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Experience with and lessons from the first years of EU membership – The Hungarian case

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  • András Inotai

Abstract

The accession of ten new countries to the European Union in May 2004 did not produce any major problem in the everyday functioning of the integration. At the same time, in the new members, no wonder happened either. Most of the negative expectations linked to accession proved unjustified or mainly due to deficiencies in the preparation for membership. The article analysis the impact of accession on growth, inflation, employment, small- and medium-sized companies, regional development, budget and political sovereignty. The main conclusion is that eventual negative developments cannot be linked to EU accession but to home-made economic policy failures in the previous years. Of course, it is always easier to blame external factors, including now Brussels for own mistakes. In other areas, where membership created a new situation, the expected impacts could be identified well in advance (e.g. sovereignty). A separate chapter deals with the two-year balance of accession. Trade with the new member countries shows a dramatic growth, particularly in exports. As a result, the traditional trade deficit turned to a substantial surplus within a period of two years, indicating the (regional) competitiveness of the Hungarian economy. The success of adjustment can be proved by the smooth transposition of EU directives and guidelines related to the internal market. Less promising were Hungarian developments concerning the main objectives of the renewed Lisbon agenda. In turn, Hungarians were successful in applying for higher positions in different EU institutions. Also, level and structure of utilizing EU funds can be considered satisfactory, excepting the delayed direct payments to farmers. With membership, Hungary became a policy-shaper of EU decisions and politics. In the first years, however, this manouevring room has not been adequately used, since the traditional, historically rooted unilateral policy-taker behaviour and mentality could not yet be overcome. Another important problem is the deeply divided Hungarian society between two basic political parties and strategies that does not only appear in the different approach to global and European developments but seriously hinders the identification and implementation of Hungarian strategic interests in the enlarged European Union.

Suggested Citation

  • András Inotai, 2007. "Experience with and lessons from the first years of EU membership – The Hungarian case," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 3-15.
  • Handle: RePEc:bas:econst:y:2007:i:1:p:3-15
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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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