Report about error

Jorge Marcano | The Lithuania Tribune

Hungarian Ambassador, His Excellency Mr. Zoltan Pecze

The Lithuania Tribune had the unique opportunity to interview the Hungarian Ambassador to Lithuania, His Excellency Mr. Zoltan Pecze to discuss several issues about the current bilateral cooperation between our country and Hungary.

Through a light-hearted, cordial and humorous exchange, Ambassador Zoltan Pecze gave us an insight on the current state of Hungarian economics, its regional role within Central Europe, its culture and personal aspects about his Ambassadorial tenure in Lithuania that will undoubtedly provide the reader with an extraordinary opportunity to learn more about Hungary – a manufacturing powerhouse and a high-income economy which receives millions of tourists every year due to its many cultural and architectural attractions.

Hungary, a member of the European Union (EU) is a country, which at various points in its history was regarded as one of the cultural centres of the Western World. At the end of World War I, the country lost approximately 70% of its territory along with almost 1/3 of its ethnic Hungarian population. After decades of socialist governments, the country reformed itself, joining NATO and the EU, whilst battling today the economic malaises derived from the financial and debt crisis in Europe. In this framework, our interview with the Ambassador reveals significant and relevant trends in his society, both culturally and politically.

Lithuania Tribune (LT): What aspects of the Lithuanian-Hungarian relationships do you consider as priorities?

Ambassador Pecze (AP): EU issues are in the focus of our cooperation such as the Multiannual Financial Framework for 2014-2020, cohesion funds, Common Agricultural Policy. Both of our countries are smaller new member states of the EU and our per capita GDP is less than the EU average. Therefore the common interests are obvious.

LT: As an ambassador, what are your main goals during your tenure in Lithuania?

AP: I would underline two main goals, first the cooperation in EU matters with the government, second the promotion of Hungary, Hungarian culture, Hungarian music, Hungarian cuisine and wine in Lithuania.

LT: Hungary and Lithuania have been members of the EU since 2004. How does Budapest evaluate its trading relationship? Can it do more?

AP: The Hungarian economy is extremely integrated into the EU market. More than 80% of our exports go to the EU. The biggest part goes to Germany and it is not bad, we are happy that our export is very strong to Germany, but that makes Hungary highly dependent on the Euro zone. Therefore opening up to markets east of the EU, such as Central Asia, are one of the priorities of today’s government. The Baltic market is a small but interesting market for Hungary. In 2011 the Hungarian export to Lithuania was EUR 185.4 Million, the import was EUR 69.0 Million, thus the Hungarian trade surplus was EUR 116.4 Million. The main problem is transportation, especially because of the relatively underdeveloped infrastructure between Warsaw and Vilnius. There is no highway, no train, no direct flights between Budapest and Vilnius. For a Hungarian small or mid-sized company the Baltic States are a bit too far. It takes two days to send something here on road. In Hungary we have an almost complete highway network in all directions, no wonder that currently the trade with our neighbours – especially with Slovakia and Romania – is growing explosively.

LT: During the Prime Minister’s visit to Vilnius, he said he wanted to learn from the Lithuanian experience in terms of debt reduction, could you comment on this?

AP: Prime Minister Viktor Orbán’s number one economic policy priority is cutting government debt. He made this comment in Lithuania because he wanted to send a message to the Hungarian public. The average Hungarians still do not really understand what government debt means. People think, it is the government’s problem, when it is in fact the debt of the people. In Southern Europe people have started to learn that. In 2002, when Orbán lost the elections, he left a debt of about 54% of the GDP, so it was well below the Maastricht Criteria. In 2002 the official target-date of the introduction of the Euro in Hungary was 2006, independent experts said it would have been possible to adopt Euro in 2007. But in 2002 Socialists and Liberals won the elections with the famous – or infamous – “One Hundred Days Programme” which introduced the 13th month pension and increased public sector wages. After the first 100 days of the Social-Liberal government the Euro was out of reach for the country. Eight years later in 2010, when Orbán returned to government, the national debt reached 82% of the GDP. This debt determines the Hungarian economic policy and, to a great extent, the foreign policy. All our conflicts came from the fact the government wants to reduce the debt very aggressively.

