'Europa moet crisis met eigen potentieel te lijf gaan' (en)

A major cause of the economic crisis is the uncontrollable increase of state debt, and the remedy is work-driven economy, declared Eniko Gyori i, Minister of State for EU Affairs of the Ministry of Foreign Affairs, at the World Investment Conference held in La Baule, Western France, on 26 May 2011.

At the end of the second day of the conference, the Minister of State summarised and evaluated the recommendations formulated by seven working groups to raise Europe’s attraction in terms of investments. She expressed thanks for her invitation, “an acknowledgement of the Hungarian Presidency’s work and a promising sign towards my country, Hungary, which is making remarkable efforts to transform its economy”. Initially, the Hungarian Government’s measures, such as crisis taxes on the most profitable industries or the review of the pension system, seemed unorthodox from a mainstream policy perspective and caused perplexity.

Changes in Hungary

The first results are now visible: the budget has no need for IMF support, and the international standing of the country has improved, as shown by the multi-billion euro investments of Daimler, Audi and General Motors, explained the Minister of State. These results are also reflected by the annual comparative report of the auditior company Ernst & Young published at the conference in La Baule on 26 May. Accordingly, Ms Gyori formulated her own recommendation for the investors attending the conference: “Come and visit Hungary to see the changes for yourselves”.

The Minister of State reminded that the economic crisis has mainly hit Europe and the western world, partly for demographic reasons: Europe’s population is dwindling and ageing, and the EU is disadvantaged as opposed to nations which have dynamic demographic and employment indexes. Immigration alone is no solution to Europe’s demographic problems. It is preferable to unlock Europe’s own resources, e.g. Roma and further enlargement, Ms Gyori stressed. She reminded that Croatia’s accession is imminent, and with the capture of General Ratko Mladic the Western Balkans has taken another step towards enhancing the European perspective.

Saving the “European dream” at stake

Eniko Gyori mentioned the uncontrollable public debt in several member states, including Hungary, as the primary cause of the crisis. The problem must be remedied: preserving Europe’s attractiveness, saving the “European dream” is at stake, she said. According to the Minister of State, the only solution for both Europe and Hungary should be to create work-driven economy. “We must walk the tightrope running between stability and growth”, said Ms Gyori, adding that the Hungarian Presidency has offered this recipe from the beginning. The Presidency has led negotiations among member states and with the European Parliament to reinforce Europe’s economic governance, the Small Business Act, and the Single Market Act.

“We should stop the relocation of industry outside Europe, not by means of administrative obstacles but rather by measures in favour of an attractive environment”, the Hungarian Minister of State emphasised. She pointed out the increase of employment as an absolute priority, since economic growth makes no sense otherwise. “We should not speak about the end of the crisis until people perceive an improvement in this area”, Ms Gyori said. She also reminded participants of the need to avoid the trap of a “dual” economy, where prosperous multinational companies live together with ailing local SMEs. In this respect, the main role is played by SMEs, the principal employers of Europe, which are less mobile but give a better response to local conditions than multinational companies, Ms Gyori explained.

More Europe in response to crisis

“Strong Europe: our motto encapsulates our belief that the answer to the crisis is more Europe, rather than less Europe, even if, or precisely because, the idea of Europe is less popular in times of crisis, Ms Gyori concluded her speech at the conference in La Baule. Partly in response to comments made at the conference, she said “We need three ‘c’-s: creativity; cooperation between the private players and the public authorities and confidence in governance, ultimately in the European project. The three ‘c’-s will add up to one more ‘c’: the competitiveness of Europe.”