The Eurosummit next Thursday and Friday will focus on the quarrel between the EU, Poland and Hungary. These two countries are blocking the new budget and the corona aid fund because they do not want Europe to make demands on their form of the rule of law. And Hungary is not thinking of withdrawing the veto.
Several Member States, including the Netherlands, have long been in favour of a link between subsidies and the rule of law in the European budget. But critics say that Germany seems to be taking the brake precisely when it comes to the Hungarian rule of law.
Money seems to play an important role in this. A Hungarian journalist collective discovered how the controversial Prime Minister Viktor Orbán binds German companies. ‘How Orbán played Germany’ is the name of their months of research.
“ The Hungarian government is increasingly distributing subsidies to German companies,” says investigative journalist Szabolcs Panyi. “In fact, German companies have recently received more state aid from the Hungarian government than Hungarian companies.”
These are, in particular, companies from the German automobile industry. In Hungary there are now many factories of German car companies. For example, one of Mercedes in the city of Kecskemét. The plant received over 100 million euros of Hungarian State aid and hardly pays taxes.
According to Dirk Wölfer of the German-Hungarian Chamber of Commerce, Hungary is economically interesting for German entrepreneurs. “There are well-trained workers and lower wages than in Germany.” But that‘s not all: there are no strict labour laws and there is almost never a cessation.
Journalist Panyi calls the German automobile industry an engine for the Hungarian economy. “They have a direct line with Prime Minister Orbán and the Minister dealing with foreign investment. You could say they have permanent honeymoon.”
Lucrative weapons deals
German Chancellor Angela Merkel and Prime Minister Orbán have warm ties to the outside world. There were some frictions, but their parties are still in a political group in the European Parliament.
“ Germany and Orbán have indeed had very good economic and political relations in recent years,” says Wölfer of the Chamber of Commerce. “That will not change overnight. They are old and traditional ties.”
And Prime Minister Orbán forges more ties. Hungary is a major buyer of German defence equipment and is again investing billions in new German tanks and other military equipment.
“ When Ursula von der Leyen was Minister of Defence in Germany, Germany concluded very lucrative arms deals with Hungary. One of my sources said: Hungary buys more weapons that the German army”, says Panyi.
MEPs from eight Hungarian opposition parties warn the European Union and in particular Germany in a call in the German newspaper Die Zeit: do not bow to Prime Minister Orbán. “He wants to go very far to keep his grip on power,” says a sentence in the letter.
According to Sándor Rónai, one of the MEPs, Orbán is trying to corner Germany. “He came up with a statement the other day. We can say with certainty that he’s trying to blackmail Germany. Because German companies, and he specifically emphasized the German car companies, hardly pay taxes.”
“No concessions to a dictator‘
Orbán finds an ally in Polish Prime Minister Mateusz Morawiecki. Together they have been blocking the European budget and the Corona Recovery Fund since mid-November. Chancellor Merkel, as President of the EU, has the complex task of mediating in the dispute.
Wölfer believes that good trade relations between Hungary and Germany can ensure that political relations stabilise. “I think the economy can contribute to a good relationship between the two countries.”
Friday we spoke with the Hungarian State Secretary of Communications, Zoltán Kovács. He is one of Orbán’s most important advisors. In the interview he did not want to discuss the link between Hungary and Germany. He did say “wisdom and proposals to resolve this situation” to expect from Merkel.
MEP Rónai stresses that Germany and the EU should not compromise with Orbán. “You should not negotiate with him when European values and the rule of law are at stake. Then you cannot make concessions to a dictator.”