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Almost one third of projects financed from Hungarian resources

Almost one third of projects financed from Hungarian resources

Some 70 per cent of the projects currently under way are financed from EU resources, and funds generated by the Hungarian economy now account for 30 per cent, the Parliamentary State Secretary of the Prime Minister’s Office said at the conference “Business Summit: For Top Executives!” organised by the daily business newspaper Világgazdaság on Thursday in Budapest.

Nándor Csepreghy added: in 2010, HUF 90 out of every HUF 100 came from the EU budget. He stressed that the nationals of the Eastern-European States are not “secondary citizens” in the EU. The possible termination of the cohesion policy will disrupt economic growth in Western-Europe in the long run as the absorption of every EUR 1 of EU funds in the region generates orders worth EUR 3 in Germany, and EUR 2.1-2.2 in the British or French economy 2 to 3 years later.

Regarding the Paks capacity maintenance project, he said: it is the duty of the State as at any time to create security in the country’s power supply at predictable prices. Hungary cannot become an energy-independent country; it is only able to reduce its dependence and to diversify its resources. The trio of atomic energy, fossil fuels and green energy has no alternative in the cheap, safe and reliable supply of energy, he stated.

Mr Csepreghy said: in recent years, Hungary has turned from one of the most expensive into one of the cheapest countries among the Member States in retail energy prices. One kilowatt-hour of electricity costs HUF 34-35 in Hungary, while German citizens pay some HUF 90. A capacity enlargement in the same magnitude as that of Paks from wind power or solar energy could cost minimum twice as much, but could be as much as ten times more expensive, he said.

In answer to a question, he said: the players of the Hungarian economy would need the availability of non-repayable funds as part of the cohesion policy also beyond 2020, but in his view we must proceed in a direction which ensures that repayable grants should be sufficient. In other words, development policy should function like a 0 per cent credit facility. No one can warrant the legitimacy of a project that is unable to recover its initial investment at 0 per cent, he remarked. He also said that we must make up for the technological disadvantage that Hungarian businesses have compared with their western counterparts, and measures must also be taken with a view to the better capitalisation of companies as credit is already available on the market, but the obstacle to using the available credit is the shortage of capital.

László Parragh, President of the Hungarian Chamber of Commerce and Industry said in relation to the European Union: if the centre does not support those living on the periphery, it will fall apart. The reason being that the majority of resources will flow into the centre from the periphery, as part of which he mentioned, among others, young, innovative work force and the income outflow caused by profit transfers. He took the view that unless this is compensated for, the EU will disintegrate.

By the account of the President of the Hungarian Chamber of Commerce and Industry, he believes that “in particular, German reason” will also emerge in this department, and will realise that the cohesion policy must be maintained in the interest of preserving the unity of the EU.

Zoltán Urbán, Chief Executive of Eximbank reported that new credit placements have increased 3.5-fold in four years, and amounted to HUF 442 billion last year. More than 20 per cent of this sum served the purposes of exports to the Asian region.

Upon the announcement of the strategies of easterly and southerly opening, the bank carried our risk assessments in respect of 133 countries, in the wake of which it helps Hungarian exporters in this many countries, he said.

He highlighted as an example that a Hungarian business supplies health care equipment worth EUR 2.5 million to China where they provide insurance to secure the customer’s payment deferred for 365 days.

In recent years, the Hungarian State has reached a level of economic strength where it is able to provide “fixed aid credit” for poorer countries. As a result, Hungarian businesses may find opportunities in Indonesia, Sri Lanka or in the Balkans, Mr Urbán said.

He highlighted that the bank has also launched capital funds, and as a result of investments, the products of the fashion brand Nanushka emerged in London and Paris as well. He further mentioned the success of a Hungarian business which installs parking systems in China. He said that the Chinese-Hungarian Central-Eastern-European Fund which was set up in 2014 has placed almost USD 500 million in the region in 2 years. Eximbank participates in this scheme with USD 30 million, and the fund has invested more than USD 90 million in higher education and the infocommunications sector in Hungary, he said.

Source: MTI/kormany.hu

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