Our Chances – Welcome by the Editor-in-Chief

In the sum­mer of 2016, two cru­ci­al quest­ions are at the for­ef­ront of pub­lic in­te­rest in Hun­ga­ri­an so­ci­ety: the mig­rants flo­o­ding Euro­pe and the shock-re­sis­tance and ef­fec­ti­ve­ness of the Hun­ga­ri­an sys­tem of pub­lic fi­nan­ces.

De­ca­des ago, strategic fo­re­casts pre­dic­ted that the Uni­ted Sta­tes of Ame­ri­ca would lose its glo­bal lead­ing role and even its he­ge­mony in the glo­bal dy­na­mics. The Euro­pe­an Union was tho­ught to suf­fer cons­ide­rab­le los­ses to Asia, and fall back third in glo­bal de­ve­lop­ment, howe­ver, it would re­ta­in or even inc­re­a­se its sig­ni­fi­cance as a role model in sci­en­ces, cul­tu­re, in­no­va­ti­on, se­cu­rity, and even po­li­tics. Al­ter­na­ti­vely, sharp vo­i­ces also how­led in the ether and break the si­len­ce of sci­en­ti­fic con­fe­ren­ces, pre­dic­ting that the eco­no­mic im­pe­tus of the globe would be given by the large Asian eco­no­mi­es, rat­her than the Uni­ted Sta­tes of Ame­ri­ca and the Euro­pe­an Union, in other words, world eco­no­mic de­ve­lop­ment would be dri­ven by the emer­gen­ce of China and India.

By now, everyth­ing seems to be tak­ing a dif­fe­rent shape. Bet­ween 2008 and 2014, the cent­ral bank of the Uni­ted Sta­tes of Ame­ri­ca (Fed) comp­le­ted a succ­ess­ful cris­is ma­nag­ement, cut the in­te­rest rate, ac­ti­vely par­ti­ci­pa­ted in the rel­aun­ch­ing of cor­pora­te lend­ing and in bo­ost­ing the sove­reign se­cu­rity mar­ket, and as a re­sult, the US got back its old glory. The unemp­loy­ment rate is below 5 per­cent, and it has a po­wer­ful ca­pa­ci­ty to en­for­ce its fo­rei­gn po­li­cy. It succ­ess­fully lo­ca­li­zes its po­li­ti­cal op­po­nents, whet­her Rus­sia or So­uth-ea­st Asia, or any other can­di­da­te in­tend­ing to ap­pear as a comet, with­holds them and pus­hes them back to their re­gi­o­nal roles. The Euro­pe­an Union’s ne­arly de­ca­de­long fre­e­fall is un­dis­pu­ted, and now the good old con­ti­nent seems to be lo­sing even those va­lues it could have bo­as­ted of. It is be­com­ing do­ubt­ful, quest­ion­ab­le, and what is more, inc­re­a­singly un­cert­ain that Euro­pe is able to re­ma­in a role model in the field of sci­en­ce, cul­tu­re, in­no­va­ti­on, the safe en­vi­ron­ment and po­li­ti­cal cul­tu­re.

Euro­pe has been flus­hed by se­ve­ral mil­lions of mig­rants, and after a few years their num­ber will rise to tens of mil­lions, thus re-dra­wing the eth­nic and re­li­gi­o­us map. Alt­ho­ugh at around the turn of the mil­len­ni­um, eco­no­mic de­mo­gra­phic pre­dic­tions ex­pec­ted the po­pu­la­ti­on to dec­re­a­se by app­ro­xi­ma­tely 50 mil­li­on from 750 mil­li­on by 2025 as a re­sult of the very hum­b­le eco­no­mic de­ve­lop­ment and cons­ide­rab­le loss of po­pu­la­ti­on.

