ONE OF THE FIRST STEPS AFTER BREXIT MUST BE THE REFORM OF THE EU BUDGET

As always, Hungarian Spectrum welcomes democratic voices from and about Hungary. Today András Lukács, President of the Hungarian NGO Clean Air Action Group (Levegő Munkacsoport) and Board Member of Green Budget Europe, presents his opinion, in the wake of the Brexit referendum, of the role of EU funds in the rise of Eurosceptism. He also offers some possible solutions.

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 The results of the Brexit referendum strengthened the conviction of all those who think that profound changes in the European Union are necessary to stop and reverse the rise of populist parties with Eurosceptic and, in some cases, even Europhobic agendas. It is hardly an unfounded opinion that if the governance of the EU is not changed radically, then even the mere existence of the EU is put at risk.

One of the main drivers of Eurosceptism is the way EU money has been used. It is telling that, according to a recent representative opinion poll, 61 percent of those surveyed in the Czech Republic, a net recipient of European funds, believe that the EU member countries should get along financially by their own means, i.e. wealthy member countries should not support poorer ones. I know of no similar survey in Hungary, but I do know that there is a widespread opinion here that EU money has led to serious problems. Many are even convinced that EU funds cause more harm to the country than good. For example, speaking at a conference in May this year, Zsombor Essősy, CEO of MAPI Hungarian Development Agency Corp., “The Expert of EU and Domestic Funds” (as it is described on MAPI’s website), stated the following: “If our country spends EU money following the present trends and framework, this might cause the biggest tragedy of Hungary.”

According to a detailed study on the topic by Hétfa Alapítvány, the use of EU money in other countries does not seem to be more efficient than in Hungary. Having spoken to quite a few people dealing with the issue in other net recepient countries, I am not surprised by this conclusion.

Along with others, our organization, the Clean Air Action Group (Levegő Munkacsoport), analyzed the reasons for such a perverse use of EU money. Here I will summarize just a few of these reasons, described in detail in our report.

EU funds are distributed to companies in a way that seriously distorts the market. Many companies make an enormous effort to receive as much EU money as possible in order to gain a competitive advantage, instead of improving their products or services. This situation is also a serious threat to democracy because practically no business group would be willing to criticize the government for fear of not receiving public money.

A substantial amount of EU money has been spent to support the construction of new hotels. Even the Hungarian Hotel Association expressed strong criticism of state subsidies for hotel construction, emphasizing that existing hotels often struggle for survival. Such results of EU funding are characteristic not only of the hotel industry but practically all sectors of the Hungarian economy. Photo by András Lukács

A substantial amount of EU money has been spent to support the construction of new hotels. Even the Hungarian Hotel Association expressed strong criticism of state subsidies for hotel construction, emphasizing that existing hotels often struggle for survival. Such results of EU funding are characteristic not only of the hotel industry but practically all sectors of the Hungarian economy. Photo by András Lukács

The present system of distributing EU funds is also a hotbed of corruption. Free money irresistibly attracts all those looking to get rich (or much richer) within a short time by illegal or semi-legal means. These circles do everything they can to capture the national and local governments, and, as practice proves, they often succeed. (This has been described in detail, for example, in studies by Transparency International Hungary.)

Another driving force behind the ill use of EU money is the endeavor of the government to spend every last cent, rendering the efficiency of spending much less important. Coupled with corruption and other factors, this leads—among others—to investments that are not really necessary, or do not represent the most efficient way to spend public money in a given period of time. Furthermore, even if the investment can be justified and even if there is no corruption behind it, it is often implemented in a very wasteful manner because it is financed with “free money.”

A new brandy distillery built with EU money. A World Health Organisation report (as summarized by 247wallst.com) states: “No country had a higher rate of alcohol use disorders than Hungary, where 19.3% of the population abused alcohol in some form. As many as 32.2% of Hungarian men and 6.8% of women suffered from alcohol use disorders, the highest among countries reviewed.” Photo by András Lukács

A new brandy distillery built with EU money. A World Health Organisation report (as summarized by 247wallst.com) states: “No country had a higher rate of alcohol use disorders than Hungary, where 19.3% of the population abused alcohol in some form. As many as 32.2% of Hungarian men and 6.8% of women suffered from alcohol use disorders, the highest among countries reviewed.” Photo by András Lukács

In our report, besides describing the situation, we also made concrete proposals to the European Commission and governments of EU member states to remedy the situation. The main points are the following.

