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macroscope Prime Minister Viktor Orbán came away from the European Union’s budget talks claiming victory after hammering out better funding terms for Hungary than had been expected. The government sees Hungary as one of the biggest beneficiaries of the next budgetary period starting in 2014, although its opponents say any claims of victory stem purely from juggling numbers. BBJ GERGŐ RÁCZ
European Union leaders concluded an unsurprisingly lengthy debate in Brussels early February and agreed on the fundaments of the bloc’s next seven-year budget. As a result of the negotiations, the 2014-2020 period has an allocation of €960 billion compared to the €993.6 bln approved for the previous time span ending in 2013, reflecting pressure from member states such as Great Britain, which had urged the EU to adopt a more stringent approach to its finances. Orbán stated that Hungary’s negotiators were capable of increasing the country’s central funding framework even as the next budgetary period brought cutbacks to the EU as a whole, this latter fact being unprecedented in the bloc’s history. Hungary has been approved €20.5 bln in cohesion funds for the seven-year stretch plus another €4 bln in agricultural and other subsidies. Orbán told parliament that the agreement means the country will get HUF 712,000 in per capita funding from the EU, up from HUF 660,000 in the previous budgetary period. “We have never seen such success since Hungary’s accession to the Union in 2004,” Orbán said in his address to parliament. Orbán’s claims to success are supported when compared to the original plans from last year that would have seen Hungary’s funding reduced by some 30%, meaning the terms are much more advantageous than could have been expected. The premier has repeatedly stated that the funding coming from Brussels is “our money”.
Photo: European Comission
EU budget debate – victory or defeat? EU HEADS OF STATE AND SENIOR OFFICALS’ GROUP PHOTO AFTER A SUMMIT
Government officials have made extensive efforts and participated in the Friends of Cohesions initiative that comprises states advocating the need for the European Union to continue its heightened support for EU states that are less economically advanced than their counterparts in the Western parts of the continent. QUESTION OF PERSPECTIVE The political opposition and some economists have criticized Orbán for juggling with the numbers; changes in the euro-forint exchange rate mean that any gains the government claims to have achieved exist solely on paper without any tangible future benefits for the country. They note that measuring the aggregates for the previous against the next budgetary period is a mistake, since there have been major changes in exchange rates, inflation as well as demographic conditions, factors that all skew any possible comparisons. “We were bombarded with seven goals in the first half, and we managed to pull back two or three in the second as consolation,” former prime minister and head of the Együtt 2014 opposition movement Gordon Bajnai said of the deal, deliberately using football terms to reflect Orbán’s self-professed love of the sport. Others in the opposition camp expressed similar views: chairman of the socialist MSzP Attila Mesterházy said that, in euro terms, the government had actually surrendered a €4.6 bln reduction when compared to the €25 bln available in the 2007-2013 period. Government officials rejected the objections. Orbán, echoing the words of his Fidesz party’s caucus leader Antal Rogán, said that the main aspect when considering the outcome of the decision is that Hungary remains a net recipient of EU funds, meaning the country still gets more out than it contributes into the central budget. “What we have toiled to reach is an opportunity, a financial framework that Hungary may claim and put to use,” he said. “The results of the government’s negotiations require no commu-
nication tricks, the numbers reflect the truth,” he added in rejection of opposition claims that the government is showboating. Orbán boasted that, overall, Hungary claimed the second best position of all the EU nations during the negotiations, with only Lithuania reaching better terms. Whether the budget is ultimately approved is still up for debate, since, for the first time ever, the European Parliament has veto powers over the budget terms agreed upon by the member states. “We mustn’t give up on this fight,” Mesterházy told parliament, and urged the government to summon Hungary’s EP representatives to prepare them to argue Hungary’s case to fellow MEPs. EVERY PENNY COUNTS Apart from the political gains stemming from reaching more favorable terms than expected, the government is all the more committed to raising the level of available EU funding to the maximum possibly attainable for one simple reason: it’s the only money the country is getting that goes on development. The 1% contraction to investments planned for this year in the annual budget was to be contained almost exclusively
through the utilization of EU funds, with hardly any private sector involvement foreseen. Even if the funding is available, Hungary has previously produced questionable results when it comes to actually putting the available budget to use. Businesses seeking to take advantage of the tender openings find themselves excluded, unable to raise the necessary co-payments needed to even apply, lacking capital of their own and having difficulties securing bank loans. State secretary János Lázár said that so far there are valid contracts for 85% of the available 2007-2013 budget, but added that the government will be looking to make major efforts to accelerate the process, distributing some HUF 1.5 trillion this year. The government has shown its dissatisfaction with the allocation of funds so far, if the disbanding of the National Development Agency (NFÜ) tasked with overseeing EU-funded development projects is any indication, not to mention accusations that millions have been doled out on pointless projects. Reports citing anonymous inside information have claimed that the government has yet to finalize how the funds in the upcoming budgetary period will be managed. ■
PwC Hungary presents the introductory video message of CEO Nick Kós, who talks about teamwork, the operation of the company and things that employees are proud of.