I’m happy to publish this article, which I received from Hungary. It expresses the feelings of many, although they are cognizant of the legal constraints inherent in the constitutional setup of the European Union.
In his blog, Viktor Zsiday, an economist, one of the richest persons in Hungary, portfolio manager of Concorde Asset Management and chairman of PLOTINUS Asset Management, provides yet another explanation for the election victory of Fidesz. He cites the 1992 saying of Bill Clinton: “It’s the economy, stupid!” meaning that people are mostly interested in the state of the economy: whether the economy will grow, they will have a job, their wages will increase, or not. Analyzing the statistical figures for the years 1994-2018, Zsiday clearly demonstrates a positive correlation between the growth of wages and the results of the national elections: in every case, in comparison with the previous elections, the number of votes for the ruling party always increased if the wages grew in the period before the elections, and the number of votes decreased if the wages fell. As a substantial increase of the wages occurred in Hungary in the last few years, the voters favoured Fidesz.
The Hungarian economy depends to a high extent on EU funds. A study on the topic ordered by the Hungarian government and still accessible on the government’s website states: “International comparisons show that in relation to GDP, it is in Hungary that EU funds had the biggest effect on the economy. At the same time, between 2006 and 2015 GDP increased only by 4.6 percent. From this it can be concluded that the growth perspectives of the Hungarian economy are not reassuring, its growth depends too much on EU funds.”
The Hungarian government had been allocating a disproportionately large part of EU money available for the 2014-2020 funding period before the national elections which took place on 8 April 2018: already 90 percent of the total EU funds was awarded by the end of 2017. Just within one month (December 2017), the Hungarian government allocated HUF 1660 billion (€5.36 billion) of EU money, i.e. one-fifth of the total sum foreseen for the seven-year period. This way the Hungarian government has created the impression among the public that its economic policies are extremely successful. The voters did not realise that the lavish disbursement of EU money temporarily hides the fact that this enormous amount of taxpayers’ money is used in a very inefficient way, which will certainly have grave consequences in the coming years.
There have been several warnings towards the European Commission, pointing out that the EU money must not be used, even indirectly, for the election campaign of any political party. For example, already in April 2017, Benedek Jávor, Member of the European Parliament from the European Green Party, posed the following question to the Commission: “Article 4(1) of Regulation (EU) No 1303/2013 sets out the goals for ESI funds, which implementing Member States are expected to follow. In the last few months, the Hungarian Government has repeatedly declared its intention to spend as much EU money as possible in the years 2017-2018 and intends to publish all calls for proposal this week. This means that a disproportionately large part of EU money available for the 2014-2020 funding period would be disbursed just before the 2018 national elections. This is not only unethical, but runs counter to the Union strategy for smart, sustainable and inclusive growth. Moreover, with the main aim of spending EU funds as quickly as possible, the move would undoubtedly lead, to a large extent, to an inefficient and ineffective use of Union public resources. (1) Does the Commission agree with this assessment? If so, what steps does it plan to take to ensure the best possible use of EU funds and prevent the eventualities outlined above from occurring? (2) Does the Commission believe that the mass publication in one go of calls for proposal for the entire funding period best serves the desirable goal of an efficient and effective use of the EU budget? If not, does the Commission intend to challenge this move?”
The Commission’s answer was extremely disappointing: “In accordance with the shared management principle governing the European Structural and Investment Funds, implementation tasks fall under the remit of Member States. Therefore, Hungary is fully entitled to decide on its own implementing rules.”
In November 2017, former German finance minister Hans Eichel and three former European Commissioners wrote an open letter to the Commission, asking the Commission to immediately take action in view of the misuse of EU money in Hungary. They wrote, among others: “More than 95% of public investment projects in Hungary receive EU co-financing. The Hungarian government announced that it will use 2017 and 2018 to allocate most of the EU money available for the funding period 2014-2020, and is rapidly implementing this strategy. The purpose here is clear: to help Fidesz at the national elections in spring 2018, without any consideration of what will happen after 2018 when EU funding will be mostly exhausted. Such jerking of the economy is also extremely detrimental for business in general; the rapid disbursement leads to inefficient use of EU money, and greatly increases the risks of corruption. This brings a special urgency to the situation.” As far as we know, the Commission did not give any reply to this letter.
It would be unfair to blame only the European Commission. The net donor countries of EU funding also deserve to be reproached for their acquiescence in the light of the blatant misuse of the money of their taxpayers in Hungary. The governments of these countries have been regarding silently what Erik D’Amato, former editor-in-chief of Budapest Business Journal, characterized already in 2014 with the following words: “Fidesz is ‘Putinizing’ Hungary with EU funds.”