.

42:56 There is welfare after that, but public works, he who works will get paid;

43:00 whoever does not work will get nothing, good-bye, we wish you lot of success!

43:04 This sounds very brutal, for a Western brain it is almost incomprehensible.

43:08 But it is not far from being fair.

43:12 The Hungarian people thought that otherwise able-bodied people

43:16 should not kept on their, the people’s, tax money. The task of the state is to organize

43:20 that these people get paid for a job and do not live on welfare.

43:24 If the market can’t solve this then the state should temporarily introduce

43:28 some provisional, interim solutions, but the important thing

43:32 that everybody should feel, that their taxes go to the right places.

43:36 Because of that we could lower taxes — I don’t want to mention all here — but corporate taxes

43:40 are 9%, income tax is proportionate, we have

43:44 a single-key tax system, where the key is 15%.

43:48 The road to success, where we still fight a lot of battles,

43:52 is the building of the dual educational system.

43:56 The European school system, which was hijacked from reality, needs to be brought

44:00 back to real needs, so the students find out

44:04 that the knowledge we gave to the kids is beautiful, noble,

44:08 represents high value — in theory it should be this way,

44:12 but in reality it is utterly useless. European

44:16 universities and public schools suffer from this problem.

44:20 But this can only solved if we give up

44:24 the aristocratic intellectual attitude, and bring the material closer to market requirements.

44:28 Bring the whole school system to the oily, worker-smelling reality.

44:32 The success of the Germans, in a great part

44:36 can be explained by this.

44:40 So instead of welfare, we should be able to give the opportunity to work. Finally, part of the recipe,

44:44 part of the Hungarian model, is the question of our opening to the East.

44:48 After 2008 we saw that Europe can’t grow by itself,

44:52 if we only trade with each other and sell to each other, we will go nowhere,

44:56 if we do not open to the East, we will not have economic growth.

45:00 This sounds great, and simple, too, but from here to there is

45:04 something the Europeans must understand. If we want

45:08 to open up commercially to other countries in the East, like China, there is no way

45:12 that every morning we will lecture them about human rights. This will not fly!

45:16 So that kind of alliance — we need your market,

45:20 we want cooperation, we also expect financing from you,

45:24 and we do not give the level of respect which behooves you —

45:28 for every single independent nation in the world is untenable.

45:32 This type of “opening” only works rhetorically,

45:36 but not in reality. The key to open toward the East is respect.

45:40 If someone does not get this, if that respect comes on as ideology,

45:44 they will never be able to open, because they do not understand Easterners. We understand this,

45:48 because we are an Eastern nation that got vaccinated with Christianity.

45:52 Which gave us a specific point of view, and we understand

45:56 what is happening in China, just like we understand also

46:00 — because we talk about a disciplined state here — when they do not give an answer.

46:04 Right now about the critical voices coming from the Western world:

46:08 if instead we would acknowledge what performance by the masses

46:12 raised from despondency and poverty represents.

46:16 Also what China from a moral standpoint finds most valuable,

46:20 and as a primary argument brings to the table. If we can’t accept this, then

46:24 there is no Eastern opening, just a bit of marketeering going on.

46:28 Hungary wants to have a real opening to the East.

46:32 Respected ladies and gentlemen, the Hungarian model has four elements:

46:36 Political stability, strict fiscal policies, a work-based society,

46:40 and an Eastern opening — with needed modesty, but

46:44 with sufficient self-confidence, this is what we can offer to the world for consideration.