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07 February 2011

Hungary to oppose tax harmonisation


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Ministerpräsident Viktor Orbán argumentierte, dass ein harmonisiertes Steuersystem Ungarn der Möglichkeit beraube, sich an die stärker entwickelten Länder anzugleichen.


A new quality of economic policy coordination by Eurozone Member States may  unsettle the economic governance framework of the whole Union, said Prime Minister Viktor Orbán at a press conference in Budapest on the day following the European Council’s meeting in Brussels.

Creating this new economic governance framework remains the most important priority of the Hungarian Presidency, he added.

Invoking the proverb “better is the enemy of good,” the Hungarian Premier claimed at his press conference on 5 February that the Franco-German idea of economic policy coordination “goes way beyond the package of six legislative proposals,” aimed to reinforce economic governance, the implementation of which is the Presidency’s main goal. “You can think about a better idea, but you should first carry out a good one,” Mr Orbán said. “We should not be confused by an idea which is better than good: the coordination of the economic policies of 17 Member States,” he added.

Radical Franco-German proposal
Mr Orbán mentioned the plan to set up a common retirement age, a uniform corporate tax rate and the incorporation of fiscal constraints in Member States’ legal and constitutional systems as key elements of the German and French idea, mentioned in the annex of the conclusions of the European Council’s meeting of 4 February. “These are more radical measures than those included in the six-piece legislation package advocated by the Hungarian Presidency,” the Prime Minister insisted.
“In summary, eurozone Prime Ministers probably concluded that they could not manage the eurozone crisis in the framework of 27 Member States, thus they proposed completely unusual steps that have so far been absent from European economic governance,” Mr Orbán stated. “While economies were flourishing, the lack of a common economic policy underpinning the single currency did no harm, but now it is clear that the euro needs a common fiscal and economic policy,” he explained. “Therefore, the strong countries have decided to create one.”

Hungary to oppose tax harmonization
Viktor Orbán noted that the promise “that countries outside the Eurozone may also join the new initiative called Pact for Competitiveness should be considered with due reservation." The premier talked about an imminent storm and said: “There is no single common ship any longer, but a fleet,” and “everyone needs to strengthen their own ship.”
“The Hungarian Government does not object to the 17 eurozone states making decisions for the sake of stronger economic coordination in the European Union,” but Viktor Orbán ruled out that Hungary will contribute to tax harmonization. “As long as I am Prime Minister, the Government of Hungary will never support tax harmonization,” he declared and argued that harmonised tax systems would deprive Hungary of the opportunity to catch up with more developed countries. Mr Orbán went on to say that “Hungary must never participate in any cooperation that involves the harmonisation of tax systems because that would be tantamount to Hungary capitulating. We have to work more and need a better tax system than developed countries,” he added.

No threat of two-speed Europe
“We are happy that the euro will be saved but we must follow our own path,” the Prime Minister admitted. In this context, he evaluated the chances of Hungary adopting the euro: “With the present constellation, eurozone accession is inconceivable before 2020.”
At the same time, Mr Orbán stated in response to a question that there is no threat of a two-speed Europe and the continent torn in two, “since 17 May not make any decision in violation of the Treaty.” He admitted that a closer economic cooperation among the 17 Member States “will radically alter the rules of accession to the eurozone to help adopt a common fiscal policy.”

 





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