EU Imperial expansion - the example of Hungary

PREFACE
by Rodney Atkinson

We are pleased to be able to publish this paper from Hungary by Dr Magdolna Csath of the University of Budapest. In the paper she describes the same processes which are at work in the destruction of the other nations of Eastern Europe, so recently freed from Soviet Communism. They now find that the European Union is daily destroying the very institutions of democracy, free enterprise, national sovereignty and parliamentary rights for which they struggled over 40 years to regain. Indeed it is precisely the "former communist" apparatchiks and politicians who find that Brussels acts in very much the same manner as Moscow did.

We see the same corporatism which now dominates the existing member countries of the EU, the same contempt for parliamentary democracy, the same bullying tactics and bribery, the same manipulation of public opinion by the State apparatus, and the same control of much of the press by euro-corporatism.

In addition the privatisation programmes in these underdeveloped countries have handed over at knock-down prices to foreign multi-national corporations those Hungarian property and business assets which could have been the basis of home grown enterprise. Farmers are being decimated while West European farmers continue to be grossly subsidised. The existing EU members have open access to Hungary while Hungarian farmers and businesses are denied equal free access to the rich markets of West Europe. The Hungarian Government must pay its full budget contribution from day one but it only receives 25% of the farming subsidies available to West European farmers through the EU.

If there was ever a programme for imperial take-over it is in these entry agreements forced on the new members by the European Union.

December 8, 2002.

Hungary and the European Union

by Professor Magdolna Csath,

Univerwsity of Budapest, Hungary

1. INTRODUCTION.

The EU enlargement to the East, from a historical point of view, can be considered a neo-colonialization attempt. This can be proved by the unequal conditions offered to the candidate countries - compared to existing members. Also the previously signed association agreements with these countries were based on relations of unequal partners, as the developed Western partners have gained more by liberalizing the markets of the associate countries, and capitalizing on the privatization opportunities, but offering very little in exchange.

9 out of the 15 countries in the EU today are former colonizing powers, which have accumulated their wealth partly from their colonies. The association agreements offered new wealth-creation opportunities, and so would full enlargement, if the conditions remained so unfair.

2. HUNGARY IN TRANSITION.

Hungary is the most globalized and liberalized country of the region. Hungary offers the best and most profitable investment opportunities to foreign investors, including tax holidays, subsidies and other types of support. Therefore Hungary has attracted the most Direct Investment per capita in the region. Also foreign control over the economy is the highest: it is about 70-75 per cent not - yet - including agriculture. The World Bank and the IMF are still strongly influencing economic policies, pushing it towards even more privatization, liberalization, export and growth orientation and budget restraint. Foreign owned corporations' share of exports is already about 80%. The Hungarian owned sector is economically weak and uncompetitive, because it is overtaxed and undersupported, while foreign businesses enjoy generous tax holidays, loose regulations and control, and other favourable conditions. Therefore the Hungarian companies, especially the SME-s face a real danger of bankruptcy if Hungary joins the EU. The Hungarian situation is well characterized by P.Gowan in the European Integration in the 21st century. (Sage, 2002)

"Hungary has been the paradigm of an economy which has been 'globalized/Europeanized': most of its industrial system has gone into foreign ownership. This has resulted in some high-tech export sectors, but a balance sheet of foreign-owned sectors which takes account of indirect as well as direct imports and which also takes account of repatriated profits seems to suggest that the 'globalization' of the Hungarian economy is overall value-subtracting from a national point of view. It is also generating a dual economy. In Hungary wage levels are strikingly low at 10-15 per cent of those in Austria."

