Central Europe Review: politics, society and culture in Central and Eastern Europe
Vol 1, No 17
18 October 1999

C S A R D A S:
Grinning and Bearing It
Hungary's long wait in the wings for EU membership and the forthcoming Helsinki summit

Gusztav Kosztolanyi

"Speed is of the essence because there is a window of opportunity for enhanced momentum in the preparations for enlargement, in accordance with the expectations of the candidate countries. Quality is vital because the EU does not want partial membership, but new members exercising full rights and responsibilities"

Thus Gunther Verheugen at a press conference in the European Parliament on 13 October, following Commissioner Prodi's statement on Enlargement. The emphasis placed on keeping up the momentum of the process stemmed from the experiences of the crises in the Balkan region; European integration continues to be seen as the sole means of guaranteeing peace and prosperity. In the light of this, the EU must demonstrate that its commitment to admit new members remains steadfast. Mr Prodi announced that in 2000 all candidate countries that fulfil the Copenhagen political criteria (democracy, human rights, the rule of law and respect for minorities) and have proved that they are ready to take the necessary measures to comply with economic criteria should be allowed to enter into negotiations. In other words, the door was now open to Bulgaria, Latvia, Lithuania, Malta, Romania and Slovakia.

Negotiations with candidate countries should follow a differentiated approach so that countries can progress at their own pace without being held back by a possible lack of progress in others. This represents a departure from previous practice: instead of opening an equal number of chapters for all candidates, the EU would decide to launch negotiations with a given country after having carried out an assessment of the progress made in accordance with the Copenhagen criteria. The chapters already provisionally closed in the ongoing negotiations will be reviewed, as agreed, to take account of newly adopted acquis communautaire. This means that the EU is given an opportunity to evaluate the extent to which candidates have lived up to the commitments they have undertaken.

The advantage of this approach is clear: each country will make progress on the basis of its own merits. It also enables the countries joining negotiations from 2000 onwards to catch up with the rest.

The fundamental difference between this and earlier enlargements is that following the completion of the Single Market the EU has abolished its internal frontiers. Given that this is the case, the Commission has proposed to define clearly its policy on transition periods for new Member States and to distinguish between two cases: firstly, for areas linked to the functioning of the Single Market, regulatory measures should be implemented quickly. The aim of this is to keep transition periods to a bare minimum and to ensure that they are as brief as can be reasonably expected. Secondly, for areas where considerable adaptations are necessary and which require substantial effort as well as considerable financial outlays (such as environment, energy and infrastructure), transition arrangements could be spread over a definite period of time, but here again there is a firm proviso, namely that candidates must show that alignment is actually taking place and that they are do have realistic and detailed plans to achieve it, putting their money where their mouths are.

The Commission also welcomed the fact that some candidates had already set themselves target dates as this was a means of expressing their determination to prepare for membership according to a strict timetable. The EU, however, wishes to carry out a fuller assessment of each candidate's situation both in terms of progress in negotiations and in preparations for membership, as this is the only way of ensuring that target dates are realistic.

The Commission's recommendation to the Helsinki Council is that it should undertake a commitment to be ready to decide from 2002 on the accession of candidates that fulfil all of the necessary criteria. Even if the Council were to respond favourably, it would still mean that accession would not actually take place prior to 2005 or 2006 due to the procedures involved, whereby all existing Member States must ratify the agreement once negotiations are concluded.

By then, three elements that form the basis of the Commission's decision should be in place: the financial framework (at the European council in Berlin, the working hypothesis for Enlargement was 2000-2006 and the Council and Parliament must ensure that the requisite budgetary appropriations are in place), institutional reform (which may very well become protracted due to the proliferation of highly sensitive issues at stake, such as the subject of the weighting of votes in Council, whether to modify the right to veto and determining whether all new Member States should each have a Commissioner, which might mean that some of the larger current Members would have to renounce one in order to allow a new entrant to be represented; all of these issues are bound up with national pride and prestige) and the conclusion of negotiations.

