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Category: Economy

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Economy

Economy

Here’s how the EU plans to abuse cohesion funds

Adopted on Tuesday, the European Parliament’s report on the basic principles behind post-2020 cohesion policy comes just in time to counter the expressly un-European voices in Brussels that advocate the misuse of structural and investment (cohesion) funds. These voices see them as an opportunity to blackmail Member States into giving up their right to decide whom they wish to let into their own countries. Using cohesion funds to further a political agenda is fundamentally at odds with the purpose of the funds. Here are two concerns that need to be addressed.

On one hand, the EP’s overwhelming majority fortunately still…

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Tamás Deutsch June 16, 2017

Economy

With record-low unemployment, Hungary is getting back to work

When the Orbán Government took office in 2010, it set about building a new, labor-based economy that would replace welfare checks with work opportunities. Today, Hungary’s unemployment rate has dropped to its lowest in 27 years. At 4.5 percent, according to the latest data, the country’s jobless rate is less than half of the EU average of 9.8 percent and beats most other Member States.

“Hungarian reforms are working,” we say, referring to a package of government policy changes that have paid off state debt, cut taxes and spurred GDP growth. But the Hungarian economy is working, because Hungarians are…

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Ildikó Gáll-Pelcz January 23, 2017

Economy

With economic turnaround, Hungary aims to create ‘best business atmosphere’ in the region

It’s been a long time coming, but over the past six years Hungary has recovered from an economic disaster potentially worse than the one Greece has faced. Former critics, even some of the harshest detractors of the Orbán Government’s economic policies, have acknowledged the success, and with the turnaround gaining momentum, the government is setting out a more ambitious agenda. With the foundations of economic stability firmly in place, the government aims to create the most attractive business climate in the region, increasing competitiveness and the living standards of the people.

In recent days, Eurostat updated its Macroeconomic Imbalance…

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Ildikó Gáll-Pelcz November 29, 2016

Economy

Fiscal discipline, job growth: Hungarian economy continues to exceed expectations

In today’s European Union, many Member States struggle to keep spending under control and hit the Maastricht targets, while producing economic growth and reducing unemployment. Once relegated to the back of the class in the remedial group of European economies that face perpetual excessive deficit procedure, the Hungarian economy has now moved to the front row.

The ambitious economic goals set by Prime Minister Orbán include demanding fiscal discipline to keep the budget deficit not only under the three-percent Maastricht threshold but low enough to reduce nominal state debt. It calls for GDP growth to increase from the current level…

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Ildikó Gáll-Pelcz September 14, 2016

Economy

We all want to pay 0.005 percent tax

That is 1 euro after every 20 thousand euros. Yet only Apple and very few multibillion-dollar businesses enjoy this privilege. Where is social responsibility? What happened to fair competition (among businesses but also member states)? What got into the European Commission? How did Hungary pave the way?

The European Commission has ruled that Ireland should collect 13 billion EUR, plus interest, from Apple on sales concluded between 2003 and 2014, when the company was granted exceptionally favorable taxation status. For eleven years, the Irish tax authority charged Apple only a symbolic corporate tax that was, over the course of the…

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Ildikó Gáll-Pelcz September 13, 2016

Economy

Hungary’s economy resilient despite post-Brexit turbulence

The United Kingdom last week appointed Theresa May as its new prime minister and, following a rough stretch for British politics and financial markets, the FTSE 100 soon rebounded and a heavily discounted British pound regained value. Throughout the post-Brexit turbulence, key indicators in the Hungarian economy have remained decidedly positive.

Hungary is reporting record amounts of foreign direct investment, reaching a record 1.33 billion EUR in the first six months of 2016 with investments from the United States outpacing those from Germany for the first time in many years. And the forecast for the rest of 2016 gives more…

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Ildikó Gáll-Pelcz July 18, 2016

Economy

‘Unorthodox Hungary’ and the credit rating upgrade

Following the 2008 financial crisis, investors worried over two European countries: Greece and Hungary. While Greece still struggles, Hungary has found a way out of the terrible spiral of unmanageable deficits and growing debt. The credit rating upgrade by Fitch, long overdue and one that the markets already priced in some time ago, is just another sign that Hungary is on the right track.

Beating the statistics, Hungary was returned to investment grade by Fitch Ratings in May after a four-year hiatus. According to Fitch’s own statistics, it typically takes a country six years on average to return to investment…

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Ildikó Gáll-Pelcz June 8, 2016

Economy

Less Vulnerable, More Stable: Hungary’s Recovery Beating the Odds

The numbers are in, and 2015 was a good year. As in previous years, Hungary improved in all convergence criteria. The GDP grew by 2.9 percent. The budget deficit dipped to 2 percent of GDP, and the debt-to-GDP ratio shrank to 75.5 percent. When announcing the data on Monday at the opening of Parliament’s spring session, Prime Minister Orbán called on MPs to support an even stricter fiscal goal: a zero-deficit budget to continue to reduce the country’s debt.

Before the Orbán Government took over in 2010, the debt-to-GDP ratio reached well above 80 percent, the annual budget deficit exceeded…

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András Gyürk February 18, 2016