Hungary

Centre for Economic and Regional Studies of the Hungarian Academy of Sciences

Vital interest in Western Balkans

Institute for World Economics of the Hungarian Academy of Sciences

Hungary is situated in the direct neighbourhood of the Western Balkans, therefore it is very much interested in the credible progress of all these countries towards prospective EU membership. Croatia and Serbia are regarded as most important partners among the Western Balkan countries for Hungary, due to direct geographic proximity (and in the case of Serbia, due to the presence of a non-negligible Hungarian minority).
 
Unlike in a number of other EU member states, there is no clear opposition in Hungary against the future EU membership of Turkey. The only aspect where serious doubts occur is the EU budget, namely, the potential effect of the inclusion of Turkey into the system of EU transfers. From this point of view, Hungary is interested (without stating it officially) in a later EU-entry of Turkey.
 
Due to differences in size, but also to geographic proximity and economic opportunities, such fears do not occur in the case of the Western Balkan countries. The region is one of the main fields of Hungarian outward foreign direct investment (which, in a number of cases, means investments by multinational enterprises via their companies in Hungary), and a stable development of this region enhances these opportunities (and increased stability can make these markets available for other, smaller Hungarian firms as well).
 

Hungary appreciates French Presidency priorities

Institute for World Economics of the Hungarian Academy of Sciences

For Hungary, a member state who will participate in the next trio presidency, all the present priorities announced by the French EU-Presidency are of high importance and their special treatment is welcome. In regards to the environment, energy and climate issues,[1] at the ministerial meeting on the 3th until 5th of July, all member states – including Hungary – reinforced their earlier commitment to reduce CO2 emissions by 2020. Beyond the agreement on principle however, it is rather difficult for most of the new member states to fully comply with the target. On this point, Hungary would not like to slow down the negotiations leading to the final agreement by the end of the year, but would like to draw attention to the efforts Hungary already made between 1990 and 2005. According to Hungarian diplomats, the new member states need longer time and more investments to introduce clean technologies, which should be taken into account when calculating the emission trading system (ETS) quota. From this point of view Hungary does not support the Commission allowing Austria, Luxembourg, Spain and Italy to increase emissions by 2020 even above their Kyoto target. Hungary would also support the formula whereby 20 percent of the gains from ETS could be re-channelled to the new member states – against the 10 percent approach of most of the old members.
 

Importance of continuing ratification process

Institute for World Economics of the Hungarian Academy of Sciences

In Hungary the Irish ‘No’ sparked the same old debate between eurosceptics and pro-Europeans as in every member state: namely, the former side, highlighted the EU’s internal problems (mainly lack of transparency and ‘too much power in Brussels’), while the latter perceived the outcome of the referendum as a shock (envisioning even the falling apart of the EU or the launch of Europe at several speeds and circles). Beyond this echo in the media it must be underlined that in Hungary all parliamentary parties are pro-European, and have supported the treaty practically unanimously on December 17th 2007 when it was ratified in the parliament. Being the first country to adopt the Lisbon Treaty, Hungary belongs to the majority of member states attaching distinguished importance to the document. On June 16th 2008, the Ministry of Foreign Affairs of the Republic of Hungary issued the following statement in connection with the Irish referendum:
 
Hungary regrets the outcome of the Irish referendum held on 12 June 2008 but fully respects the opinion of the people of Ireland.
Nevertheless, almost two thirds of the member states have already ratified the Treaty, Hungary having been the first one.
The values and objectives of the Lisbon Treaty still remain important for Hungary and we believe that they are important also for the future of the Union.

First to ratify – little public debate

Institute for World Economics of the Hungarian Academy of Sciences

Hungary has been the first country to ratify the Lisbon Treaty via parliamentary ratification on the 17th of December 2007. Actually, Hungary ratified the Constitutional Treaty equally fast: it was the second member state after Lithuania. No referendum was foreseen in either case, and unfortunately there was practically no public debate about the Lisbon Treaty.
 