In the Treaty of Accession, all EU member states declared: “Our common wish is to make Europe a continent of democracy, freedom, peace and progress. The Union will remain determined to avoid new dividing lines in Europe and to promote stability and prosperity within and beyond the new borders of the Union. We are looking forward to working together in our joint endeavor to accomplish these goals.” In our understanding, this means that all member states will improve their legislative and institutional systems as much as possible in order to achieve these goals, but at least they will refrain from any backward measures. Therefore, it must be stipulated that member states repeal all legislative and institutional measures that have been adopted by the given member state since its accession to the EU that contradict the principle of non-retrogression as far as “working together in our joint endeavor to accomplish these goals” is concerned.

The European Commission must demand that the Hungarian government implement all possible best practice measures within a reasonable time to reduce corruption and other malfeasances. In our opinion, this is a measure that would fully comply with EU legislation. The European Parliament also called for measures “to be implemented right across the spectrum of EU policies, and for action not just in response to cases of fraud but also to prevent them.”

The Commission should require strict implementation of the European code of conduct on partnership in the framework of the European Structural and Investment Fund. According to the code, the governments of the member states must closely cooperate with “bodies representing civil society at national, regional and local levels throughout the whole program cycle consisting of preparation, implementation, monitoring and evaluation.” However, the Hungarian government has been doing just the opposite.

The fulfilment of the National Reform Program (NRP) and of the Country-Specific Recommendations (CSRs) should be the main criteria for the assessment of the efficiency of the use of EU funds, and not the success or failure of individual projects or groups of projects. The European Commission should strictly control the former, and not the latter. (The NRP is a document that presents the policies of the member country, which aim to achive the targets set forth in the EU’s Europe 2020 Strategy. The CSRs are the yearly assessments by the Commission on the progress of each member state towards achieving these targets, and they include recommendations for improving the country’s performance.) The NRPs and CSRs are approved by the governments of the member countries as well, thus they are binding commitments for these governments. In spite of this, the Hungarian government is generally doing just the opposite of what it committed itself to in these documents. This is well known to the European institutions concerned; for example, an assessment by the Economic Governance Support Unit of the European Parliament came to the conclusion that in 2014 only Bulgaria and Hungary made no meaningful progress in implementing any of the recommendations.

The EU should give all EU funds, destined for national purposes, directly to the national governments, without any requirements for the precise use of these funds, i.e. each national government should decide that for itself. On the other hand, in the event that a country does not comply with the above requirements, EU funding must be partly or completely suspended until it comes into full compliance. We believe that this is not only legally possible even today, but it is an explicit duty of the European Commission: according to EU legislation it is the Commission’s task to protect the EU’s financial interests.

I strongly believe that it is absolutely necessary to provide EU funds to the less developed member states with the goal of improving their economic well-being as well as their political stability in order to strengthen the EU as a whole and to make it more competitive globally. But EU taxpayers’ money must be used for this purpose, not against it.

June 27, 2016
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Roderick Beck
Guest

“The EU should give all EU funds, destined for national purposes, directly to the national governments, without any requirements for the precise use of these funds, i.e. each national government should decide that for itself.”

Where is the oversight and how does one stop EU development funds disappearing into the general budget?

Guest

London Calling!

First and foremost the EU must set up an independent – and effective – Audit function that works.

It must visit EVERY one of the EU countries ANNUALLY – to do a full audit and ensure the values and rules are being implemented fairly.

Any significant audit issue must be cleared up as a contingency before receiving ANY further funds.

Tenders that fail the transparency test must receive no funds. Contracts must conform to an ‘average cost’ algorithm that factors in every EU project. Any project deviating from the norm by more than 2% s is revoked – no funding.

The three strikes and you’re out rule should apply too.

The EU has no concept of safeguarding and protecting projects from ‘Bunda’. They have been so loose with their own funds – they themselves haven’t been audited for decades – that they overlook any misuse at all

They only investigate corruption AFTER the event – so they need to allocate more resources to the auditing function and audit throughout the lifetime of a project.

They might then understand that they need to look after other country’s funds properly.

But they need to audit themselves first.

Ron
Guest

The audit is fine, and I agree with you that more need to be done about audit issues. So far these issues and clear cases of fraud are reported to …..Peter Polt. He bury these files in his huge drawer.