Howe­ver, since the “Arab Spring” all this seems to shat­ter. Ins­tead of imp­ro­ve­ment in the fer­ti­lity rate of Euro­pe­an na­tions, po­pu­la­ti­on num­bers inc­re­a­se due to the le­gions of Cent­ral Asian and North Afri­can re­fu­ge­es com­ing to Euro­pe. Qu­a­li­fi­ed, mo­ti­vat­ed, hard­wor­king and ta­len­ted la­bour was ex­pec­ted to be­co­me the bottle­ neck in glo­bal mar­kets de­ca­des ago, but in Euro­pe’s case this prob­lem can hardly be sol­ved by those who in­tend to sett­le here. The po­orly qu­a­li­fi­ed Asian and Afri­can im­mig­rants not so­ci­a­li­sed for the Euro­pe­an work cul­tu­re and the rules of Euro­pe­an so­ci­al co­e­xis­ten­ce and not used to strict, Prus­si­an work dis­cip­line can hardly make a la­bour basis for Euro­pe­an high­tech pro­ducts, and can hardly re­in­for­ce so­ci­al sta­bi­lity and se­cu­rity on the Euro­pe­an con­ti­nent. Thus the Euro­pe­an re­gi­on will con­ti­nue to suf­fer from the lack of highly qu­a­li­fi­ed and mo­ti­vat­ed pro­fes­si­o­nals, while the po­pu­la­ti­on of ori­gi­n­ally Euro­pe­an na­tions will con­ti­nue to dec­re­a­se. Every con­di­ti­on is given for Euro­pe’s furt­her de­te­ri­or­a­ti­on and for the con­ti­nu­ed de­va­lu­a­ti­on of the va­lues still re­ta­ined. Mil­lions of Greek, Spa­nish and Por­tu­gu­ese unemp­loyed have been wa­i­ting for emp­loy­ment for years, while the “so­ci­al de­moc­ra­tic” Ang­e­la Mer­kel hopes to top up the empty pla­ces in Ger­man in­dustry with Afri­can im­mig­rants.

In the glo­bal money and ca­p­ital mar­kets, en­or­mous ex­cess ca­p­ital has been ac­cu­mu­la­ted and has led to a supply mar­ket, with the po­pu­la­ti­on com­mut­ing bet­ween con­ti­nents or – and this seems to be the more do­mi­nant trend at the mo­ment – move from the war­torn zones to Euro­pe for good. Wars may start for the ac­qui­sit­i­on and re­tent­ion of the inc­re­a­singly scarce re­sour­ces, and the on­go­ing po­li­ti­cal and mi­li­tary conf­licts might inc­re­a­se. The “back to basic” app­ro­ach will soon be­co­me the key trend: ag­ri­cul­t­u­ral land, cli­ma­te, water, energy and food, and espe­ci­ally safe and li­ve­ab­le en­vi­ron­ment will app­re­cia­te. In the fu­tu­re these will have a hig­her im­pact on the ope­ra­ti­on, succ­es­ses or fa­i­lu­res of the in­di­vi­du­al fa­mi­li­es, com­mu­ni­ti­es, re­gions, count­ri­es, na­tions and large eco­no­mic in­te­gra­tions than du­ring the in­dust­ri­al and post­in­dust­ri­al eras. At the mo­ment, Euro­pe still abo­unds in these re­sour­ces and basic va­lues. But if its eth­nic and re­li­gi­o­us map is re-drawn, the si­tu­a­ti­on can hardly re­ma­in the same.

In ad­di­ti­on to the re­pea­ted waves of mig­rants, Hun­ga­ri­ans have been on ten­ter­ho­oks with the at­tacks on the sys­tem of state fi­nan­ces and pub­lic funds re­or­ga­ni­sed in 2010. Bet­ween 2010 and 2013, the Hun­ga­ri­an govern­ment succ­ess­fully cons­o­li­da­ted the fis­cal sys­tem. State fi­nan­ces kept sta­bi­li­sing, fa­mi­li­es were saved from the cl­ut­ches of banks in hund­reds of thou­sands, all with the cont­ri­bu­ti­on of the Na­ti­o­nal Bank of Hun­gary under the cont­rol of a new le­aders­hip from 2013. The Fund­ing for Growth Sche­me was la­un­ched to pro­vi­de 33676 busi­nes­ses with in­vestment and wor­king ca­p­ital loans in an amount of about HUF 2281 bil­li­on. In the frame of FGS, loans were gran­ted pre­do­mi­nantly for ca­pa­ci­ty inc­re­a­se, lay­ing safe fo­un­da­tions for bo­ost­ing in­vestments and the con­co­mit­ant GDP inc­re­a­se. FGS gave an im­pe­tus to cor­pora­te lend­ing, toxic inst­ru­ments (FX mortgage, pro­ject fi­nanc­ing) were re­mo­ved from banks’ ba­lance she­ets, bank in­te­rests drop­ped, and si­mul­ta­ne­o­usly, the po­li­cy pur­su­ed by the cent­ral bank fa­ci­li­ta­ted bank sys­tem sta­bi­lity. FGS cons­ide­rably mit­iga­ted the in­te­rest burd­ens for the busi­nes­ses par­ti­ci­pat­ing in the prog­ram, and as a re­sult of both the new loans and the re­dem­pt­ion of FX loans, busi­nes­ses and hou­se­holds could both re­a­li­se hig­her in­co­me. As a re­sult of the 83-per­cent cut in the cent­ral bank base rate, Hun­ga­ri­an state fi­nanc­ing be­came che­a­per, state debt drop­ped by 10 per­cent, and the ex­pos­ure of sove­reign debt to fo­rei­gn exc­han­ge fluc­tu­a­tions fell to half. In the agg­re­ga­te, the eco­nomy can be said to start gro­wing, and si­mul­ta­ne­o­usly with a stab­le fi­nan­cial ba­lance, hou­se­holds’ sol­vent de­mand has inc­re­as­ed, and as a re­sult of price re­gu­la­ti­on (over­head cuts), hal­ved per­so­nal in­co­me and cor­pora­te taxes, the ac­tive role pla­yed by the govern­ment in mar­ket or­ga­ni­sa­ti­on and re­gu­la­ti­on, and of lower in­te­rest rates, more money is left in fa­mily bud­gets.

