Hungary for maintaining current EU cohesion policy, against EU’s punitive China tariffs

Keeping the current balance of EU cohesion policy between social and regional cohesion funding is in Hungary’s interest, Tibor Navracsics, the minister of public administration and regional development, told a roundtable on the future of the European Union, noting big regional differences in Hungary, with the development of many of its regions below the EU average.National economy minister Márton Nagy slammed the EU for seeking to slap punitive tariffs on Chinese electric cars.

Hungary’s interest to maintain current EU cohesion policy, says Navracsics

“So we want to maintain regional cohesion funding,” he said, adding that Nordic countries wanted funding to go towards strengthening social cohesion, largely because of integration problems caused by migration.

Cohesion policy is reviewed every seven years, he noted, mostly based on a EU cohesion report published every three years, adding that debates over the future of cohesion policy take place during the Hungarian EU presidency.

Navracsics said cohesion policy could help to improve the EU’s economic competitiveness, arguing that if regions catching up needed less funding by and by, more money would be on tap to boost competitiveness.

Current cohesion funding is distributed according to each region’s level of economic development, he said, adding that it was in Hungary’s interest to maintain this.

Certain member states want to include other indicators, such as the level of youth unemployment, he said, adding that this was not a problem that Hungary had and so it would miss out on such funding.

No one finds money for enlargement

Meanwhile, regarding EU enlargement, Navracsics said a political decision on the Western Balkans, Ukraine and Moldova had been made, “but no one can say for now where the funding for this will come from”.

János Bóka, the European affairs minister, said the Hungarian presidency was “special” as the European Council was the only major EU institution not in the midst of a transition. Among its tasks is to ensure a smooth institutional transition, he added. Another was to highlight the political priorities for the future, he said.

Hungary, he noted, was at the start of its presidency and substantive work had begun after the summer political lull.

Punitive tarrifs against China may be counterproductive

Márton Nagy, the national economy minister, said the EU had been uncompetitive before the Covid epidemic and energy crisis, which had merely exacerbated its laggardness. For now, however, “no one knows where the money will come from to implement the turnaround in competitiveness,” he said.

The US and China devote budget funds towards improving competitiveness while the EU limits the budget deficit to 3 percent of the GDP. But joint borrowing, he added, was unfeasible as it would increase the deficit of the EU as a whole while raising the issue of who would get to distribute the jointly borrowed money. Instead, the national budgets should finance the transition, he said.

Nagy also slammed the EU for seeking to slap punitive tariffs on Chinese electric cars, arguing that China may well respond by banning goods made in the EU. “It isn’t possible to negotiate effectively if we slap our negotiator before the negotiation,” he added.

He also bemoaned the fact that neither EU regulations nor funding was available for the development of electric cars.

Meanwhile, he said the EU integration of the Western Balkans would strengthen EU competitiveness as its economies were growing 2-3 times as fast as that of EU member states.

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