Guest
Completely O/T The political fallout continues here – with the opposition party engaging in a bloody internecine warfare. The opposition Labour party are tearing themselves apart. On 23 June in my disappointed anger I wrote: “It’s wasn’t Johnson – “It Was Corbyn What Won It” His half-hearted endorsement of the EU (“7½ out if 10”) and his failure to motivate all those new young idealistic voters he attracted – and his sheer lack of competence in leadership are, for me, the single factor that could have produced a different result. There is civil war in the Tory party now. But nothing like what will happen in the Labour party. My post was spot on – the shadow cabinet are resigning before they can be replaced, for these very reasons. Cameron joked to a newly sworn-in MP to keep her mobile on in case she’s needed for the cabinet! This was contradicted by a poster who I only read if directly challenged – otherwise the posts are ‘persona non reada’. This: “Are you completely mad? The Tories created this situation (assisted by the Liberals), Labour and Corbyn had nothing to do with it. And yet you blame Corbyn? He has actually… Read more »
bimbi
Guest

Alas, Charlie doth too much like his own posts, especially if they are in BOLD. But in any way blaming Mr. Corbyn for the “Leave” victory is just stupid – sorry Charlie – even though a large part of the ex-shadow cabinet is touting that line (a side nod here to Blairites and the famous, unbiased British press).

The cartoonist Rowson in the Guardian frequently features in his work a fur cup and the present Brexit “fur cup” belongs wholly and completely to Mr. Cameron and the Tories. Now we have the real possibility of having a man fired as a journalist from the Times for fabrication (lying) and who utterly lacks policy – see BoJo’s (Bori Johnson’s) “policy platform” as published in the Telegraph yesterday – as prime minister as well as the potential break-up of the United Kingdom, and Charlie places this at Mr. Corbyn’s door!! Hey Charlie, write less and think more – engage brain before touching keyboard.

Guest
You weren’t immersed in it like we were. I welcome your analysis – I’ve observed and have been immersed in English politics all my life – actually as an informed Guardian reader for 35 years – buying and having delivered it to my door. I have had many of my letters published. Not the sole input to my ‘diet’ as we have the excellent Channel 4, Radio 4 and the World Service It is just an indication of how I have watched politics evolve – but as a realist. Brain needed yes – but knowledge and memory too. I note your arrogance. One of the problems I have with Eva’s blog – and it is not a problem because this is Hungarian Spectrum, is the number of people on here who try to explain English politics from a position of naïvity and ignorance – from afar. It is undoubtedly the case that the Labour part has been hijacked by the youth social media – naïve and ignorant of real politic. The youth vote turnout was very low – except in University towns – some have the temerity to suggest people over 45 should not vote as it’s the Young’s future… Read more »
Guest

I don’t claim to be an expert on British politics – though I’ve been reading the Guardian too for a long time and also liberal sites like this which has something very negative to say about Corbyn’s people:
http://liberalengland.blogspot.hu/2016/06/how-seumas-milne-undermined-labour.html

A bit OT:
Whose revenge was it – Iceland throwing England out in the tournament?
Everybody’s laughing at “Little England” – maybe parliament can and will reverse the Leave! decision?

British politics nowadays looks as crazy/bad as Hungarian politics – or as funny, depending on your involvment

Guest

A long as you understand that Marina Hyde’s view is just one view of many – as is yours, of course.

And not necessarily the correct view.

bimbi
Guest
Gosh Charlie, for a guy who claims to “prefer[s] humour to rudeness”, you sure put on a good show of the latter, in the absence of the former. As to “arrogance” (now you are getting really rude), you seem happy to unload on me without knowing a thing about me [but who, or where, I am is irrelevant, just read my words]. And while we are at it, let us read some of your words: On 23 June in my disappointed anger I wrote: “It’s wasn’t Johnson – “It Was Corbyn What Won It” His half-hearted endorsement of the EU (“7½ out if 10”) and his failure to motivate all those new young idealistic voters he attracted – and his sheer lack of competence in leadership are, for me, the single factor that could have produced a different result. It sure looks as if you are blaming Mr. Corbyn for the “Leave” victory in the referendum and notwithstanding your “disappointed anger” (hence, “engage brain before touching keyboard”) saying such a thing is just plain stupid. You will just have to live with it Charlie even if you did deliver the Guardian to yourself. But you could have apologized… Maybe if… Read more »
Guest

You say I must put ‘brain in gear’?

I said the “biggest single factor that could have produced a different result…….”

I am not blaming Corbyn.

You might just note what I said correctly.