Because of the high share of foreign ownership Hungary has no control over what is produced on her land, and what types of jobs are offered to her people. It is all decided far away, in the headquarters of the global companies operating in Hungary. Therefore there is little opportunity for the locals to influence the future, to be proactive, and to build an independent, strong country. Hungarian society as a whole also suffers: we can experience a disintegration process, lack of trust and weakening social capital. There is „only one" strong vision the politicians communicate to the people: our future is the EU, there can be no other alternative, the EU will solve all our problems, because we will get a lot of money from the EU, so „don't worry, be happy"! This is of course a dangerous lie! But there is little chance to inform the people about this, as the media is firmly involved in the „advertizing campaign", and therefore it does not allow different opinions to be voiced. The government spends huge amounts of money - of course the tax-payers' money- to lie to the people when selling the enlargement process as the happiest thing thant can happen to them.

3. HUNGARY IS ALREADY A COLONY.

From the above mentioned facts one can conclude that Hungary has already been colonalized. Hungary is also an American military basis, and as Z.Brzezinsky described it in his book "The Grand Chessboard. Basic Books 1997), a „protectorate". The EU handles Hungary on that basis. Some examples for this:

4. Unequal conditions are offered.

- the movement of labour will be restricted from Hungary to the EU, but not from the EU to Hungary. "protecting the home labor market"!

- European environmental regulations will not be imposed for some time. (protecting the interests of those foreign investors who are using technologies which can not comply with the European standards).

- Hungarian businesses will be restricted in several ways in doing business in the EU thus protecting the interests of the EU's small and medium sized companies.

- Only 25% of the direct support given to farmers in the present EU are offered to the farmers of the candidate countries, which will guarantee the disappearance of the majority of the small and medium size farms in the latter countries AND OPEN UP MORE EXPORTS FOR THE RICH EU MEMBERS' FARMERS. This will cause unemployment and poverty, and therefore tremendous societal and political problems. This process is not against the interests of the EU, because it serves the interests of the EU farmers, who -because of the CAP system - have problems with overproduction. The disappearance of the competitors will help create new markets, and also cheap land for creating huge farms for producing basic products and for conducting gene-manipulating experiments which are not welcomed by the population of the EU. (Note that nations which are in the EU have sacrificed their right to decide on GM crops. The European Union will decide. Ed) This is of course short-sightedness and very dangerous, too. Growing poverty may trigger social unrest, which will cause troubles not only for the local politicians, but also for the EU ones. Hopefully the EU is not that cynical, that it will trust local leaders, - who are now almost everywhere in the region, the former communist leaders - to oppress the unrest with those methods these people are familiar with !

B. The Hungarian politicians are EU postmen.

The Hungarian politicians do not stand up for the interests of the country and its people. They only deliver the letters with instructions from the EU and open them for Hungarian politics with explanations and orders for implementation. They serve again as before, but this time the „lords" are situated in Brussels, and not in Moscow. This is why they do not inform the general public about their negotiations with honesty, and at the same time silence and even threaten their opponents. This is why the Hungarian peasants' party has been destroyed several times, so today there is no legitimate power in the Parliament to represent the interests of the country-side.

4. HUNGARY IS NOT A WELL FUNCTIONING MARKET ECONOMY.

The Hungarian economy is mostly controlled by foreign global companies. The structure of the economy in terms of size and ownership-structure is less healthy than it has ever been, as it is very centralized and concentrated in the hands of a few large foreign businesses. The few large companies dominate the market from a monopolistic or oligopolistic position. They need not care about their customers, they raise their prices at will, and take the profit out of the country. (see Gowan's comments above). The foreign companies enjoy special conditions not offered to the domestic ones. On the other hand local businesses are over-controlled, over-regulated and overtaxed. The Hungarian government fought successfully for the interests of the foreign companies in Brussels, therefore even after Hungary's entry into the EU the government can continue - in spite of the EU competition rules - offering subsidies to foreign companies. Interestingly enough, the EU bureaucrats were willing to soften their position on that issue, but not at all on anything concerning the support of the Hungarian farmers! And the Hungarian government also did not fight so vehemently for the more favorable conditions to be offered to the farmers in Hungary.