The regular reports on the candidate countries were also presented. Hungary was given several specific mentions. As regards economic criteria, Hungary (alongside Poland) had maintained the highest growth rate at 5.1% and was listed as coming closest (behind Cyprus and Malta, both of which are already ripe for accession in this respect) to meeting the criteria on the state of the market economy and the ability to cope with competitive pressure over the medium term. Hungary was also praised for keeping up the pace in the field of legislative approximation and for having a consistent track record in setting up and strengthening its institutions in order to implement and enforce the laws.

Some criticisms were also levelled within the regular report, however. The situation of the Roma in Hungary leaves considerable room for improvement in the Commission's eyes, although it had not deteriorated since the last report was adopted a year ago. More resources should therefore be made available within the framework of the central budget. Corruption was identified as a problem, as was the balance of payments and the genuineness of the government's commitment to the reform of the pension system. Progress in the realms of agriculture, animal and plant health was felt to be slow. Standards in justice and home affairs still have to be raised to bring them in line with those of the EU. There had been a similar lack of positive action in modifying customs procedures. Frontier crossing points would have to be modernised and the so-called "green frontier" better protected (here the reason for the Commission's concern is Hungary's future role in guarding the Union's external borders until such a stage as Romania is ready to become a fully-fledged Member State). Transport of goods by rail would have to be brought up to date, the air transport sector restructured and the pace of transposing legislation in the environmental sector accelerated. Recent development in the media sector did not go unnoticed: "Hungary respects the freedom of the press, but there is cause for concern in that the government wishes to intervene too directly in the workings of the media." As far as television was concerned, the Commission felt that the Board of Trustees within the public service broadcasting sector did not reflect the political realities of Hungary as it did not contain any representatives from opposition parties.

The Foreign Minister, Mr Janos Martonyi, responded to Mr Prodi's statement with muted optimism: "The European Commission's assessment of Hungary was positive, objective and of high quality." Hungary's main concern, he continued, was that accession should not be delayed. Mr Martonyi also entioned the stance adopted at the 5 + 1 meeting in Tallinn on 11 October, where the Foreign Ministers of Cyprus, the Czech Republic, Estonia, Poland, Hungary and Slovenia met to discuss progress towards enlargement. (see related article) In Tallinn, Mr Martonyi had stressed that, in Hungary's view, all issues relevant to the process could be examined during the Portuguese Presidency in the first half of 2000. Afterwards, there would be no obstacles to negotiations entering their final phase so that they could be brought to a conclusion by the end of that year. In order to facilitate this, the six countries reaffirmed their determination to co-operate closely and to participate in the EU's Common Foreign and Security Policy. In the wake of the Commission's declaration, he saw no reason to abandon hope of the Tallinn perspective, with 2002 featuring as the deadline for accession.

In Tallinn, Mr Martonyi had emphasised the reciprocal nature of the Enlargement process. Whereas it was important for Hungary to soften up public opinion in favour of EU membership, it was equally vital for existing Member States to follow suit in making it clear to their populations that Hungarian membership is in their interests as well. Fears and reservations amongst the current Members could then be allayed, as they were based mainly on assumptions rather than on realities.

On 15 October, during his official visit to the Book Fair in Frankfurt, the Prime Minister, Mr Viktor Orban, reiterated that Hungary would be ready to join the EU in 2002 and that if this target date were not met, it would not be due to any fault of his country, but to the EU itself. The tinge of disappointment in his words is indicative of the tension which exists between the vantage point of the candidate countries and that of the EU. It is in the manifest interest of any political leader in Central Europe to be able to reap the rewards of leading the country towards EU membership. Talk of dates therefore goes beyond mere number-crunching, particularly given the manifold benefits Enlargement has in store (removal of customs barriers to products, free movement of goods, services, capital and workers, increased welfare and security, continued foreign investment to name but a few). The EU, on the other hand, has to face the prospect of changing an administrative culture that has grown over decades as a result of constant and painstaking compromise and bargaining, to ponder how best to guarantee the efficient working of its institutions with a considerable increase in the number of members, how to encourage and sustain growth and the adaptation to new standards across the full spectrum of policy of countries burdened by a legacy of Communist rule and last, but not least, it must foot the bill, stretching the principle of solidarity to new limits.

