Hungary

1) REFERENCES

Commission Opinion [COM(97) 2001 final - Not published in the Official Journal]Commission Report [COM(98) 700 final - Not published in the Official Journal]Commission Report [COM(1999) 505 final - Not published in the Official Journal]Commission Report [COM(2000) 705 final - Not published in the Official Journal]Commission Report [COM (2001) 700 final - SEC(2001) 1748 - Not published in the Official Journal]Commission Report [COM(2002) 700 final - SEC(2002) 1404- Not published in the Official Journal]Commission Report [COM (2003) 675 final - SEC (2003) 1205 - Not published in the Official Journal]Treaty of Accession to the European Union [Official Journal L 236 of 23.09.2003]

2) SUMMARY

In its July 1997 Opinion, the European Commission considered that, given the extent of the restructuring and modernisation efforts undertaken thus far by Hungary, there was every reason to expect that most sectors of Hungarian industry could in the medium term be competitive operators in the single market, in particular, in sectors receiving foreign direct investment (FDI).

The November 1998 Report noted that some progress had been made and, in particular, the competitiveness of Hungarian industry had improved as a result of cooperation with Community industry, the high level of investment, including foreign investment, and the adoption of Community provisions on standardisation and conformity assessment. However, the report stressed the need to continue with the restructuring of the steel industry.

The October 1999 Report noted considerable convergence between industrial policies in Hungary and in the European Union. Industrial restructuring was continuing although there had been delays in the steel industry. Foreign direct investment (FDI) was a significant factor in the expansion of this sector. A new strategy had been adopted to support the development of small and medium-sized enterprises (SMEs), and Hungary's participation in the third multiannual Community programme for SMEs (1997-2000) was producing good results.

The November 2000 Report indicated that privatisation had been practically completed. Industrial restructuring had continued since the previous regular report. Foreign investment continued to play an important role.

The November 2001 Report indicated that Hungary was continuing to make progress in the field of industrial policy and had encouraged innovative measures, the creation of networks and foreign investment. Industrial restructuring and privatisation had continued. For SMEs, the Hungarian strategy sought to aid their development, consolidate their capital base, and help them gain access to innovation and foreign markets. Provisions had also been taken to simplify their environment.

The October 2002 Report noted the efforts Hungary had made with regard to industrial policy and policies to promote SMEs.

The November 2003 Report considered that Hungary was essentially meeting the commitments on industrial policy and policy to promote SMEs. However, the privatisation and restructuring programme had to continue.

COMMUNITY ACQUIS

EC industrial policy seeks to enhance competitiveness, thus achieving rising living standards and high rates of employment. Its aim is to encourage an environment favourable to initiative, to the development of undertakings throughout the Community and to industrial co-operation, and to foster better exploitation of the industrial potential of innovation, research and technological development policies. EU industrial policy combines instruments from a number of Community policies, and includes both instruments related to the operation of markets (product specification and market access, trade policy, State aid and competition policy) and measures related to industry's capacity to adapt to change (stable macro-economic environment, technology, training etc.).

In order to cope with competitive pressure and market forces within the Union, the industry of applicant countries needs to have achieved a certain level of competitiveness by the time of accession. The applicant countries need to be seen as pursuing policies aimed at open and competitive markets along the lines set out in Article 157 (ex-Article 130) of the Treaty. Co-operation between the EC and the candidate countries in the fields of industrial co-operation, investment, industrial standardisation and conformity assessment as provided for in the Europe Agreement is also an important indicator of development in the right direction.

EVALUATION

As regards industrial policy, Hungary is continuing to give priority to promoting Hungarian industry and to national and foreign investment. The privatisation process must continue.

Since the 1997 opinion, Hungary has made good progress in terms of modernising its industrial policy. Nevertheless, work still needs to be done to redress regional imbalances and improve the situation of small local enterprises with regard to the multinationals. This chapter is provisionally closed, no transitional regime has been requested, and Hungary has met its commitments (see 2002 Report).

As regards small and medium-sized enterprises, Hungary has adopted the European Charter for small enterprises. The Széchenyi plan designed to promote SMEs started in 2001. The plan should be revised to concentrate on SMEs and pre-accession projects. Hungary is continuing its efforts to improve the economic environment for enterprises. Access to funding remains difficult and the definition of SMEs is not completely in line with the Community acquis. Efforts must also be made with regard to support services for SMEs.

Since the 1997 opinion, Hungary has made good progress in modernising its industrial policy. It should nevertheless make efforts to improve SMEs' access to funding and improve programmes and support services. This chapter is provisionally closed, no transitional regime has been requested, and Hungary has met its commitments (see the 2002 Report).

Since 1998, Hungary has participated in the third Community multiannual programme to promote SMEs (1997-2000) (1).

See also

Decision of the Association Council between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, of 23 November 1998 adopting the terms and conditions for the participation of Hungary in the Community programme in the field of small and medium-sized enterprises.

Official Journal L 343 of 18.12.1998

Last updated: 05.03.2004