June 14th, 2012

Orbán says loan-driven growth ruins nations

Growth and prosperity established on credit and debt ruin the nation, Prime Minister Viktor Orban said at a forum in Budapest on Wednesday.

“This path can no longer be followed,” Mr Orban said at the forum on business and investment in Kosovo.

Mr Orban attributed the unsuccessful management of the crisis in Europe to European leaders’ reactionary response to markets. “This must change,” he added.

Hungary was earlier seized by the false illusion that there can be economic growth without work, that money will always be cheap and that one must not fret about raising state debt. We must learn from these mistakes and think differently, he added.

The fight against state debt must be undertaken without compromise, and the budget deficit must be kept under control, he said.

Mr Orban said that the reliance on external financing should not prevent the state from following its own specially-tailored economic policy. This naturally does not mean that Hungary can sustain itself without external financing, but it is important that that money come from as many sources as possible, such as from domestic savings, from financial taxes, from the International Monetary Fund and from partners in the East, he added.

He noted that if internal savings were not in optimal proportion to dependence on external financing, the country could not follow a sovereign economic policy.


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