Hungary's obsession with the date of the entry into the Community flowing with milk and honey (or perhaps, more appropriately, wine lakes and butter mountains!) can be put into perspective quite easily in the light of all this. Events beyond the confines of Hungary are weighed up in relation to the effect they might have on Hungary's chances of joining as soon as possible. Hence Mr. Orban's disapproval, in an interview printed in the Italian newspaper La Repubblica, of the election results in Austria. As he rightly pointed out, Mr Haider's party is no fan of Enlargement, and this could be detrimental to Hungary's interests (the Austrian ambassador to Hungary, Mr Hannes Porias, tried to play down the impact the election results would have by referring to recent opinion polls which revealed that a clear majority of Austrians support Hungary's accession and by highlighting the importance of fostering closer contacts between the two countries at the expert level, thereby enhancing relations between regions such as Burgenland and Gyor- Moson- Sopron).

The President of Hungary, Mr Arpad Goncz, has been doing the rounds of European capitals recently, drumming up support for the Hungarian cause. He has travelled to Belgium, where he opened the Europalia Festival focusing on Hungary, to Berlin, where he extended an invitation to the President of the Federal Republic, Mr Johannes Rau, to attend the forthcoming summit of Central European Presidents to be held in Szekesfehervar on 28-29 April 2000, and to Warsaw to meet Mr Kvasnievski. On all of these occasions, Enlargement featured as a theme.

That the negotiations will be long and arduous in spite of all the declarations of support given to Hungary can best be illustrated by looking at one of the major conflicts brewing – that of land and real estate acquisitions by foreign nationals in Hungary. The Hungarian government wishes to be granted a transitional period of ten years after accession during which it would maintain current legislation prohibiting domestic and foreign legal persons as well as foreign natural persons from purchasing agricultural land. At the same time, the government also wishes to maintain its authorisation system for prospective foreign buyers of real estate, which would apply for five years after accession.

Hungary's reservations on agriculture are well founded. For historical reasons there is a complete absence of the type of medium-sized holding which is common in the EU. For such a category to come into being, the ban on firms and co-operatives buying up land would have to be upheld. Otherwise the dictates of profit margins would hold sway, leading to the exploitation of both the local workforce and the environment. According to an analysis carried out by the World Bank, 92% of holdings account for barely 10% of the land owned, with 8% of holdings in possession of the remaining 90%. Family holdings and the few medium-sized estates that exist enjoy positive discrimination and legal persons are prevented from buying land.

The opponents of the present system within the Ministry of Agriculture contend that the co-operatives are not organised along classical lines, with paid labourers running the farms. Their fields are rented out to the individuals who cultivate them. If the land market were to be opened up to legal persons, they would target the 10% of land held in dwarf holdings. The capital they would bring in, moreover, would benefit even the cash-starved larger holdings, and an otherwise stagnant land purchase market would be livened up.

Another fear is that land prices in Hungary are a fraction of those in the EU. Under such circumstances, the danger of a wave of speculative purchases from rich foreign investors with little or no understanding or interest in either agriculture or the local peculiarities is a very real one. Although official figures state that the average price per hectare of arable land is around HUF 220,000, some sources paint a very different picture, claiming that HUF 100,000 (less than half) is more realistic.

As regards the real estate sector, the government defends its system on the basis of the liberal manner in which it has been implemented: out of the 20,000 applications to purchase property submitted by foreigners, only 3.5% have been rejected.

No matter how eloquent and justified they might be, all these arguments might fall on deaf ears. The Commission is a stickler for respecting the letter of the law and, although the Treaties are silent on the issue of land purchase, they insist on the free movement of capital and on non-discrimination on the basis of nationality. Only time will tell whether Hungary will be tough enough in making her stance prevail or whether she will succumb to the pressure from Brussels in the hope that this will bring the day of accession closer.

Gusztav Kosztolanyi, 16 October 1999

Sources used in writing this article:
Official Press Release on Mr Prodi's statement on Enlargement, 13 October
Magyar Nemzet, 6, 8, 9, 12, 13, 14 October
Magyar Hirlap, 13 October
Nepszabadsag, 13 October
HVG 9 October



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