HUNGARY: Prime Minister Viktor Orban defends a flat tax and suggests he is willing to form agreements with the European Union

Record ID: 566332

  • Title: HUNGARY: Prime Minister Viktor Orban defends a flat tax and suggests he is willing to form agreements with the European Union
  • Date: 8th February 2012
  • Summary: SLATE INFORMATION
  • Embargoed: 23rd February 2012 12:00
  • Keywords:
  • Location: Hungary, Hungary
  • Country: Hungary
  • Topics: Economy,Politics
  • Reuters ID: LVA4LKLK89OXBCBV5K354UAEZJKW
  • Story Text: Hungarian Prime Minister Viktor Orban gave a state of the nation address to a select group of voters on Tuesday (February 7) after a year of damaging clashes with the EU over disputed laws.
    He defended a flat tax saying it was best for the squeezed middle classes.
    "The rich, the multimillionaires, always find a way to take their money out of the tax system... It's always the middle class who pays the burden, therefore the protection of the middle class can only happen with a proportionate flat tax."
    Orban's conservative government approaches half of its four-year term in office in May, and has lost nearly half of its voters since its 2010 election landslide.
    He is struggling to repair tattered ties with the European Union so it can secure a credit lifeline from the International Monetary Fund and EU to stave off a market crisis and potential insolvency.
    His Fidesz party has seen its public support decline sharply, even though it remains the strongest political force in the central European country of 10 million.
    The European Commission gave Orban until Feb. 17 to address concerns over new laws or face legal action and the risk of more delay in aid talks.
    Orban hinted that his government will try to find agreement with the EU and sought to explain to voters why the government took on conflicts with the EU, which sent the forint to all-time lows in early January.
    "We are to fight if necessary but also to make an agreement in the interest of the country. We've left behind the Great Indian Book and the Adventures of Captain Tenkes [Hungarian adventure hero], for us the struggle and the agreement are both tools to make Hungary strong and successful," said Orban.
    Hungary wants the loan package to rebuild market confidence before it has to borrow nearly 5 billion euros on top of regular forint-debt refinancing to pay back both bondholders and an earlier IMF/EU loan package this year.
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