When Günther Oettinger, the European Commissioner for Budget and Human Resources, revealed that most of the EU funds flowing into Eastern Europe indirectly go back to Germany, there was a public outcry in Hungary. However, there were no numbers put behind the statements. G7.hu now calculated them, and the results are shocking since not only was Mr Oettinger right but also government-close businessmen get a lot of EU money.
How to spend 5 bn EUR
G7.hu examined which companies benefit most from the Hungarian EU-membership. They studied all public procurements of the last settled year, 2017, when
altogether 1239 bn HUF (EUR 3.9 bn) EU money came to the country.
The Hungarian tax-payers added 358 bn HUF to this sum because the intensity of the EU funds is only 50-85 pc. This makes altogether 1597 bn HUF (EUR 5.06B) as distributable money in the country which is 8 pc of the Hungarian state budget.
To start with, they found that even though it is challenging if not impossible to search in the data of the Hungarian public procurements, in the case of the system of the EU, it is rather easy. Even so, since most companies win public procurements as being part of a consortium, it is hard to tell how much money they get individually. This could ruin such examinations; however, g7.hu cut the Gordian knot by giving 50 pc of the won money to the leaders of the consortiums and distributed the rest proportionally among other members. This is how they could calculate, approximately, but still able to show the trends, which companies benefited most from the Hungarian public procurements.
The two biggest winners are two Austrian companies, the Strabag and the Swietelsky. In fact, the former is partly in Russian ownership. Only the third one is Hungarian, the Hídépítő group, while the fourth is Duna Aszfalt which is widely regarded as a government-close company.
Furthermore, since Hungary spends most EU funds on infrastructure projects, mostly construction companies could win them. Interestingly, there were 600 companies which could win more or less money but there were only
30 of them which took 78 pc of the EU funds.
Thus, it can be stated that the market is very concentrated.
Everybody is satisfied?
Moreover, most Austrian, German or Fench companies won the tenders with their affiliated firms registered in Hungary. Therefore, it can be stated that 39 pc of the public procurements funded by the EU are won by non-Hungarian companies. Among the beneficiary countries, Austria is the absolute first by
getting every fourth euro coming from the EU.
They won 1.27 bn EUR while Hungarian companies less than 3.17 bn EUR. The rest was won by German, Fench, Japanese or American businesses.
According to g7.hu’s estimates, among the Hungarian companies, the firms of Lőrinc Mészáros and László Szíjj, two businessmen who are widely regarded as being government close, won 1.17 bn EUR.
Finally, g7.hu calculated that
Austria is the absolute winner of the Hungarian EU-membership
since Vienna pays only 92M EUR to the EU budget but gets 1.27 bn EUR only from Hungary. According to the economic news website, they were not able to calculate what equipment and commodities the winner companies work with but they presume that these are also from the core EU-countries. In the IT sector, where the added value matters most, Hungarian companies perform well perhaps this is why the EU gives money mostly for infrastructure projects to make the core countries interested in admitting more and more countries.
As we reported before, European Commissioner for Budget and Human Resources Günther Oettinger said that most of the EU funds flowing into Eastern Europe indirectly go back to Germany, which makes Europe’s largest national economy a net beneficiary of the cohesion funds supplied to less developed EU member states.