5. HUNGARY IS NOT A FULLY DEMOCRATIC COUNTRY.

Today it is dangerous to criticize the EU enlargement in Hungary. Those who dare to do so are called nationalistic, anti-European, right-wing etc., and they are silenced and threatened. It is not unknown for them to lose their jobs, or opportunities to get proper work. The global companies invade all aspects of life, intervening in the economic, cultural and also political life of the country. They call on the president of the National Bank to step down, if he does not serve their interests. The media is not objective, nor informative, as it is strongly influenced by the globalization and corporatist forces. The people are more and more afraid of voicing their critical opinion, because they feel as if „big brother is watching them". Decisions are made about the future in closed circles and old networks, excluding of course the people who are affected by those decisions. Empowerment in society is weak, civil organizations are poor, and therefore dependent on those forces willing to finance them.

6. HUNGARY WILL NOT GAIN FROM EU MEMBERSHIP.

Taking into consideration all the problems mentioned it would be better for Hungary not to join the EU under these conditions. If it goes ahead anyway, there will be serious social and political upheavals, which cannot be easily solved. Also there is prospect of farming and what remains of Hungarian businesses to be acquired by foreign corporations. For most of the Hungarians only low level and poorly paid assembly type jobs will be available, as the key decisions will not be taken in Hungary. So the country may become totally dependent: the playing field of foreign forces. With those conditions accepted by the Hungarian politicians, only large businesses, the politicians and their advisers will be the winners, the rest, including farmers, SME-s, professionals and pensioners will be the losers.

Even if some segments of society receive some EU funds, it will not solve the problems. People want jobs, opportunities and equal treatment and not „life-saving" aid. Hungary also has to pay a high membership fee from the first minute of membership. It will be calculated based on the country's GDP. However the GDP is not an appropriate indicator for this in the case of Hungary. The reason is that most of the GDP in Hungary is produced by foreign - controlled businesses, which can freely take their profit out of the country. Because of this, if the budget contribution is based on GDP, we will be paying also on the basis of those large amounts of foreign, repatriated profits from which the Hungarian economy and the Hungarian people do not benefit from at all. Our prices will increase because of applying the new EU rules, but the wages will not follow, as the foreign companies will continue to pay lower wages in order to achieve competitive advantage. They will be able to pursue this strategy, since our population will not enjoy „the free movement of people" into other EU countries which other EU members enjoy.

7. HUNGARIAN SOCIAL INDICATORS ARE VERY BAD:

The only indicator which is good enough for Hungary is GDP. Our quality of life indicator, and the Human development index are very bad. The life expectancy for men is the worst in the region, 22% of men will not survive until age 60. The mortality rate is high and the birth rate is declining. Therefore the population growth is negative. We are becoming a „suicide society". Our problems can not be solved by joining the EU. As a matter of fact they may be even be exacerbated by EU entry. What we would need is a self-strengthening economic, educational, cultural and development strategy based on our own skills, capabilities, knowledge and entrepreneurhip combined with a fair value system, a cohesive society and strong social capital. We should also better co-operate with neighbouring countries, as - despite our historical conflicts, which were very often triggered by outside forces -, we are „natural allies" for each other. Also there are markets elsewhere not only in the EU. Why should we be proud of selling mostly to the EU? This is the poor strategy of „putting all our eggs in one basket". Diversification of markets and trade relations is always a safer strategy.

8. SUMMARY AND CONCLUSIONS.

The EU is moving towards a model of more centralization and less democracy. It is also striving to become a military superpower. This is the basis from which it handles the enlargement process, which can be considered to be a neo-colonialisation project. For this reason it is not the best development alternative for the candidate countries, which would rather need independent, and self-strenthening strategies. But the direction of the EU is not good for the smaller member countries either. They may also become the losers of this „megaproject", which dangerously mirrors the former communist ideologies. Therefore it is no surprise, that the former communists are the keenest new servants and supporters of this emerging system.

Citizens of the EU and those of the candidate countries have to be aware of these dangers, and have to ally to fight the new elites together : for democracy, sovereignty, independence and human dignity.