It is clear that union representatives still remember what it was like in 2010 when the collapse of the economy was on the agenda, he added. The agreement is based on Hungarians putting in work in terms of both quantity and quality. Instead of trying to find loopholes or living on benefits they have chosen a life based on work, Orbán said.

In response to a question about whether the wage deal represents the start of a process to narrow the wage gap between Hungary and the European Union, he said he never considered EU wages a reference point. Even if some experts and politicians “keep drawing comparisons with wages in other member states”, such comparisons reveal very little, he added. It is only partially true that many Hungarians are drawn abroad due to higher pay.

Since Hungary became a member of the common labour market, “people will always come and go here too”, he said. Orbán said young people cannot and should not be held back.

Those who have the courage to go and explore the world should do so. But they should always have a country they can return to, he said. It is impossible to see everything in forint terms because peace and safety, GMO-free production and a lack of migrants in Hungary are immeasurably valuable.

“When in a few years’ time health maintenance investments are brought to fruition and cycle paths and other recreational investments are completed, our country will be among countries offering the highest standard of living,” he said. Orbán said the most important measure of the government’s success was whether the working classes would have an opportunity to enter the middle class.

Hungary’s competitive advantage is not based on low wages, he said. Pay was held down due to a lack of economic growth and efficiency.

Competitive wages require competitive companies, he added. “It is not only a historical but also an economic fact that Hungary is a thousand-year-old state with forms of government that were always in the mainstream of the western world, except for the communist experimental period. We are in the heart of Europe, so not only do the paths of wars cross us but also trade routes.

The government must take advantage of this by, for example, developing infrastructure,” he said. Hungary’s competitiveness could be enhanced by providing electricity to economic players at a discount to other western European states, he said, adding that this is why he was dedicated to supporting upgrading Paks nuclear power plant.

Orbán also said the Visegrad Group’s prestige is growing within the European Union. He noted that the real value of pensions had been maintained and then increased. Whereas the pension system cannot be stretched any further, the cost of living will be reduced through cuts to VAT, and the new wage deal will enable an increase in the value of pensions from 0.9% to 1.6% next year, he said.

Orbán said slashing personal income tax rate to 9% had long been an issue “close to my heart” but this was not yet possible. “We intend to do it but implementation depends on performance in the years to come,” he said.

Republished with permission of Hungary Matters, MTI’s daily newsletter.

MTI photo