LT: Hungary has a centre-right pro-family government that has been under frequent attacks in the Western media. With a democratically elected two thirds majority in the parliament and a new Constitution, which replaced the Communist one, why do you think these media attacks continue?

AP: Referring to the media attacks abroad, I would mention two main reasons: one is that the Hungarian Government hurt huge financial interests by the policy of burden sharing. The policy of Orbán’s government is that not only the people must pay, but also companies, including foreign companies, must pay in order to balance the budget. The banking, retail, telecommunication and energy sectors were taxed, this was the so called “crisis-tax”. These big multinational companies have extremely strong lobbyists in Europe, and some are financially linked to international media groups as well. It is interesting that the toughest political attacks came from the press of those countries, whose multinational companies were taxed in Hungary. It is not the first time in history when politics and financial interests are linked. On the other hand, the majority of journalists are culturally leftist or left-liberals, most of them do not like family values and similar things. We are attacked because we are culturally conservative and because of the unusual and new taxation of big companies. Paradoxically the traditional European leftist and the green parties should support the taxation of big companies, but because of the cultural conservatism of the Hungarian government these parties are very critical as well.

LT: Do you think that maybe the misunderstanding has to do with the radical right-wing party, Jobbik?

AP: No, I do not think so. If someone writes on a country, he or she should be aware of the basic facts. Jobbik is in the opposition. The government does not depend on Jobbik, because Fidesz has two-thirds majority alone. Almost every Western European country has a radical right-wing party similar to the Hungarian Jobbik, which is in fact less radical than some of the anti-immigrant parties of the West. I have to repeat that the main point is money. As a result of the so called “crisis-tax” huge amount of money were taken from banks and other companies. It must be emphasised that productive, manufacturing companies, such as car-factories were not “crisis-taxed.” Banks, big retail-chains, telecommunication and energy companies were taxed, which made very nice profit during the past 20 years in Hungary, because they were able to monopolize the market. Eastern Europe is the most lucrative market for many multinationals.

LT: To conclude the point on the media, how do you evaluate Hungary’s treatment in the Lithuanian media?

AP: Writing on other countries, most of the media outlets in Lithuania just publish the translation of news and articles which have been published by big Western media groups, BBC, Reuters and CNN. This is valid for most of the media throughout the World. One can read the same articles, same sentences published in Taipei, Ottawa or Canberra. But some Lithuanian newspapers, especially Respublika, supported the conservative values of the Hungarian government. Lietuvos Žinios was very kind publishing my answer to their article which was the translation of an article of the German Der Spiegel magazine. The media coverage of the visit of the Hungarian Prime Minister in September was balanced and fair.

Ambassador Pecze highlighted Hungarian economic trends in Europe

LT: During the Prime Minister Viktor Orbán’s visit to Vilnius, there were talks about the establishment of Lithuanian-Hungarian Forum, could you give us some details?

AP: This is a forum of experts and intellectuals organized by the Hungarian Institute of International Affairs and its Lithuanian counterpart. The Forum shall meet once a year, first in Vilnius, then in Budapest. European issues relevant to both countries will be discussed. Energy security, demography and family values were on the agenda of the first meeting.

LT: There was also an agreement on youth cooperation?

AP: Yes, the “Stephan Báthory Fund” has been established to sponsor the youth exchange programmes “from thirteen to thirty year-olds”.

LT: What are your views on Turkey joining the EU? Do you think it will happen in the next 15 years?

AP: Hungary supports Turkey’s accession to the European Union, but we know that some member states are against it. Today EU is focusing on the management of the Euro-crisis and the institutional implication of the crisis management, this makes enlargement more complicated.

LT: Considering Hungarian borders, would you say that the integration of Croatia and the Balkans into the EU is a positive trend?