If someone else had written it I would have said it’s a statement of the Bleedin’Obvious.

It is a simple result of intelligent analysis which I do not claim a monopoly on.

If there is any blame to be apportioned then it is at Cameron’s door – Bleedin’Obvious (2).

What I said was independent from whatever your situation is.

To process and analyse a post properly – you have to have a brain in the first place.

Guest

Please do have the last word – I know when the signs of diminishing returns make it worthless persuing this path.

bimbi
Guest
Charlie does it again: I said the “biggest single factor that could have produced a different result…….” And you still got it wrong! It is nothing to do with Corbyn. The “biggest single factor” that you speak of can only be the “Remain” campaign getting more votes than the “Leave” campaign. Votes do not come with little flags saying, “Youth for Corbyn vote” on them. Sorry, Big C. it is still stupid. Then we read: “What I said was independent from whatever your situation is.” No it is not. You were deliberately and gratuitously insulting when you then wrote: “One of the problems I have with Eva’s blog – and it is not a problem because this is Hungarian Spectrum, is the number of people on here who try to explain English politics from a position of naïvity and ignorance – from afar.” This was clearly aimed at me because the post was in reply to one of mine. You must work for the BBC, Charlie, charged with the task of Bringing Britain to the World, but there you are being stupid again anyway. And finally: “To process and analyse a post properly – you have to have a brain… Read more »
webber
Guest

There are several articles in The Guardian and The Telegraph saying that Corbyn did not campaign adequately against Brexit. According to some papers The Telegraph claims to have seen, Corbyn was not only reluctant to campaign against Brexit, he actually cancelled several appearances at Remain events at the last minute.

And both newspapers remind readers that back in the day, ages ago, Corbyn was one of the old Labour leaders to vote against entering the EU. He is, apparently, still anti-EU. Both The Telegraph and Guardian agree on that, and those two dailies agree on almost nothing.

I know this is a surprise to most Europeans, but in Britain there is an old hardcore in the Labour Party that is anti-EU, that sees the EU as a form of globalizing horror.

So, I think Charlie got it right: or, at least, his position is not out of line with mainstream thinking.

I personally now think Corbyn is deranged. He refuses to resign though he just overwhelmingly lost a vote of confidence. Can you imagine what a man with his ego would be like as PM??

pappp
Guest
Webber, I agree with your assessment, but not entirely. It was clear before the campaign that Corbyn is really anti-EU on basic, leftist, anti-capitalism grounds. The EU indeed was originally conceived as the common market. It was also clear that the Labour did not really campaign – of course if it did actively campaign (associate with one side ) and then lost it would’ve been bad politically (ending up as a ‘loser’ again, after the general elections). But the fundamental issue was Corbyn’s anti-EU stance. He is an old-school anti-capitalist leftist when most of the European left accepted capitalism. That said, we see that the mainstream capitalist left-wing is being squeezed in many European places (between the rise of the populist right, the relative stability of the mainstream right and the rise in many places of the new left such as Podemos or Syriza). Also many people, in traditional rural Labour heartlands voted for Leave. Thus it’s not entirely clear that a pro-EU, “new Labour” ideology could again prevail in the UK. Corbyn was elected by the membership, by a huge margin, he is popular among the Labour party members. One of the reasons why Le Pen etc. are so… Read more »
petofi
Guest

I see now Corbyn getting a lot of heat. I’m not sure where I would be on the Brexit question were I a Brit, but seeing 200,000 Hungaricoes running amok would scare the bejesus out of me, too. I probably would’ve voted ‘leave’ too, just to get those mammy-jammies back behind the iron curtain and back in Magyarland…

webber
Guest

The problem with your narrative is that the voters who supported Corbyn are, mostly, young, and the voters who supported Corbyn also, mostly, supported the Remain campaign. Young people did not know of Corbyn’s anti-EU stance, because it was not a factor when he was elected, and mainstream young leftists (even in Britain) have a hard time imagining a leftist who could be anti-EU .

This is one of the sources of anger with Corbyn. People who supported him wanted to stay in the EU, and (very wrongly) assumed he did too.

I personally see no contradiction between leftism and an anti-EU stance. It is logical. But then, I am not young.

pappp
Guest

You’ve got a point with the younger voters.

