Spar will "pay the price" for its actions in Hungary - minister

Since 2008, one approach in the world is that we need more globalisation, and another is that we need more sovereignty, more local decisions. The question is: what is the relationship between political sovereignty and economic sovereignty?

We live in an era of economic cooperation, borders cannot and should not be closed, economic sovereignty cannot mean closure, but economic sovereignty cannot exist without political sovereignty, said Lázár.

Our objective is for Hungary to become a key state by strengthening its sovereignty. South of the Carpathians, Hungary must be the strongest and most attractive country, both logistically and politically. This requires a strong economy alongside a strong government.

The strategy is not to develop a little bit of everything, but to develop priority industries in a substantial way.

Automotive industry

The key issue here is the automotive sector, which is also very important in terms of GDP. Motorisation and mobilisation will dominate the first half of the 21st century. In the future there will be two types of cars, the expensive and the cheap. [China's] BYD, for example, is building its annual capacity to sell 4.4 million cars worldwide. This will enable it to beat everyone in the mid-segment. But Hungary, with Audi, BMW and Mercedes, also makes expensive, top-end cars.

Hungary needs to produce both cheap and expensive cars.

Every year, there are two million new millionaires in the world who choose a car from the top end of the range. The country could also gain a big advantage in the adoption of electromobility. Electric cars are set to gain ground over the next 30 years.

Defence industry

Another issue is the defence industry, which has been given a prominent role because of the Russian-Ukrainian war. The armament of European countries will define the next 20 years with NATO and beyond. Let there be a Hungarian military industrial capacity that can even produce abroad.

Food industry

The third priority axis is the food industry. Covid has demonstrated that food problems can arise when a country needs to resolve its own food supply. Hungary is able to produce food ingredients for 20 million people, even though we still consume a lot of imports.

A food company that does not show respect to the government cannot stay in Hungary, the Minister said, sending a message to Spar.

Now that the Austrian grocer Spar has behaved in this way, I have suggested to the government that we should stop tolerating lies and unfounded allegations from them and buy them, the whole shebang.

Imagine what would happen if a Hungarian food company dominated the Austrian market? Europe's industry is 40-50% dominated by German and French companies, we don't have to accept that. They should not be pushed out, but forced to behave fairly in the market, he added.

The retail chain must be made to "respect the people, the consumers, the government, the country where they make huge extra profits."

Further goals

In addition to these three, there are other industries in which the government also intends to invest heavily in the future. These include the energy industry and the construction of Paks II, which is necessary to ensure that Hungarian energy and industry can remain competitive. Supplying the country with cheap energy is a question of its competitiveness.

For mobility, it is essential that transport goes through us. We need to build more motorways and railways to move traffic through Hungary. State revenue from road use is HUF 600 billion, which will soon rise to HUF 1,000-1,200 billion. Roads maintenance has a budget of HUF 100 billion, so there is plenty of money to be made.

Hungary must be the meeting point of the Eastern and Western economies. The EU is steadily losing economic strength to America and China.

Next is the construction sector, which we could keep in Hungarian hands in the long term, where 8 out of the 10 largest companies are Hungarian-owned. Between 2010 and 2022, the construction sector was recapitalised by Hungarian-owned companies, which has now been completed.

We need more Lőrinc Mészáros' and László Szíjjs, not less, the minister said.

(Mészáros is now the country's richest person, formerly a gas fitter in Prime Minister Viktor Orbán's hometown. Szíjj is a partner of Mészáros in the construction business, also linked to the ruling Fidesz party and a regular winner of giant public procurement tenders.)

Due to the energy crisis, soaring inflation and a shortage of financial resources, a whole new world dawned on the construction industry. Order rates declined, and rising energy prices and inflation have hit this sector the hardest. The government's task is to bring capital into the country from both the West and the East.

The years 2025-2027 will be the years of factory construction in Hungary.

But the question is whether the Hungarian construction industry has the capital and credit to do so. We should try to allocate factory construction to the Hungarian construction industry. This will also require state support, as will a reduction in interest rates.

The state has a major role not only as a supporter, but also as a customer. The government's primary objective is to reduce the budget deficit, which means rescheduling or postponing investments. Now, in addition to the HUF 5,500 billion already spent, there could be a further rescheduling to rationalise investment spending.

Finance Minister Mihály Varga said earlier this week that the budget for this year is being amended and plans for next year are under way. This year's budget was drafted last spring, with a deficit target of 2.9% of GDP, which Varga said would be replaced by a target of 4.5%, which should be lowered to 3.7% next year and to 2.9% in 2026.

We cannot hope to see a meaningful upturn in public investment in 2024, but there will be a lot of planning commissions, because we want strong economic growth in 2025-26, which is unthinkable without investment.

We have many programmes and development ideas, the question is how we can create the capital for them. But the regulatory capacity is there, and we have managed to change the whole way the construction industry and other areas operate. Two pieces of legislation have been adopted.

We want to introduce a completely new system for public investment.

More rational investment is needed, planning and execution cannot be managed by a single actor, and public investment cannot start without a plan, for example. Investment framework programmes must be established and a 10-year transparent development plan is needed.

We want more competition, so that quality rather than quantity dominates public investment.

A system is planned where it is made clear what exactly money is being spent on during an investment. The profits may reflect Western European standards, I can't guarantee extra profit because there is nothing to generate it from.

I want to shift the whole system towards quality, protecting the public interest. The aim is to build better products after recapitalisation.

Anyone who wants to build anything in Hungary will now be working under a new set of rules to make the country a much better place, a nicer, more liveable, greener environment, with much higher use of domestic resources. We also want to involve domestic organisations in shaping this.

Cover photo: Portfolio