The result of the parliamentary vote on the 18th of December 2007 was: 325 “yes”, 5 “no” and 14 abstentions. The adoption of the law endorsing the new Treaty was accompanied by two further moments: the adoption of a complementary document on the protection of minority rights (in connection with the new legal base) and a piece of constitutional modification in the field of justice. Both steps enjoyed practically the same level of support as the Lisbon Treaty itself[1]. All this reflects Hungary’s commitment and wide political consensus during the whole constitutional/Treaty reform process.
 

Rigid mandate for the European Commission was a mistake

Institute for World Economics of the Hungarian Academy of Sciences

Krisztina Vida
 
Weak outcome after ambitious preparations
 
Hungary shares the EU wide general perception that the outcome of the Copenhagen conference was a disappointment for the Union, which wanted to reach a target-specific and legally binding agreement there. Having said that, Hungary of course supported the conclusions of the March 2010 European Council, in which the member states subscribed to a swift implementation of the Copenhagen Accord and also to the gradual formation of the EU’s negotiating position during the next conference to be held in November 2010 in Cancun (COP16). In a stance similar to that of all member states, Hungary also agrees that the Cancun conference “should at least provide concrete decisions anchoring the Copenhagen Accord to the UN negotiating process and addressing remaining gaps, including as regards adaptation, forestry, technology and monitoring, reporting and verification.”[1]
 

Faster and harder reforms without new treaty negotiations necessary

Institute for World Economics of the Hungarian Academy of Sciences

Krisztina Vida
 
Rescue package welcome but too late
 
In the general Hungarian assessment, the solution of the Greek crisis is welcome, but it came too late. According to a high official of the Ministry of Foreign Affairs,[1] the declarations released prior to the March 2010 European Council were insufficient. In fact, a strong positive message was needed not only towards the markets but also towards all members of the Eurozone as well as towards other countries inside and outside the EU. The process leading to the European Council decision was a rather painful one and entailed, on the one hand, fast deterioration of the Greek situation, while at the same time caused an obvious weakening of the German government on the other (the voters’ “punishing” of the Christian Democratic Union (CDU) in the recent elections for regional parliament in North Rhine Westphalia). This means that the long hesitation and late decision brought about tangible economic and political costs. The staggering attitude of EU decision-makers also increased the risks of other Euro countries’ potential “collapse” (i.e., Portugal, Ireland, Italy, and Spain).
 
Stricter coordination and transparency are indispensable
 

Hungary is looking to the east

Institute for World Economics of the Hungarian Academy of Sciences

Krisztina Vida, Zsuzsa Ludvig and Tamás Szigetvári
 
Croatian and Icelandic accession is expected and strongly supported
 
In the official Hungarian view, any enlargement of the European Union must happen once a country complies with membership criteria and accession negotiations should advance according to the candidate’s performance. It seems that, after the recent 10+2 enlargement, the EU will not have “enlargement rounds” with several new member states anymore, but would rather continue the widening process by taking up newcomers one by one. The next new member state of the EU will undoubtedly be Croatia, whose accession treaty could be signed under the Hungarian Presidency enabling the country’s entry in 2012. Croatian membership will be very much welcomed by Hungary, being a direct neighbour. Actually, Hungary is highly interested in the European integration of the whole Western Balkan region in the foreseeable future. Hungary is convinced that the Croatian example of preparations can serve as a model for the other candidates and potential candidates in the Western Balkans.
 

Major questions to be answered

Institute for World Economics of the Hungarian Academy of Sciences

Krisztina Vida
 
Highly active President of the European Council coupled with weaker role of the rotating presidency
 
As regards his new position, Herman Van Rompuy has pledged to fully implement the provisions of the Lisbon Treaty and to use his powers to the utmost possible. In the opinion of a high official at the Hungarian Ministry of Foreign Affairs,[1] Van Rompuy is absolutely acting according to his words. He is very active in representing the Union towards third countries and under his Presidency of the European Council, the role of the rotating presidency at the European Council level has significantly decreased. Van Rompuy is acting rather autonomously vis-à-vis the Council. Although there is cooperation with the actual presidency at both the Permanent Representatives Committee (Coreper) and Council levels, the President is preparing the conclusions of the European Council on his own, assisted, however, by the Secretary General of the Council. The conclusions themselves became shorter, more concise and more streamlined. Before finalising the text, the President takes up only those suggestions from the member states, which represent substantial change (no “stylistic” corrections are accepted).