European welfare state has no future, says Orban

Berlin, October 11 (MTI) – The welfare state “Europe has got accustomed to” has no future, Hungarian Prime Minister Viktor Orban told German business daily Handelsblatt, in an interview released on Thursday, ahead of his talks with German Chancellor Angela Merkel.

In the interview, the prime minister said that he thought a presidential system was more suited to implement difficult reforms than a parliamentary one.


“What Europe needs is a true renewal; it is not enough to economise for a few years and then pick up the old ways before the crisis again,” said Orban, and argued that the welfare-basis of European systems should be replaced with labour.


Orban said he was devoted to democracy, but also referred to issues around political leadership. “Let me ask the question if leadership structures of democracies are still appropriate” in countries of western and southern Europe, he said. He insisted that weak leadership was an inherent problem of current systems, an issue which must not be handled as taboo. “A presidental system is probably better for handling tough reforms than a parliamentary system,” he said.


In the next five years the crisis will not be over, and Europe will be debating whether an American-type presidential system should be introduced, Orban said. He argued that EU members cannot reduce their state debts without external assistance, and “the longer the (economic) crisis, the greater the need for strong political leadership”.


Orban said the talks with Merkel would focus on the future of Europe, focussing on three topics.


These are the planned bank union and a joint bank supervisory, which Hungary considers “too fast” and would not rush with its adoption, tax harmonisation plans, which it does not support, but favours tax competition instead, and the next seven-year financial framework, which must be approved before the end of the year, he said.


On the subject of Hungary’s finances, Orban said he wanted to reduce the state debt to below 50 percent of GDP, but added that the success of the government’s efforts were also dependent on the euro-crisis.


To a question why the Hungarian economy was lagging behind other European countries, Orban said that “45 years of communism has destroyed the economy” and “we had to start all over again”. He insisted that the flexibility of the labour market should be increased so that “for people at the bottom it is worth taking a job”.


The prime minister said Hungary should be made a production centre rather than a service provider. He said the services sector was important “but we cannot build a future on that basis”.


Referring to energy, Orban spoke about opportunities in geo-thermic energy, and stressed that Hungary must be freed from its dependency on Russian natural gas supplies. Concerning the planned Nabucco gas pipeline he said that “it is not that Hungary is not interested in Nabucco; on the contrary: Nabucco is not interested in the country”.


Talking about Hungary’s talks with the International Monetary Fund, Orban said Hungary needed a loan from the IMF/EU, because “the whole world thinks we need it”. The loan is “not at all so important for us”, he said, but admitted that a precautionary loan agreement could reduce Hungary’s high financing costs.


Orban told the paper that the euro-zone crisis meant Hungary should no longer be expected to join the single currency automatically simply because it was a member of the European Union.


“At the time we signed the accession treaty, the euro zone was a very different place. An obligation to join the currency union cannot therefore be automatic,” he said.


At present, an introduction of the euro would even be “irresponsible,” Orban said, adding that Hungary did not want to make the same mistake as southern European states that had adopted the euro too soon.


“They weren’t yet ready for it. We’re not going to make that mistake,” he said.


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