Hungary has fought its most difficult and most risky campaign, and few thought there was life without the IMF, but “we did it and we did it well, on our own path, and we can reduce our state debt at our own pace,” Matolcsy said.
The fight with the IMF was a “battle of life and death”, he said. With the IMF, Hungary could not have introduced the bank levy, crisis taxes or continued the reform of the pension system, he added.
The IMF led a €20 billion assistance package to the country at the height of the crisis late in 2008. Hungary returned to full market financing in the autumn of 2009 and Prime Minister Viktor Orbán announced in the summer of 2010 that the country would not renew its standby arrangement with the IMF.
The implementation of the Széll Kálmán plan, a structural reform program the government introduced in March, will reduce Hungary’s state debt from over 80% of GDP at present to 65-70% by the end of 2014 and could bring it to 50% by 2018, Matolcsy said. Writing a 50%-of-GDP cap on state debt into the new constitution gives Hungary “economic freedom” and is a “guarantee of financial independence”, he added.
Just 40 countries have reduced their level of state debt over the past ten years, while Hungary was among the 20 countries whose state debt grew the fastest, Matolcsy said. In the next ten years, some 30 countries will be able to reduce their state debt, and, if the Széll Kálmán plan is implemented, Hungary will be among the top ten, he added.
Civil participation in reducing Hungary’s state debt is a further defense, he said, referring to a fund called “Unite Against State Debt” established on the initiative of a catholic priest in April.
Father Elemer Rédly, whose parish is in Győr, told the meeting that his idea for the fund was not political. The offerings of ordinary people could start a moral renewal, without which an economic reorientation will not be successful, he added.
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