Amid global slowdown, Eastern Europe decries cut in EU development funds

Analysts say the EU's development funding is important to explain the success of the Fidesz Party in Hungary.

Four representatives of central European countries, known as the Visegrad group (V4), said that the EC Commission's EC plan to reduce the financial cycle by 20% from 2021 to 2027 is "unacceptable" amid the global economic slowdown.

Richard Horcsik, head of the European Secretariat of the Hungarian Parliament's ruling party Fidesz, said that the V4 representative would require each government to oppose the proposed cuts.

The Visegrad group consists of Hungary, Slovakia, Poland and the Czech Republic. These countries received significant sums from the EU cohesive fund from 2014 to 2020.

According to the EC website, this fund is for projects such as infrastructure projects, "Inter-European Transport Networks, European Priority Projects identified by the European Union" and sustainable development.

The EC said on its website "It aims to reduce economic and social imbalances and promote sustainable development."

Horcsik noted in a press conference after the meeting that V4 was a "living learner" of the EU and its cohesion fund, and spent a considerable amount of money on the modernization of underdeveloped areas.

In Hungary, the cut means a 24% cut and EU funding will contribute about 18 billion euros, Hungarian Tamas Shanda, Hungarian Innovation Technology, told a press conference in May.

Financing

Zoltan Pogatsa, a Hungarian Western political politician and lecturer, said in an interview that EU funds were essential to Fidesz's success.

Led by Prime Minister Viktor Orban, the Fidesz Party has been in power since 2010. Fidesz is regarded as a cosmopolitan nationalist and anti-immigrant party that has led a healthy economy since it advocated Hungary's industry and seized power.

According to Zoltan Pogatsa, a lecturer at the University of West Hungary, Fidesz uses nationalist rhetoric, but using international funds to meet economic needs is not the same as above. Said.

Hungary was part of the Warsaw Pact during the Cold War, which meant that it was in an area affected by the Soviets.

During this time, the government owned the majority of large corporations. And in the late 1980s the Soviet Union began to disintegrate, and Soviet satellite stations such as Hungary began to collapse.

Like many former Soviet alignment countries, Hungary entered the Western realm, fueling economic growth without a capitalist system.

Hungary continued to sell, privatizing already nationalized enterprises since the late 1980s. At the beginning of the 21st century almost everything lasted until sold.castle Century, Pogatsa explained.

Since then, Hungary joined the European Union in 2004, allowing it to join the EU cohesive fund, which has allocated € 63.3 billion to member states whose gross national income is less than 90% of the EU average.

The funds will be used for infrastructure and environmental projects, and Orvan specializes in using them, Pogatsa said.

Hungary was ruled by the Socialist Party for several years before Fidesz took power in 2010. Pogatsa noted that their rules were damaged by corruption and inefficiency, which included the use of cohesion funds.

Pogatsa explained that a country could use about 2 to 2.5 percent of its gross domestic product (GDP) as a cohesive fund, but Orban said that "the socialist leftovers could double."

Fidesz meant an increase in infrastructure projects with central allocation and use of funds.

"This is a very efficient way of using funds in terms of absorption, but not necessarily in terms of usability in the economy," Pogatsa said.

Since Fidesz seized power, Hungary's average GDP growth rate is 2.2-2.6%, depending on the source.

Pogatsa has a very poor average growth rate of 2.2%. Not bad, but I'm not impressed by the international comparison of this huge resource influx. ”

Further economic growth?

Hungary was declared with Poland the upcoming economic power of Central Europe.

In both countries, unemployment is low (about 3% each) and workers' wages are increasing in this state.

Hungary's economy grew 5.3% in the first quarter of 2019, but there are signs of a global economic slowdown as the trade war between the United States and China continues.

Orban announced economic measures to boost economic growth in July, including tax cuts, to create additional jobs.

Orban said in an annual policy speech that if "our expectations for the European economic outlook proved correct, Hungary would need to take further action" to protect the economy. "

Source: TRT World

Source Link : https://www.trtworld.com/europe/amid-global-slowdown-eastern-europe-decries-cut-in-eu-development-funds-29760?utm_source=other&utm_medium=rss

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