Hungary’s Prime Minister Viktor Orbán has spoken first about the Ukraine crisis and war in an interview with public radio MR1 on Friday. He said the situation was very serious and that it could have escalated into a much larger war. Then he has addressed the problem of what he calls “economic immigration", the settling of differences with local banks and the future of the advertising tax. He said the cabinet cannot give up revenues from this particular levy.
This is war
The situation in Ukraine remains fragile, we are facing a real war, there is one hope to respect the ceasefire agreement, Orbán commented on the deal reached in Minsk on Thursday. He said this was a frozen conflict, a war between Russia and Ukraine. So the question now is whether war or peace - I’m in favour of peace, he stressed.
Everybody was happy with the Minsk agreement at the European Union summit on Thursday, Orbán said. He thanked the heads of Germany and France for their efforts.
They have not addressed sanctions against Russia at the Brussels meeting. This is good for Hungary, he added.
Regarding Russia and President Vladimir Putin he said the following:
Hungary has national interests in connection with Russia
there are emotional tensions in Hungarians about Russians
he never had any doubt whether he will invite Russian President Vladimir Putin to Budapest or not
the Russian President will continue to be welcomed in Hungary in the future.
Hungary needs sound relationships with Russia,
but also with another main power, Germany.
He has also mentioned he will travel to Kiev, Ukraine later today.
The leaders of Ukraine, Russia, France and Germany have reached an agreement on the Ukraine crisis on Thursday, which was also signed by pro-Russian separatists.
Among other things the parties agreed on an immediate and full ceasefire in particular districts of Donetsk and Luhansk Oblasts of Ukraine and its strict fulfilment as of 00.00 midnight (Kiev time) on Feb. 15, 2015. They also agreed on the pull-out of all heavy weapons by both sides to equal distance with the aim of creation of a security zone on minimum 50 kilometres apart for artillery of 100mm calibre or more, and a security zone of 70km for Multiple Rocket Launching Systems (MLRS) and 140 kilometres for MLRS “Tornado-S", “Uragan", “Smerch" and tactical missile systems “Tochka-U". You can read more details here or here.
Long-term gas supply agreement
Orbán noted that Russians link the price of natural gas to the price of oil and how oil prices will change cannot be predicted.
“In this respect we should not even sign a long-term gas supply deal, but in the meantime we need gas. This deal is an inheritance, with all its advantages and disadvantages."
Hungary’s Prime Minister Viktor Orbán arrives to the studio of public radio MR1 (Kossuth) for an interview on on 13 February 2015.
Banks
Asked how it felt to smoke from the peace pipe with the banks after battling with them for years, the PM responded that the Hungarian government has achieved its objective and signed the agreement with the banks and the EBRD content.
He said their fundamental stance was that it could not be without consequences what the banks had been doing with millions of families. Now we are already past the era of foreign currency loans, he stressed.
“We said we did not want the Hungarian banking system to be in foreign hands. Because if a crisis breaks out, they immediately turn into Austrian and French banks and they will transfer their capital home. That is why it is important to have the [local] banking sector in Hungarian ownership, but not in state ownership," Orbán explained.
It was also condition to the agreement that the crisis was over and the banks had a role in solving the crisis, even if they had not undertaken this duty on their own accord, he added.
Orbán announced on Monday that the cabinet had preliminarily agreed to acquire a minority stake of up to 15% in Erste Bank Hungary Zrt. Moody’s Investor Service said on Thursday that these measures are "credit positive for Hungarian banks because they will improve banks’ profitability, asset quality and capitalisation, and investors’ confidence in the banking system."
Societe Generale had a different view on the matter and said this is only "part of a broader nationalistic move to reverse market liberalization and restore several key industries back into state hands."
Arnaud Louis, Fitch Ratings' lead analyst on Hungary, was also sceptical
"One key policy would be to reduce this tax on the banking sector and that I think would be positive for our assessment," Reuters cited Arnaud Louis as telling reporters in Warsaw.
"But I would really like to wait and see what is going to happen. Because there have been some announcements in the past and we have learnt to be cautious with Hungary."
There is a need for the advertising tax and the revenues that it generates; we cannot lose this revenue. All other factors, e.g. how large is its rate, etc. are technical issues, Orbán said.
He noted that in his view these technical issues may be and should be subject to discussions, adding that several negotiations are in progress already.
The advertising tax is a business matter therefore a crucial financial issue for the private investors. He said he is not concerned with the reactions given to the advertising tax, nor with the disputes about it. He said it is secondary for him who reacts how to the levy and how they do not want to pay it.
As regards an increased wave of refugees Orbán reminded that the government will start a national consultation, asking people “if the police can detain those who cross the border illegally".
Answering the question for those who could not decide for themselves, Orbán stated that, in his view, those crossing the border illegally, regardless of their motives, should be detained immediately.
This issue needs to be resolved jointly with the EU, he said, adding that he will advocate tighter rules in Brussels and put pressure on the EU in this respect. Once the national consultation gives Hungary the authority he will be able to enforce such tighter rules, the PM added.
Current European regulations are unreasonable and offer an invitation to [illegally] cross borders. Therefore economic immigrants need to be taken into custody at all cost, he underlined. But presently we cannot do that therefore a lot of them move on. But this still costs the state several billions of forints.
He projected that “the Austrians and the Germans will change, tighten their rules agains immigrants. Consequently, refugees coming to Hungary will not be able to move on and they will be stuck here. If we don’t have laws by then that we can immediately detain and deport them, Hungary will turn into a refugee camp."
The solution is in robust action, making sure that if they come over here, they will be detained and they will have to work for their subsistence and then they will realise it is not worth coming here, Orbán added.
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