AP: Of course, Hungary was one of the most vocal supporter of Croatia’s accession to the EU. Actually, the accession negotiations had been completed during the Hungarian EU presidency in 2011. The Poles were lucky because the signature happened during their presidency term. And we are the main supporter of Serbia’s EU accession as well.

LT: Do you foresee things becoming more complicated because of the Kosovo issue in Serbia?

AP: Kosovo is not an easy issue indeed, but it is our interest to see the countries of the Balkan within the EU. EU accession perspective is the most effective stabilizing factor in the Balkans.

LT: Going into cultural aspects, Hungary has a colourful and rich literature and music. The goulash and the Csardas are favourites around the world. How crucial is it for your embassy to promote the Hungarian national culture in the world?

AP: We do our best, and the only limit is financial. Last year we served Hungarian meal at our National Day reception, and we are going to serve it again this year. Our Embassy also promoted Hungarian wine, we had a nice programme with “Vyno Klubas” in Vilnius. We promoted Hungarian meal during the AgroBalt exhibition in Kaunas, where Hungarian chefs prepared food for reception of the Hungarian and Lithuanian ministers of agriculture and a Hungarian sommelier introduced Hungarian wines. Hungarian films, theatre groups, choirs, musicians, dancers come to Vilnius and Kaunas every year. Some of these cultural exchanges are organized and financed by our small Embassy here.

LT: How would you say Lithuania has changed during the last 20 years?

AP: Unfortunately – or fortunately? – I have never been here during the Soviet times, so I cannot compare. But I am sure the development, concerning lifestyle, infrastructure, opportunities and knowledge of people must be enormous. However, there is one issue that is difficult for Lithuania and, to some extent, for the other post-socialist states, and this is emigration. It is a far reaching question: what does population decline in peacetimes mean? It is unique in human history. Before the democratic transition I used to work for the Central Statistical Office of Hungary. I was an IT expert and mathematician that time. My hobby was historical demography. During the past centuries population of a country declined because of war, famine, cholera or other disasters. But during prosperous times population was growing. It is difficult to explain what happened to our countries, we have made enormous achievements, but we are unable to keep our population.

LT: You must work hard in your position at the embassy, and as the last question, let me ask what do you do to relax? Do you have any hobbies?

AP: Once we tried the kayak on the Neris. I ride my bicycle quite often in Vilnius. But what I miss here in Vilnius, and what was a big negative surprise for me… what do you think it was? The lack of ice rinks. Before we moved here I thought there would be an ice rink on every corner during the winter. So last summer, when we packed our belongings, the first pieces were the skates for kids, I also took the hockey sticks. But in the winter it turned out we could not skate at all. Recently, my younger son joined the children’s hockey club “Iron Wolf” in Akropolis, but it is an indoor ice rink. I used to ski downhill and I know, of course, there are no hills in Lithuania and you cannot change that, but ice rinks… You know, in Budapest, where climate is a much warmer than in Vilnius, there are more ice rinks than here.

The Ambassador also wanted to complement our interview with interesting data about the structure of the Hungarian economy. For instance, he highlighted his country’s role as an export economy whose main industry is manufacturing, contrasting it to Lithuania’s mainly service-based composition. Furthermore, despite some media reports pointing out the health of his country’s economy, the Ambassador showed us statistics and information highlighting that despite the slow-down in economic growth in the export markets, Hungary’s trade surplus reached €7 billion in 2011 and the figure will be the same this year.

The Ambassador further stated that the Visegrad countries – the V4 nations (Czech Republic, Poland, Slovakia and Hungary) – are the workshops of Europe today. Their industrial production – for example the German cars made in these countries – is a major contribution to the global German export.

Additionally, further reports signalled to a Hungarian economy where its net external financial capacity is at all times high. In 2011 the Hungarian GDP (Gross Domestic Product) is 5.2% higher than the GNI (Gross National Income). Hungarians produce 5.2% more than consume. The difference goes abroad as profit repatriation of the foreign companies and debt service to foreign creditors.

In essence, the Ambassador rightfully communicated the message that Hungary – like the other new member states in Central Europe – is not a burden to the European Union and that his country is not being subsidized by other European partners.