• The EU and Hungary: Colonisation, De-industrialisation, De-structuring

  • By Judit Morva | 25 May 09
  • With the accession of Eastern European countries, EU leaders, without warning and formal declaration, changed the project of European integration. Instead of putting in place a programme of development and economic integration with long-term funding, EU enlargement created a lasting territorial division into two kinds of countries. The countries of Eastern Europe – which still represent 100 million people – are trapped in the role of underdeveloped countries. Without saying it openly, it is a free-trade area that the Commission has imposed, and our countries no longer have any control over their own evolution. In the name of competition and efficiency, the Union has demanded a speedy privatisation, open borders and liberalisation, even beyond that which has occurred in the old EU countries. In general, as descriptions of the situation of Eastern Europe, the words colonisation, de-industrialisation and de-structuring are not at all exaggerated.

    In Hungary we had to privatise agriculture and industry. The new owners – usually the multinationals – have been primarily interested in opportunities, not production, which led to the closure of many factories. Thus, after the privatisation of sugar (with six plants in the country), there is no longer a single sugar factory, and we have to import all the sugar we consume.

    The social situation is equally dire. Hungary is a country of ten million inhabitants, and since the early 1990s, we have lost 1.4 million jobs, which represents more than a quarter of previously regular jobs. In return, unregulated work represents 1/4 to 1/3 of economic activity in the country. Hundreds of thousands of workers do unregulated work, without any protection. Their working conditions and hours are not regulated, and they do not pay pension contributions and social security.

    The direct consequence is a shortfall in revenue from taxes and contributions, and we are in a negative social spiral. In the name of balanced budgets, the EU is pressuring Hungary drastically to reduce benefits and privatise without end while poverty is increases each year.

    Industrial outsourcing, which is creating competition between Eastern European workers and those from the oldest countries of the Union, is based on this combination of low wages and illegal work. Multinational companies hire under regular conditions, but subcontracting takes place at the unregulated labour market. De-industrialisation, a result of privatisation and the dismantling of social services, has created an economic environment that is establishing our countries as suppliers of cheap labour. Make no mistake, this does not create a viable and coherent industrial structure and offers no prospect for our people. It is a dead end for development.

    In our country, the welfare state has disappeared or is disappearing. The socio-economic structure is unstable, a source of permanent tension, but it is also a lasting instability in the sense that the dynamic of development is not going to take our country out of this dead end. The gap in living conditions between the two parts of Europe creates tensions and destabilises the construction of the Union. The financial crisis is further aggravating the budgetary situation of each country with no solution in sight, not even in the long term. This open systemic crisis calls for reflection on the very project of the Union as an region of stability and well-being.