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“Every development we have planned for the next 10 years can be solved on our own”
– This is how Viktor Orbán put it on Kossuth Radio Good morning, Hungary! on Friday, referring to the fact that the Hungarian veto announced due to the rule of law mechanism may delay funds coming from the union. A forceful phrase, in relation to which we examine to what extent Hungary benefited from subsidies from the European Union in the period 2014-2020.
As the European Commission points out, Hungary has been one of the so-called net beneficiary Member States since accession, which means that it receives much more money from grants than it pays out. The grants were applied for through a total of ten operational programs.
As a net beneficiary, each year we receive many times what we had to pay to the common budget. In 2014, it amounted to € 6.6 billion, compared to € 1.02 billion (at the current exchange rate of HUF 2,376 million, compared to HUF 367 billion), and subsequent years, according to the committee, were as follows :
- 2015: € 5.6 billion to € 1.09 billion
- 2016: between 4,500 and 1,060 million euros
- 2017: 4,040 million euros to 970 million euros
- 2018: between 6,200 and 1,200 million euros
- 2019: between 6,200 and 1,300 million euros.
But let’s see how our EU subsidies are in relation to the total Hungarian product. Compared with goods produced by Hungarians, the scope of the EU aid will be more visible.
In its September 2020 inflation forecast, the central bank detailed what the efficient use of the European Union’s resources looked like in proportion to GDP. The amount was almost 7 percent of Hungarian GDP in 2014, and by 2015 it had risen above 8 percent. Between 2016 and 2019, it dropped to 2 percent of GDP at the beginning of the period and has stagnated around 4 percent since 2018.
Not only on this basis, we say, economic analysts also claim from time to time that the Hungarian economy is activated by sources coming from the union. For example, the Zsolnay Cultural Quarter was built with the help of the EU, from where we managed to ensure the renovation of the National Oncology Institute, the acquisition of equipment or the construction of the southern industrial park in Miskolc, to name just a few examples.
But not only for EU investments, the construction of roads or canals, or the renovation of public buildings, the EU fund is essential, but ideally it is also vital for the development and survival of small and medium-sized enterprises. , which are the basis of economic stability.
The government has raised the stakes
Applicants can receive support for EU funds through operational programs. The total budget for 2014-2020 is HUF 9.2 billion, which was fully committed by the Hungarian government until April last year. However, according to the latest data from palyazat.gov.hu from November 20, of the 14.616 billion HUF requested, 10.443 billion HUF has already been awarded and 8,096 billion has been paid so far.
Although the total available spending is still HUF 9.2 billion, the commitment is still HUF 10.443 million, according to the government. This may be due to the fact that the government has previously allowed the Hungarian budget to take over at the expense of certain operational programs, or it may also be affected by the weakening of the forint, as a result of which the value of the framework received in euros increases. . Furthermore, there are project promoters who cannot implement the project for which they have applied, so the support is returned to the Operational Programs and can be redistributed.
We still love the union
The Hungarian government intends to rely on EU funds to the extent experienced in the 2021-2027 period, as can be seen from the public interest data from the Center for Priority Government Investments. For example, we want to connect the HÉV lines in Budapest under the name H5 – H6 / H7 with EU funds, and we would also develop the urban-suburban north-south high-speed railway with EU money. In addition, we would like to build a new railway connection tunnel in the capital, develop central stations and sections of railway lines in Budapest.
We will report on the amount of resources we can expect from Brussels in the 2021-2027 period in a future article.
Credit is free
“It sounds good that the self-financing of investments has been resolved a decade in advance, but after the Covid crisis has affected the world economy, it is not possible to predict so far. In current circumstances, it can only be considered for a much shorter period of time.
The Prime Minister will no doubt say in his morning statement that Hungary is in a much better position today than it was 30 or even 10 years ago, without being directly dependent on creditors. “
– This was expressed by László Csaba in response to Viktor Orbán’s morning words to the Index.
A CEU economics professor explained that Budget Council members, who were the most overwhelming in the summer, said, realistically, that our debt-to-GDP ratio would increase from 69% to 77%, which is lower than the eurozone average. This means that Hungary is now one of the few that, if it goes on the market, can essentially borrow indefinitely.
– Of course, it is always a serious question what is worth financing with a loan. If the debate on European funding drags on and a significant portion of tax revenue – around 6 percent – is projected to be lost, and amid increased spending due to the Covid epidemic, the government is now in a position to borrow easily.
This favorable situation, that is, independence from external financial constraints, certainly gives the Hungarian government 2-3 years of leeway, but the long-term prospects depend on the dynamics of Hungarian exports, financial performance and much plus “.
(Cover photo: Prime Minister Viktor Orbán at a video conference of the heads of state and government of the EU member states at the Carmelite Monastery on November 19, 2020. Photo: MTI / Prime Minister’s Press Office / Benko Vivien Cher)
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