1956
Guest

Charlie, you have contributed lots of good observation, but you must to cleanse your thinking of accidental disinformations. You have studied English news all your life. Are you sure that you have filtered out all disinformation? The British reporters and journalists are just average people. The BBC let many mediocre individuals on the air. We need a good feel for the ongoing maneuverings. The Hungarian Spectrum needs more renaissance thinkers. like Petofi.

webber
Guest

Those hotels are often built by a coalition of German and Hungarian firms.
Quite a lot of the EU’s elites are getting something out of this waste of funds.

Guest

Crazy state of affairs there. People are in the streets complaining about education money stuck somewhere in a pipeline that is blocked up. And hotels and distilleries seem to get priority as a result of all that ‘free money’ given. If the talk is about priorities, money for education appears to get short shrift in a country that traverses that road of inequality in its relationship to the EU and its states.

VO unfortunately has warped the country into a sort of receiving a ‘free’ financial addiction where priorities seem to be askew. More should be done in taking the long view that it’s better to learn to know how to fish rather than getting handed bellies fish – full from the EU ‘fishermen’.

petofi
Guest

Outsiders–those not in Hungary–are continually mesmerized by Orban’s popularity. They don’t understand: Orban represents the Hungarian ideal of slip-slidding and high jiving the hapless foreigners (be they Brussels or Yanks) to be given things gratis and for free. Orban’s high success at this game endears him to all Hungarians–country folk or city sophisticates–who secretly wish themselves similar successes.

Gyurcsany can keep mouthing the right words but the fact is this: if you can’t change the norms and values by which Hungarians operate, you’ll never see a change. For sure, unless future politicians will be forced to forego ‘mutyi’ and influence-peddling and gross corruption, nothing will change. In order for that to come about, you need a sea-change in political behaviours. To start the ball rolling, if Gyurcsany wants to be serious about changing ways, the DK politicians (and whoever sides with them) must be forced to sign a PROBITY CLAUSE, as I have outlined several times before. To whit, a corruption case against such a politician would put the wealth and family domicile at risk, too.

Istvan
Guest
Webber is very insightful in his post about the over building of hotels in Hungary. Really it’s a profound over investment in tourism in general on a world scale. It’s so profound that there are places where this capacity simply sits largely empty, Egypt for example (http://www.bloomberg.com/news/articles/2016-02-01/egypt-resorts-become-ghost-towns-as-tourist-arrivals-plummet ), and even in Mexico where Acapulco has collapsed (http://www.thedailybeast.com/articles/2016/03/05/acapulco-tourist-mecca-and-cartel-murder-capital.html ), here in Chicago our tourism industry is attempting to avoid fears of violence by marketing (http://www.chicagotribune.com/business/ct-chicago-tourism-image-0112-biz-20160112-story.html ). Urban tourism is worldwide is a market of false hope in my opinion, it’s a substitute for other sources of income that have fallen away with deindustrialization—or as a chance to participate in the purchasing power of wealthy cultures. Just the other day I ran into a Hungarian family shopping in Bloomingdales here in Chicago. I asked them how they dealt with the VAT bringing back their designer clothing? They said they throw away all clothing brought from Hungary and wear everything they buy abroad at least once. Rational irrationality maybe? Indeed city trips have been among the most stable segments of the tourism industry on a world scale. They also have a function according to academics “that far exceeds economic gains: the image, the… Read more »
Guest

A bit OT re shopping in the USA:

My wife and I also did a lot of shopping on our regular yearly trips to the USA – we were lucky, the € was around 1.40 to 1.50$ until 2012!

And 430€ per person is duty free from the USA to the EU, on another 700€ you pay just 17.5% VAT (at least in Germany).

And prices in the outlets were ridiculously low compared to European prices for Levis, Wrangler, Lee etc – I calculated once that we paid around 14$ (i e 10 €) per “item”: Western shirts (with snap buttons), jeans, wonderful blouses in Western style for my wife – and the rest of the family in Hungary and in Germany! 🙂
We would have paid at least 40€ in the outlets in Germany …

Once we even bought an additional suitcase and paid 50$ for the extra luggage – it was totally worth it!

