The must-have newsletter about Hungary

Related Articles

MATOLCSY: INITIATIVE TO SCALE BACK EU BUDGET 'WRONG'

 

National Bank of Hungary (NBH) governor György Matolcsy said the position some Western European member states are taking on the next European Union budget is “unfair” and “wrong”. In an op-ed piece published on Novekedes.hu, Matolcsy argued that the position taken by some member states that the EU’s next seven-year budget ought to be scaled down is, in effect, the unfair termination of an earlier agreement under which new member states opened their markets and allowed western European companies to make acquisitions in strategic sectors in exchange for development funding to support convergence. He added that the profits repatriated by those western European companies always exceeded the scale of development funding from Brussels, while the same companies also benefited from the development funding as many won contracts to undertake the investments it supported.
Matolcsy said “significant progress” had been made in the region in the past 15 years, but said local infrastructure is still not on par with that in the West. At the same time, western European companies have staked out local markets, he added.
At the end of the 1990s, “temporary asymmetry” was accepted as a principle, but now that has been transformed into a “sustained regional asymmetry”, he said. Western Europe has benefited not only from profits repatriated from new member states, but from the several million skilled labourers who have taken up employment in the West, Matolcsy said.
Looking forward to the trends expected in 2030, the debate over a smaller EU budget is evidence that “the EU has given up on funding its proper place in the global economic competition”, he said. At times when money is in large supply, “whoever is stingy is not only guilty of parsimony but is making a huge mistake”, he added.