Recently, Hungary’s EPP delegation – in cooperation with Brussels-based Magyar Hullám – hosted the launch event for renowned Hungarian economist László György’s latest book Creating Balance – The Mission of Economic Policy. In his book, György delves into the reasons for Hungary’s post-2010 economic success.
“The critics of Hungary’s post-2010 economic policy first said that it will lead to bankruptcy. When the accomplishments started to appear, they said the success will only be temporary. Now, when it produces stability and long-term growth they say it solely feeds on EU money,” said László György, discussing mainstream economists’ take on the Hungarian economic model.
György described a threefold goal for his book: to examine what’s wrong with the global economy, to review the processes that defined the Hungarian economy from 1970 to 2010 and beyond; and to provide a framework for understanding economic policy as a sub-system of society. György added that the primary goal of economic policy should be to create decent living conditions for everyone.
Zsolt Darvas, senior associate at the Brussels-based Bruegel Institute, spoke at the event and agreed with György that globalization gave rise to immense imbalances in the global economy. Darvas highlighted how cheap Chinese imports and the rise of global conglomerates in capital intensive sectors contributed to falling wage shares in western countries.
Addressing the criticism that suggests Hungary is feeding on EU money, György explained that during the 2007-2015 budgetary period a total of 130 billion euros invested into the region produced at least 100 billion euros of extra profit for western companies. György added that this is a win-win situation.
By the end of 2016, the number of Hungarians living in serious financial hardship had declined by 1.2 million compared to 2012, according to György. This was the largest improvement in the European Union and the lowest number in Hungary in 20 years. Since 2010, net minimum wages have increased by an average of 30 percent and in the case of dual-income households with two children, the average increase is as much as 80 percent. Meanwhile, employment rose by 17 percent as more than 750,000 Hungarians secured a job.