PS:
Mywife also enjoyed those US outlet malls like Sawgrass Mills near Ft Lauderdale or the Canadian one in Niagara Falls and many more …

webber
Guest

Wolfi – the situation has not changed. If you visit one of the US states without sales tax (VAT), things are even better. Those states are Delaware, Montana, New Hampshire, and Oregon. Visit one of those states, and buy something such as a laptop, and you’ll see that the price difference is simply stunning (bring the laptop back in a carry-on without the boxes and tags, as a personal item, and customs will leave you be). British friends laugh, literally, when they see the difference in prices.
As to clothing, one can easily buy brand new t-shirts for children in those states for $2 (take all tags off clothing, and again customs won’t bother you – they are no longer “new” without tags)

Guest

Good for you! Curious if you saw ‘street sales’ on Rolex watches….;-)….

webber
Guest

For street sales on “Rolex” watches, “Puma” sports gear, and “Armani” sun glasses, I suggest you visit Naples or Mallorca. Indeed, visit almost any Italian or Spanish city with a port.

I think you missed Wolfi’s point, and guess you haven’t visited the US.
Prices of authentic brand-name clothing in the US are incredibly low.

Just think about it – Sales Tax (AFA/VAT) in Hungary is what? 27%?

In Montana it is 0.

In California it is 7.5%, and that is considered high by American standards.

Then factor in differences in other costs. Think of the price of petrol in the US compared with Hungary – it costs about 4 times more in Hungary than in your average US state (what Hungarians pay per liter is what Americans pay per gallon). Why is it so much cheaper in the US? Lower taxes, mostly.

Lower petrol costs, lower transportation costs. Lower transportation costs, lower retail costs.

Guest

No, I’m not into fakes – those were official Levis, Wrangler etc outlets where they just try to get rid of surplus stuff …

Sometimes we even found “vintage” jeans etc – my wife was so happy!

And she used to work in a boutique in Hungary and helped her boss with buying (In Lodz in Poland btw, that’s where the stuff from China arrives …) so she can tell the quality just by feeling/rubbing the material …

But enough OT – I’m really unsure about what will happen in Europe!

If the English decide to “go it alone” they’re finished imho – even if Charlie thinks differently.

webber
Guest

I don’t think the English are kaput.

Wolfi, there is a whole world outside the EU, and a lot of that world is doing just fine, thank you. There are even bits of it in Europe (Norway, Switzerland).

This is a bit nasty of me, but the idea that “it’s all over, it’s ruined forever, we should just throw it all away” is a bit European. Not German. European. I say not German, because Berlin has been surprisingly good recently, in my view, of muddling through – in making the adjustments necessary to make things work.

I am positive that the English can make things work, too. Of course adjustments will be necessary. A lot of them. But I am confident they can make them.

There will be a lot of turbulence until they do, though. They need a responsible government to start making those adjustments, now. Not tomorrow. Not in November. Now.

petofi
Guest

All those suggesting that Britain is ‘done’ forget one thing: if need be, the US will throw several lifelines to the Brits in the way of preferential trade deals and the like.

The Brits backed the US well in the last 20 years, and the Yanks will not forget that.

Guest

Yes, Donald and Boris, what a nice team …

Guest

Webber, your examples aren’t really comparable to England:
Norway, Switzerland are very well connected to the EU and work together with it – just see Schengen, which GB was never a part of, I’m still angry at that personally, having travelled to London so often.

When I wrote “finished” I meant that England is finished as a world power – it will be as (in)significant/irrelevant alone as say Hungary or Poland!

And the way that Cameron is behaving right now is laughable – why doesn’t parliament switch him off?

He asked in Brussels for some “Extrawurst” – showed himself to be an idiot again!
And of course the other EU politicians were laughing at him and telling him “No”!

Guest

Re: ‘urban tourism …market of false hope’..

You know I have to add a market for corruption as well as seeing some tourists as pigeons to be plucked. That must put a couple of bucks in the pockets of the underground economy.

And Magyarorszag’s concern for law is high when it comes to dealing with the turistas who try to bend it while on their holiday. Best if one goes with at least just a little of the ‘hoagy vuggy’ language where the mouth and tongue go into contortions that never were tried before.

webber
Guest

Istvan, I couldn’t agree more. For those who want to see what this over-investment means in Hungary, visit the “Dunakanyar” – and specifically Visegrad. There are a half dozen massive new hotels standing mostly empty, all funded by the EU. Private individuals and corporations had hotels built with EU funds. It is simply a gift of public funds to private hotel owners. It is sickening.
The old mom-and-pop pensions in Visegrad have mostly gone bankrupt. The medium-sized ones, in gorgeous Habsburg-era buildings, are either for sale and still operating or are closed and rotting. The new hotels are, needless to say, horribly ugly compared with the old ones.

