Back in the ring

What compelled you to return so prominently to politics?

It is quite simple: contrary to its electoral promise made in 2010, the Fidesz government has abolished constitutional democracy, destroyed the rule of law and returned to authoritarian rule. In addition, it is fighting against European institutions, which is a clear indication that it does not share the basic values and principles of the Union. Last but not least, the economic and social policy of the new regime is irrational and dishonest. It does enormous harm to the Hungarian economy and social cohesion. No surprise, therefore, that Hungary has been diverging not only from Western Europe but falling behind Poland, Czech Republic and even Slovakia. This quite obsolete form of government is anti-modern and may deviate Hungary from the mainstream development of Western Europe for another century. Our new party, Movement for a Modern Hungary intends to lead the country back onto the road of modernization.

Where do you see your new party in the political landscape?

We have a unique worldview. It is based on four important values: upholding an inclusive interpretation of what the Hungarian nation is, sharing fully the European principles of human rights and democracy, believing in the primacy of the market economy over administrative state intervention, and promoting freedom and human dignity in societal and cultural life. There is no party in Hungary that would embrace all these values at the same time. All parties represented in parliament today are suspicious of the market and support excessive state intervention. All parties are socialists in terms of their economic policy. They all believe in state ownership and government orchestrated societal engineering. We are the only conservative and liberal formation in the political landscape.

What kind of result can you realistically aim for at the 2014 elections? Which group of voters are you targeting?

We target all those voters who realize that economic growth and societal welfare are created primarily by dynamic entrepreneurs and skilled workers in society, and not by the state. We call upon those individuals who believe in free markets, free trade and open society. We invite all people who wish to restore human dignity and are now fed up with the loss of constitutional democracy, with institutionalized fear, corruption and blatant expropriation of the fruits of human energy, which is used now for cementing the power of a parasitic oligarchic order.

You rose to “infamy” during your time as finance minister for the set of austerity measures that were implemented in your term, that are now widely considered a “necessary evil” of the time. Do you see the need for similar steps now?

The situation is very different today. There is no need for austerity measures in addition to what has already been implemented by the government in the last three years. We need, however, much more fundamental changes because the present economic and social policy is completely inconsistent even with its own stated goals. First, a new democratic government will be well advised to restore trust and confidence in the market by designing and implementing a rational, honest, stable and predictable economic policy. Second, it has to eliminate all excessive state intervention in the economy. Third, all distortive and predatory taxes introduced by the Fidesz government in banking, telecom, public utilities, retail trade, etc. should be immediately abolished. Newly created monopolies in retail trade for tobacco, the unbearable burden being put on taxicab owners have to be eliminated. Financial savings and productive investments must be stimulated. Fourth, fundamental structural reforms are in need for creating a meaner and leaner, more effective and efficient state. Education, health care, the pension system, taxation and all levels of public administration require comprehensive modernization in order to improve the quality, equal access and financial sustainability of public services.

Do you now, in retrospect, agree with the decisions you made then and that those measures were indeed necessary?    

Absolutely. Those measures were very successful not only in saving Hungary from fiscal collapse but also in restarting export-led and fiscally sustainable growth based on productive investments undertaken by the private sector. From 1996 through 2001 Hungary enjoyed high rates of economic growth without putting financial equilibrium in jeopardy. Public debt was reduced from 80% of GDP to 53%. External deficit was financed by foreign investments, direct and portfolio alike. It was an unprecedented period of sustainable economic recovery and convergence praised by the IMF as well.

If you were to be in a position of government after the next elections, which cabinet post would you prefer?

It is too early to speculate on government positions. The democratic opposition needs to win the next elections.

What would be the top priorities, the most important measures that you see need to be enacted by the next government?

If the democratic opposition wins the elections it should try to restore the rule of law immediately. That needs fundamental changes in the basic law enacted and changed by Fidesz four times in 15 months already. Once a minimum degree of constitutionality is restored, e.g. the judiciary, the central bank, the Constitutional Court, the Competition Office, the State Audit Office, the Prosecutor General, etc regain their independence, the government should eliminate all monopolies and distortions which put the Hungarian economy into a suffocating straitjacket and sucked all energy out of free and honest entrepreneurial activity. The government of the democratic opposition will need to attract and encourage investors, foreign and domestic alike, to put their faith in the future of Hungary by undertaking new investments and creating sustainable, well-paying jobs.  

You were a minister under a socialist government then won a seat in Brussels with the support of a conservative party and now you have a political formation of your own. Aren’t you worried about how your political history may affect your credibility and what the voters’ response may be?

Not at all; I vividly remember that the stabilization measures implemented by the government 17 years ago were dismissed by Fidesz, at that time in opposition, as ruthlessly conservative, even Thatcherite. I was proud of this label then and I am still proud of it now. I did not change at all. Looking for a turncoat, you had better have in mind the present ruling party and its government. It is truly amazing how Fidesz has turned over time from a youthful liberal, atheist and globalist bunch into a baroque caricature of a populist and nationalist, inward-looking creature with a wildly obsolete ideology of authoritarian state capitalism.

What is your biggest critique of the economic policies pursued in Hungary in the past ten years?

I am glad that you ask this question. Even before the Socialists won the elections in 2002, I was the first to warn them against continuing the irresponsible policy of fiscal overspending which had been started by the first Fidesz regime in 2001. The socialist candidate for prime minister, Mr. Péter Medgyessy, sent me a stern message to shut up. I was openly, stubbornly and consistently against the excessive public sector wage and pension increases and the reckless mortgage lending financed by foreign borrowing, pursued by all governments up until 2009. It was absolutely clear that it would lead to unsustainable levels of public and private debt. When I wrote a long article against the same irresponsible policies of Mr. Ferenc Gyurcsány, the next Socialist prime minister, he labeled me a heartless and narrow-minded fiscal hawk. When the global crisis struck, his government was obliged to ask for financial help from the EU and the IMF in order to avoid fiscal collapse.

This chain of events proves at least two things. First, all governments in the last 12 years, with the notable exception of that of Gordon Bajnai, pursued the same harmful policies of fiscal overspending which reduced considerably the long-term growth potential of the Hungarian economy and increased excessively the tax burden for future generations. Second, those who kept upholding the values of fiscal discipline and structural reforms have been repeatedly subjected to ferocious attacks from shortsighted, populist politicians. Nothing has changed in this regard in the last three years. I am convinced that the Hungarian people will see the difference and in the next elections will vote for honest politicians who have sufficient knowledge, proven skills and global experience in crisis management and are able to lead our country back to the road of modernization, convergence and prosperity.

Lajos Bokros biography

Bokros came to national renown for his stint as finance minister during Gyula Horn’s government in the 1990s. His term is best remembered for the package of economic austerity measures that have been fused to his name and caused extensive protests throughout the country. Before founding MoMa he won a seat in the European Parliament with the support of the conservative MDF. Besides his political role he is professor of economics and public policy at the Central European University in Budapest and professor of economics and international finance at the Babes-Bolyai University is Cluj-Napoca