Transition and integration into the EU Some remarks on the basis of Hungary’s experience Sándor Meisel Institute of World Economics, Centre for Economic and Regional Studies of the Hungarian Academy of Sciences Bratislava, 3 June 2016

Content: facts and question marks Starting point: integration = opening (politics, economy, society, attitudes, mind etc.) But: opportunities and risks

Opportunities: objectives Consolidation of the democratic system Consolidation of market economy Being part of the decisions Access to the internal market, „four freedoms” Balanced and solid economic growth Economic catching up Better environment for FDI Growing welfare

Opportunities: tools Rule of law and stable democratic institutions „checks and balances” Reliable market economy pillars  consolidated institutions  stable and transparent rules  predictability  fair competition  anti-corruption

Opportunities: temptations Unfunded illusions Excessive government spending Economic „nationalism/patriotism”

Facts: democracy Effect of the soft power before membership „We are already in” effect „Illiberalism” Polarisation of the society Populism Lack of solidarity

Facts: economy (+) Substantial inflow of FDI in the 1990s and first half of the 2000s Substantial inflow of EU funds, especially in Re-establishing the Maastricht conform government balance after 2013 Small decrease of the public debt Rather dynamic growth in and Improving unemployment data Low inflation Substantial surplus in trade and current account balance

Facts: economy (-) Extremely strong exposure to the world economic and financial crisis Stagnation ( ) Artificial, „un-ortodox” measures to maintain government balance (extra taxes, pension system etc.) Extension of the state ownership across the economy Substantial withdrawal of financial funds from education, health care, social services

Facts: society Still very low employment rates Improving unemployment data, partly due to public employment and outflow of labour Growing poverty and growing social inequality Neglected education and health Substantial and growing „institutionalised” corruption

Conclusion: some light on the rather dark picture EU integration is a unique framework and opportunity – although with many external and country specific internal risks All depends how a country can profit from medium-term an long-term opportunities Even more depends on the country’s vision of its future (geopolitics, democratic values and system, openness to solidarity, social values, fair and successful economic policy, competitiveness etc.)

Final conclusion Please try to learn from the mistakes of some member states’ practice. Please try to avoid them.

Thank you! Sándor Meisel