Briefing notes

East-West cooperation is good for Hungary

The Minister of Foreign Affairs and Trade spoke about the need for competition to keep Europe – and Hungary – strong on the world stage; and North Korea takes over Germany for most Hungarian investments.

Szijjártó emphasized that the world economy is changing fast: “Old systems are collapsing, new ones are formed; old friendships are broken, new ones are formed.” The minister also noted that the European Union has fallen behind on the world stage, failing to answer to various challenges, such as US protectionism and the spike in China’s growth. 

“Two of the strongest players in the world economy are the United States and China,” Szijjártó said.

Of growing importance, is also the cooperation of Eurasian countries, which could help both the EU and Hungary in terms of increased competitiveness and key technological and scientific development.

In response to criticism of the Hungarian government allowing a Russian company to build the new Paks nuclear power plant, the minister pointed out that “the Paks investment is a Russian-American-French-German and Hungarian joint project.”

Meanwhile, instead of strengthening competition, the EU has restricted internal competition between states, rendering the EU less able to compete as a whole. The minister flatly called this a mistake. One example is how Central European countries have instituted various policies to make them more competitive, such as tax reforms. And yet, the EU pushes for regulating tax policy to be more harmonized across the EU.

The FM said that Hungary will block any such initiatives, as it will decrease competition, work against effective tax policy, and discourage budgetary discipline.

Szijjártó also noted some important recent trends, including the fact that more and more large Eastern companies have been buying up Western European companies. In regard to Western investment in Hungary, 77 percent of “capital investments” were made by US and EU multinationals in 2007, whereas in 2018 investments by US and European companies dropped to 37 percent.

Another surprise: The first half of 2019 saw South Korean companies take over German ones for the most Hungarian equity investments.

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