Hungary became a full member of the European Union on 1st May 2004. Its membership has had a positive impact on the Hungarian economy and provided several competitive advantages for foreign companies setting up a permanent presence in the country.
For the period from 2007 to 2013, Hungary has access to EUR 22.5 billion from the European Structural and Cohesion Funds of the European Union. These funds will be distributed to enterprises and certain government institutions under the scope of the 'New Hungary Development Plan' and adhere to the following six main priorities:
- Economic development
- Transport development
- Social renewal
- Environment and energy development
- Regional development
- State reform
In addition to the funds coming from the EU, Hungarian cofinancing may reach a further EUR 5 billion in this period. Moreover, experience shows that for every Euro spent in EU development projects, another Euro is invested by the private sector. Thus, the real amount of investment to be mobilized by the European Structural and Cohesion Funds is expected to be about EUR 60 billion during the next seven years.
This cash influx may launch an unprecedented waive of development in the aforementioned fields, by which Hungary could approach, and in many respects even reach, the average level of development of the European Union by 2013. Through the successful spending of this amount, Hungary may strengthen its existing capacities, create jobs and eliminate obstacles that hinder economic development.
- Membership in a community of stability, democracy, security and prosperity;
- Stimulus to GDP growth, more jobs, higher wages and pensions;
- Growing internal market and domestic demand;
- Free movement of labour, goods, services and capital;
- Free access to 450 million consumers.
- Growing inflow of FDI due to increased business confidence;
- Reduced risks, more mobile workforce;
- A regional hub and gateway: access to East Europe and the Balkans;
- Efficient transport through the major Helsinki corridors;
- Stronger competition and a drive for innovation;
- State subsidy system harmonised with EU regulations;
- Easier access to financial institutions and funds within the enlarged European Union;
- One percent point additional increase in GDP and industrial output growth due to higher export sales dynamics.
Benefits for companies
- Increased access to EU funds and support for SMEs;
- Transparency of taxation and business accounting rules;
- No customs or quantitative restrictions within the EU;
- Simplified administrative procedure when trading with other EU member states;
- Easy access to a market of 450 million consumers for non-European companies settled in Hungary.
Reduction of non-tariff trade barriers
- Mutual certification of goods;
- Single standard certification process for the entire region;
- Rigorous enforcement of competition policy and intellectual property rights;
- Harmonized VAT payment system in the EU.
Outlook for EMU Membership
- Meeting the Maastricht convergence criteria gives high-level stability;
- Price stability induces economic transparency and facilitates business planning;
- Lower real interest rates boost investments;
- No exchange risk and conversion charges;
- Improving fiscal balance contributes to preserve high country rating;
- An extra 0.6-0.9 % increase in economic growth due to the adoption of the single currency.
See more about Hungary’s activity in the EU on these pages: