Hungarian experience in EU integration

Hungarian experience in EU integration
2019-11-27 KKI
In cooperation with the Hungarian Embassy in Pristina, the Institute for Foreign Affairs and Trade organized its penultimate conference within the framework of the Hungarian Cultural Season 2018-2019 in Pristina on 20th November 2019. The event, entitled ‘Hungarian experience in EU integration’ aimed to share the lessons learned and good practices from Hungary’s EU accession, mainly from an economic and agricultural perspective. The conference brought together experts from local ministries and EU institutions.

The conference was opened by the remarks of H.E. dr. László Márkusz, Ambassador of Hungary in Kosovo. The Ambassador pointed out the importance of being well-prepared prior to joining the EU and the single market. Thus, as the need for sustainable economic development cannot be overstressed, the conference bears with of high importance to decision-makers in Kosovo.

In his keynote speech, Szabolcs Takács, Ministerial Commissioner for Brexit in the Ministry of Foreign Affairs and Trade expressed Hungary’s steady support for the EU enlargement toward the Western Balkans. Although Brexit will impact the EU’s governance and policies heavily, this must not change the EU’s commitment towards the region. The United Kingdom has always been in favour of enlargement and this serves as one of the reasons why Hungary needs to maintain a strategic partnership after the country’s departure from the EU. He pointed out that for Hungary, it is a national interest to continue enlargement and therefore, the support of Budapest can be taken for granted. As for the new European Commission, Mr. Takács believes that enlargement policy came back to the table after five years. From Olivér Várhelyi, Commissioner nominee for enlargement and neighbourhood policy he expects continued support for the Western Balkans’ EU integration and a well-defined process of accession. Mr. Takács considers Hungary’s experience in the EU integration is mixed. Although Budapest became stronger – also economically –, the country must keep on fighting for our achieving its interests. Lastly, he expressed his sincere believe that 2020 would be a more successful year regarding the process of enlargement.

Sándor Gyula Nagy, Deputy Director for Research of the Institute for Foreign Affairs and Trade talked about the economic impacts of integration maturity through the Hungarian example. He first explained the concept of integration maturity: that is, how ready are you to join an economic block. Although there are official criteria for joining the EU or the eurozone (e.g. Copenhagen and Maastricht criteria), these are merely statistical indicators. and do not give any stability in times of crises. There are, however, many ways to achieve integration maturity prior accession. First and foremost, an in-depth structural analysis is needed in order to map out the comparative advantages of a certain economy. Moreover, a country cannot succeed without strong local enterprises and without skilled workforce. Mr. Nagy showcased the Hungarian example on integration maturity. The country was not economically and thus, had to experience the negative effects after becoming a member. One notable example is the Hungarian agriculture: the sugar industry completely disappeared as it was not prepared for the single market and for the high level of competition. For Kosovo, the lesson learned from this example is clear: the country needs a strong entrepreneurial sector and needs to increase the competitiveness of their local products. More importantly, these should be achieved prior to joining the EU. For this purpose, as Mr. Nagy pointed it out, Kosovo needs foreign investments that have value-added local content. Furthermore, more emphasis should be put to vocational and language education, infrastructural development, digitalisation as well as to the creation of a stable economic sphere. In sum, joining the single market and the EU as quickly as a state can has only short-term (political) benefits. The case of Hungary proves that the lack of integration maturity before accession bears with significant long-term economic consequences.

In his presentation, Ambassador Oszkár Füzes, Chief EU integration adviser to the Kosovan Government discussed the everyday function of the EU from experience of Budapest. Inside the EU, the current 28 Member States are driven by their self-interests and consequently, smaller states – just like Hungary – need to learn how to have their voices heard. Although it is undoubtful that the EU wants Kosovo as its member, the country needs to prepare in advance to the everyday challenges of being part of the EU family. Mr. Füzes offered four strategies (“clusters”) that can help Pristina to be more efficient in terms in this regard. Firstly, high-level politicians must define what the national consensus is. That means, they need to identify what the country wants – their interests – and then they must find allies that share the same goals. Secondly, Kosovo needs good policy experts in the most important fields, like agriculture, finances, economy and foreign policy. It is inevitable even before accession to have a core group of well-prepared experts. Thirdly, Kosovo needs so-called “networking people” (academics, journalists, media personalities, lobbysts) all around the Western Balkans and in the EU too. Their job is to keep Kosovo’s interests on the table. They need to convince the Member states: Kosovo will not be a burden but an asset to the EU. Fourthly, Mr. Füzes described the EU as the “union of lawyers”. Thus, what the country needs is well-trained and specialized lawyers who can take a stand for Kosovo’s interests at the EU level. He also pointed out that the first years as full-fledged members are difficult and building alliances are crucial. The main takeaway is that Pristina needs to make other states interested in Kosovo and its agenda.

The presentation of Agro-economist György Raskó dealt with the positive and negative sides of Hungary’s EU accession from the side of the agriculture. Agriculture, especially the food industry always had a high share in the Hungarian economy and during accession talks, the country managed to obtain the highest subsidies from the EU. Owing to this success, the common agricultural policy (CAP) made the farmers’ income high and renewed production technologies. EU membership thus can be considered as a golden era, pointed out Mr. Raskó. On the other hand, Budapest needed to face the negative consequences of the membership that should have been tackled prior to its accession. After 2004, a huge overproduction crisis occurred and in the same time, prices dropped significantly.  In addition, the country lost its self-sufficient character in many food industry areas and as a result, import increased significantly. Moreover, it turned out that animal husbandry was not competitive in the single market either. Mr. Raskó stressed that this should serve as a warning and Pristina must analyse the local economy’s weaknesses before joining the EU. As the EU is not a production-driven entity in the field of agriculture, Kosovo must be prepared for the negative consequences in advance. As the Hungarian example underlines, the ultimate winners are domestic consumers and landowners. Therefore, Kosovo needs professionals in agricultural policy and farmers must be convinced that they need improvements and improve efficiency. In conclusion, agriculture is one of the key policy areas where Kosovo can make significant steps prior accession.

The presentations were followed by a lively discussion on the topics of economic readiness, agricultural policy and Hungary’s know-hows. Participants and panellists concluded: Kosovo needs to prepare for joining the EU and single market in advance. This statement is especially true to the agricultural sector: technological improvements, a higher level of productivity and labour force are necessary. In this regard, Hungary’s first-hand experience can help Kosovo in practice. The audience expressed its hope that more programs and initiatives with the focus on agricultural policy would follow the conference.