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EU funds frozen

August 17th, 2013

A left-wing commentator thinks the freeze is due to the semi-paralysis of the decision-makers, and predicts therefore that despite State Secretary János Lázár’s vow to overhaul the system of distribution of EU funds, inefficiency and incompetence will continue to rule. A pro-government analyst says Hungary is out of the recession with a meagre GDP growth for the second quarter in a row, but U funds are vital, as more investment – and jobs – will be needed  for the people to benefit.

The EU froze structural and cohesion funds payments on 13 out of 15 operative programmes to Hungary citing irregularities in tenders and administration. In Hungary almost all new investment and infrastructural projects are financed, at least in part, from EU money. Viktor Orbán entrusted János Lázár MP, State Secretary in charge of the Prime Minister’s Office with the task of overseeing the distribution of funds. Lázár at his recent press conference lashed out at “inefficient and lazy” bureaucracies in public administration and the National Development Agency and vowed to completely overhaul the system.

Commenting on the background of Lázár’s promise to clean up and speed up the distribution process of EU funds in Népszabadság, Brigitta Szabó remarks that Hungary was rather slow to start with, but after 2011, but with the leader of the National Development Agency removed and the bureaucracy reshuffled, people had even less incentive and courage to take decisions. Szabó says she appreciates Lázár’s blunt remarks on Hungary’s inefficient system as few government officials would acknowledge that there has been no progress, despite all the promises. But she contends that an atmosphere of threat and fear reigns within the Agency and doubts therefore if the bureaucracy castigated by Lázár can do any better.

In his regular business column in Magyar Hírlap, Csaba Szajlai says Hungary is out of the recession with last quarter’s 0,7% GDP growth – but barely. The EU, and more significantly Germany are in recovery, he continues, and Hungary’s economy is driven by the export deliveries of multinational companies who transfer their profits out of the country while Hungarian SMEs are struggling at best. For ordinary Hungarians to benefit from the upswing, investment should target segments with more qualified labour and higher added value, and this is where EU funds could be of great help.

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