Member

Part of the reason for brexit is due to the existence of Fidesz. When a national government, within the EU, is so overtly corrupt; yet still receives billions of euro’s of other countries money, with no ongoing-monitoring of who receives those funds and why, it inflames the argument.

A net beneficiary of EU funding such as Hungary needs to be under special, international monitoring, to stop blatant abuses i.e. fake government tender processes — Elios lighting, Istvan Tiborcz.

Those who embezzle international money should be tried in an international court. This is the only way to side step Orban and his circle from their currently correct belief, as to being untouchable, due to their creation of the EU’s first mafia run state.

Guest
Budapest Callling, great idea to take Orbán to court for fraud and embezzelment! I have been saying for years that the EU should send foreign auditors to Hungary, but unlike the commentator who suggested they come once a year to check up on how the funds are being used, the EU, with its wasteful use of cash, could easily invest in placing an auditor here, with offices, to keep an eye on things every day and in every town and county! This should not be difficult. If an auditor visited once a year, our clever little Orbi could and would find a means to fix the books between the visits. We need someone here, on the spot, out on the job everywhere, and every day. The level of corruption starting from Orbán and his family down to his lowest minions, is at last being addressed. It is a shame that it has taken the UK exit for the EU to wake up. I suspect that this is why “Ordibálo Orbán” is so unusually quiet these days, viz Brexit. He knows his number is up and that he might be facing not just a reduction in his personal income from the… Read more »
petofi
Guest

You know that little auditor you suggest…he would meet with
an unfortunate accident in less than a week on post-

pappp
Guest
“The EU should give all EU funds, destined for national purposes, directly to the national governments, without any requirements for the precise use of these funds”. That is a very controversial idea, one that should be debated. Politicians will find a way to continue to steal anyway. In development studies such direct transfers usually end in corruption, the last such famous example was Malawi, for those who are interested in such things. But for example just a few days ago the Hungarian taxpayers donated HUF 7bn (!) to the Hungarian energy drink producer Hell to build a new production facility in BAZ county and you can bet that at least 20% of it went directly into Fidesz pockets. No EU funding was involved. Moreover the EU subsidies actually, as a matter of economics, already support the state budget directly. Basically the political decision was to prefer in the budget the support of existing, important constituencies (pensioners and tax-paying middle class voters) and hold off any investment until and unless EU funding can be found. That said, I would restrict EU funding to basic infrastructure (railways, roads, water treatment and a few other things). There is no reason why the EU… Read more »
bimbi
Guest
This summary by András Lukács is a timely but sad view of the EU and its system of governance and financial supervision (does it have a system of financial supervision?). To put the matter bluntly very many people – and certainly many in England – see the EU as bureaucratically constipated and utterly unable to get itself in motion on important issues. This view in turn has lead to a lack of confidence and a feeling of impotence of those who have to watch this huge machine grinding along – to where? No one knows. I am sure that that the widespread rejection of the EU as shown by the “Leave” millions in Britain resulted in part from this perception. But now, what happens? Fussy Mr. Juncker suddenly gets himself in gear and wants to usher the UK out the door in two weeks, but he knows Article 50 with its two-year time frame, so this is just pathetic grandstanding. Further, France and Italy now urgently talk of “reform” – when was that even on the table before the Brexit vote? And the Franco-Italian talks on “closer political union” are not going anywhere either – just ask the prime ministers… Read more »
Guest

Bimbi, you sure know as well as I that Britain was largely responsible for the slow movement in the EU, anything that would have made the EU stronger was voted down by them – just read the Guardian comment that I linked to.

And many people I know are thinking on similar lines – without the Brits the EU can develop in the direction of better integration! That’s why many are rejoicing now: F*ck off, little England!

PS:
I personally don’t feel like that and still hope that parliament will overthrow the non-binding referendum!

Guest

A scathing comment in the Guardian sums it up in my eyes:
The problem was bad faith and delusional thinking. As the referendum debate has shown, the country has not come to terms with its own global irrelevance – hence its refusal to pool sovereignty.
https://www.theguardian.com/commentisfree/2016/jun/28/brexit-great-news-eu-britain-sovereignty

Guest

London Calling!

Democracy in the EU in action!

Juncker has forbidden any commissioner from making contact with anyone in the UK government.

Merkel has ‘verboten’ any informal talks with the British.

I have often said on here that each of us has the power of our vote – and dialogue – as a basic tenet of democracy. And we are all equals.