In the first round, the chan­ge of re­gime in pub­lic fi­nan­ces, bro­ught to fru­i­ti­on by Vik­tor Orbán and György Ma­tolcsy, tap­ped the funds ava­i­lab­le for fo­rei­gn banks and in­ter­na­ti­o­nal com­pa­ni­es, and then after 2013, as a re­sult of a dras­tic re­duc­ti­on in the cent­ral bank base rate, fo­rei­gn fi­nan­cial in­ves­tors and in­ves­tors in govern­ment se­cu­ri­ti­es could earn less pro­fit on in­te­rest. As these are all ne­e­ded to ma­in­ta­in equi­lib­ri­um in Hun­ga­ri­an pub­lic and hou­se­hold fi­nan­ces, the eco­no­mic po­li­cy govern­ment under the le­aders­hip of Vik­tor Orbán and György Ma­tolcsy is compel­led to en­du­re per­ma­nently re­cur­r­ing at­tacks from the in­ter­na­ti­o­nal space, while the po­pu­la­ti­on en­joys the be­ne­fits of the un­con­vent­io­nal sys­tem of pub­lic fi­nan­ces. The enemy is now at­tac­king the Head­qu­ar­ters, the haven where money and loans are is­su­ed and fo­rei­gn exc­han­ge is kept safe: the Na­ti­o­nal Bank of Hun­gary and its gover­nor. They make eff­orts at dest­roying the cent­ral bank’s cre­di­bi­lity and in­di­rectly, govern­ment ope­ra­ti­on. What can we, Hun­ga­ri­an ci­ti­zens do? Can right-wing in­tel­lec­tu­als be ex­pec­ted to fight as lions for the Head­qu­ar­ters and for the se­cu­rity of the areas under its pro­tec­ti­on, just as the sol­di­ers who de­fen­ded Euro­pe at Szi­get­vár from the spre­ad of the Os­ma­nic Em­pire 450 years ago, in 1566?

With cons­ide­ra­ti­on to the above descri­bed pri­o­ri­ti­es, this issue of our jour­nal rightly fo­cus­es on the sci­en­ti­fic, his­to­ri­cal and legal app­ro­a­ches to the prob­lem of mig­ra­ti­on, in a study by pro­fes­sors Mik­lós Kásler and Tamás Prug­ber­ger, and the next issue as well as the Eng­lish spe­ci­al edi­ti­on will focus on the achi­eve­ments and sci­en­ti­fic ta­xo­nomy of Hun­ga­ri­an pub­lic fi­nan­ces. We hope to be able to nar­row the gap in un­der­stand­ing the world po­li­ti­cal cor­re­la­tions that can be cons­idered as a trag­edy for Hun­ga­ri­ans and to bring and ma­in­ta­in our­sel­ves in an ad­van­ta­ges po­sit­i­on.

It is worth read­ing Pol­gá­ri Szem­le!

Prof. dr. Csaba Lent­ner uni­ver­sity pro­fes­sor, edi­tor-in-chi­ef