BUDAPEST: The government should reduce the Hungarian economy’s dependence on the vehicle sector and European Union subsidies, the deputy parliamentary group leader of the opposition LMP party said on Saturday.
Economy Minister Mihály Varga recently said that the unexpected drop in Hungary’s gross domestic product (GDP) was due to poor performance in the auto sector and a fallback in EU subsidies, but the government has failed to come up with policies to address this problem, as promised, Erzsébet Schmuck told a press conference.
The vehicle sector generates 22 percent of Hungary’s industrial output and 90 percent of its products are exported, she said. Most car sales are targeted at China, but the Chinese economy is slowing, she added. The global economy is not in any better shape than it was in 2008 and if the government builds only on the car industry and multinational companies it will put the Hungarian economy in an unstable position, Schmuck said.
As regards EU funding, the government had been unable to draw down a single forint in the first quarter of this year and although it has boasted record drawdowns in previous years, these funds are not used efficiently, she said. “A considerable amount of EU funding is stolen,” she insisted. The economy’s “dual structure” must be loosened, she said, adding that LMP is not against multinational companies as a principle, but the “problem lies in the proportions.” Small and medium-sized companies and local economies should be strengthened, she said.
