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A sixth variant for the future of the EU

March 23rd, 2017

A conservative economist believes that the EU should allow the governments of less developed countries to intervene in their economies and boost production until they catch up with more developed member states.

In Magyar Nemzet, economist Károly Kiss puts forward a sixth alternative to Jean-Claude Juncker’s five variants of the future structures of the European Union (see BudaPost March 7). Kiss dismisses idealist approaches that interpret European integration as a humanitarian gesture by western Europe to help their eastern neighbours. The single market, he argues, was dictated by economic rationality. Echoing the words of PM Orbán, Kiss thinks that less developed member states receive structural funds as compensation for opening their markets to western European companies and capital. In an aside, Kiss adds that the EU subsidies were earmarked so that the funds could not be used to boost Hungarian production and reduce the market advantage of Western companies. 

As for the future of the EU, Kiss believes that for Hungary, the worst option would be the creation of a United States of Europe. In a centralized federal state, Hungary would lose all its sovereignty and thus all means to boost its economy. As a result, Hungary would become even more peripheral in economic and social terms: it would be hit by mass unemployment, deindustrialization and poverty, Kiss argues. A two-speed Europe would be a far better option for Hungary, he believes. He proposes a sixth option not mentioned by Jean-Claude Juncker, as the ideal variant for Hungary and the Visegrád countries. In Kiss’s version, governments of less developed EU member states would be given the right to actively intervene in their economies to boost production through industrial and export subsidies until they catch up with more developed EU member states.