Maybe this explains how Hungary has been allowed to fester for so long.

webber
Guest

I despise Merkel, but she is right to say that until the EU gets formal notice from the British government that Britain is leaving the EU, there can be no negotiations whatsoever.

The ball is in London’s court. Cameron saying that it is up to the next government is fouling things up, again, as he has done so well so far. That makes it clear that no negotiation with the current government will be binding. Even just talking with this interim government would be futile – Cameron says they cannot make a decision on Europe. HE has excluded negotiations with his government. Merkel has just taken note of his decision.

In my view, Cameron should clear out as soon as possible to let the next government form. Today, if possible. I don’t know why he doesn’t resign now. PMs might die in office, after all, and that would be a similar situation. Cameron has effectively died politically. His corpse should leave the pulpit.

Without a British government that can negotiate, Brussels cannot negotiate and should not even try.

That is democratic, in truth.

petofi
Guest

@webber

I haven’t the foggiest why you would ‘despise’ Merkel. She’s an admirable person. If you need proof, just remember how nonchalantly she dealt with the Viktor on her visit to Budapest.

Why are people blaming the Germans?
This puts me in mind of a reported complaint from some French politico three or four years ago: the Germans save their money and don’t spend enough.

Isn’t that what good little Christians are supposed to do?

webber
Guest

I also don’t know why anyone would blame the Germans for anything related to Brexit.

My feelings toward Merkel are rather irrelevant to the topic of this blog, so I won’t go into them except to say my dislike of her politics go back to, roughly, 2009. She may be a perfectly charming person, for all I know. I just wish she weren’t Germany’s leader.

I’m surprised you liked how she dealt with Viktor. I didn’t, and don’t. How many Euros have been withheld from Viktor for abuses so far? Hmmm? (Nothing to do with Merkel?) Why is it that the State Department is so much more critical of Orban than Berlin?

I’m revolted by Merkel’s kid gloves – the ones she wears when she meets Orban, and Erdogan. Sickened by them.

webber
Guest

There is a fundamental problem with such very high levels state funding, one pointed out by members of the Austrian School of economists: the fault of planning. Above a certain level of state investment in certain vital sectors (such as in health or education), no matter how well state officials plan, they cannot predict what investments will be worthwhile. The market changes are too unpredictable, and bureaucrats are very bad at seeing them. Thirty years ago investing in hotels in Europe was a good idea. The market might have sorted that out. But instead, because it was a good idea, Brussels and a few national governments (Madrid, for example) decided to throw money at it.

Has anyone else visited Spain recently? There are empty hotels, even unfinished rotting hotels up and down the Costa del Sol. And by god, a lot of formerly beautiful land is blighted by unnecessary development – so much, that I think parts of the coast that were once beautiful are now ugly, and not worth visiting.

Rather like parts of Balaton, come to think of it.

Guest

Even here in Hévíz there are a lot of unfinished or deserted hotels, restaurants and apartmenthouses, although business is booming – they just built too many of them and competition is heavy.

And those ruins of hotels and apartment complexes you also find in the Canary islands along the beautiful coasts – it’s a real shame!

And don’t even think about Greece!

Observer
Guest

One of the easiest ways to reduce the number of silly projects is to require larger recipient share in cash. The practice of EU funding 95-96% is nonsense as it’s an irresistible invitation to a corruption party.
Current control / audits will help too.
Finally, real, working sanctions, including criminal charges.

petofi
Guest

“…EU funding 95-96%…”

Ah but your ‘green’, Mr. Observer, and don’t know the ways of sly Hungarians. In fact, the funding is probably 300-350% of the projected costs. Hungaricoes like a hefty cushion. Their cost overruns are legendary. In fact, they like a 2000% profit
on their mandated participation even before anything has begun!

Hungarians–oh so clever; oh so corrupt.

Observer
Guest

Petofi,
I can tell stories about overpricing for hours, see Jozef Debreceni’s A polika fertője, or the Transparency Int study which very, very conservatively estimates that 80% of all projects include kickbacks. But the reality is much worse, eg. Agrarian Chamber ‘s website price was 155 millió Ft while the market one would have been 1.5 or less.

petofi
Guest

Observer,
There you have it.
Believe what Hungaricoes–individuals or governments–say at your own risk.

The problem with the Church in bed with government is that no ethical rudder remains for the country whatever.
Everything is a ‘go’. And, in consequence, legality falls by the wayside and the ‘rule of brawn’ bubbles to the top.

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