PM defends flat-rate taxation on radio

Prime Minister Viktor Orbán stressed the importance of preserving last year's tax cuts speaking about the government's 2012 budget bill in a radio interview early Friday.

Taxation of families, the proportional flat-rate tax system and the cut in corporate profit tax will all stay, Orbán said. The cardinal rule of the 2012 budget is that a single forint must not be spent that has not been earned, he added.

Speaking about decisions on the scale of Greek debt European banks will write off that was reached at a summit of European Union leaders in Brussels on Wednesday, Orbán said Hungary was in an easy position in the debate because of the extraordinarily good position of OTP Bank, Hungary's biggest commercial lender and the only Hungarian bank with a big foreign presence too.

Orbán defended the government's scheme allowing full early repayment of foreign currency-denominated mortgages at a discounted exchange rate. "If we think about the early repayment scheme in economic terms, rather than from the view of lining bankers' own pockets, then everybody agrees that reducing Hungary's foreign exchange exposure is good economic policy," he said. Bankers are not worried that the scheme will put them in trouble in Hungary, but that other countries will adopt the same policy, he added.

"I will not live in a country...where a million people must live in slavery to debt," Orbán said.