REPORT on the Regular Report from the Commission on Hungary's progress towards accession (COM(98)0700 - C4-113/99)

25 March 1999

Committee on Foreign Affairs, Security and Defence Policy
Rapporteur: Mr Otto von Habsburg


By letter of 16 July 1997 the Commission forwarded to the European Parliament its opinion on Hungary's application for membership of the European Union (COM(97)2001 - C4-0373/97).

At the sitting of 18 July 1997 the President of the European Parliament announced that he had referred the opinion to the Committee on Foreign Affairs, Security and Defence Policy as the committee responsible.

By letter of 18 December 1998 the Commission forwarded to the European Parliament its Regular Report on Hungary's progress towards accession (COM(98)0700 - C4-0113/99).

At the sitting of 8 March 1999 the President of the European Parliament announced that he had referred the Report to the Committee on Foreign Affairs, Security and Defence Policy as the committee responsible.

At its meeting of 23 June 1997, the Committee on Foreign Affairs, Security and Defence Policy had appointed Mr Otto von Habsburg rapporteur.

It considered the Regular Report and the draft report at its meetings of 2 September 1997, 21 July 1998, 20 January 1999, 23 February 1999 and 24 March 1999.

At the last meeting it adopted the motion for a resolution unanimously.

The following were present for the vote: Spencer, chairman; Carrère d'Encausse, vice-chairman; Habsburg, rapporteur; Burenstam Linder, Bertens, van Bladel, Cars, Daskalaki, Dillen, Donner, Ephremidis (for Alavanos), Ferrer (for Galeote Quecedo), Fernandez-Albor, Günther (for Gomolka), Graziani, Kristoffersen, Lomas (for Balfe), Mutin, Oostlander, Piha, Stenzel, Swoboda (for Hänsch), Theorin, Tindemans and Titley.

The report was tabled on 25 March 1999.

The deadline for tabling amendments will be indicated in the draft agenda for the relevant partsession.


Resolution on the Regular Report from the Commission on Hungary's progress towards accession (COM(98)0700 - C4-113/99)

The European Parliament,

- having regard to Hungary's application for membership of the European Union, tabled on 31 March 1994, pursuant to Article O of the EU Treaty,

- having regard to the opinion of the Commission on this application for membership (COM(97)2001 - C4-0373/97),

- having regard to the Regular Report presented by the Commission on 17 December 1998 (COM(98)0700 - C4-0113/99),

- having regard to the Composite Paper of the Commission of 17 December 1998 (COM(98)0712 - C4-0107/99),

- having regard to its resolution of 4 December 1997[1] on the communication of the Commission "Agenda 2000 - for a stronger and wider Union" (COM(97)2000 -

C4-0371/97), and its resolutions of 11 March 1998[2] on assistance to the applicant countries in central and eastern Europe in the framework of the pre-accession strategy (COM(97)0634

- C4-0010/98 - 97/0351(CNS) and on the proposals for Council decisions on the principles, priorities, intermediate objectives and conditions contained in the accession partnerships (COM(98)0053 - C4-0130/98),

- having regard to the decisions taken at the European Councils of Luxembourg (12 and 13 December 1997), Cardiff (15 and 16 June 1998) and Vienna (12 and 13 December 1998),

- having regard to the report of the Committee on Foreign Affairs, Security and Defence Policy (A4-0154/99),

A. whereas the Commission's progress report describes Hungary as a socially and politically stable country which has always displayed a commitment to reform and is making steady progress in developing a functioning market economy,

B. whereas Hungary is reported to have made a large effort to implement Community law, and whereas around 30 bills are due to be passed into law in the first half of 1999, dealing with the fields of customs, advertising, competition, insurance companies, municipal authorities, civil and labour law, farmland, copyright and statistics,

C.whereas the Hungarian economy has developed positively, 5% growth is forecast for 1999, more than 80% of Gross National Product is generated by the private sector, trade with the EU accounts for 71.9% of exports and 63.9% of imports, unemployment is falling and stands at just under 8%, and inflation has fallen from 20% to less than 10% between 1997 and 1999,

D. whereas in its budget for 1999 Hungary has earmarked substantial funding for improving the technical equipment used for border controls, thus making an important step towards the Schengen Agreement,

E. whereas the Hungarian Government intends to enact necessary provisions of environmental legislation only by the end of 2001, and possibly to apply for transitional periods because of difficulties in financing environmental investment,

F. whereas the change of government in May 1998 was carried out perfectly normally in the style of a traditional democracy,

G. having regard to the positive trend in Hungary's relations with its neighbours, which has been assisted, in particular, by the replacement of the Meciar Government in Slovakia, which has led to a series of bilateral agreements, and by the inclusion in the Romanian Government of the Hungarian minority party, which has taken responsibility for the Ministry for Minorities,

H. whereas from April 1999 Hungary will be a member of NATO and whereas its accession to NATO was endorsed by 85% of the people of Hungary in a referendum on 16 December 1997,

I. having regard to the Hungarian Government's intention of completing the accession negotiations by the end of 2001,

J. whereas, since the Commission opinion of 1997, the meetings of the EU-Hungary Joint Parliamentary Committee, and its recommendations to the Association Council, have done much to promote mutual understanding and continue to assist the pre-accession process,

1. Welcomes the rapid progress in screening the acquis communautaire and starting the negotiations;

2. Calls on the Commission and the Hungarian Government to counter the social costs associated with the process of economic and financial restructuring with enhanced social and economic accompanying measures, in order to permit balanced economic growth from a social point of view;

3. Welcomes the substantial improvement in Hungary's relations with its neighbours, particularly Slovakia and Romania; notes with satisfaction that, since the Meciar Government lost the elections in Slovakia, binding agreements have been concluded there to protect the Hungarian minority, particularly in the fields of culture, education and use of language

4. Considers that, with regard to the issue of the Roma, the Hungarian Government has made considerable efforts since 1997 to improve the quality of life of this Hungarian minority and has also drawn up an action plan to attain this objective, but that it does not have adequate funds available for this; notes that the autonomy elections in October 1998 resulted in Roma self-administration in 775 places and settlements, and that an interministerial commission was set up to deal with the problems of the Roma, in which the President of the Central Administration of the Roma participates and which is to prepare specific projects to integrate the Roma in a wide variety of fields;

5. Recognises Hungary's efforts to bring its legislation on organised crime into line with EU provisions and to adopt stronger measures to combat corruption and promote internal security;

6. Criticises the current exclusively project-based approach of the ISPA programme to the financing of major infrastructure projects and calls on the Commission to reform this structural policy instrument to make it fundamentally programme-based for the purpose of effectively adjusting regional imbalances;

7. Calls on the Commission suitably to involve decision-makers at regional and local level as well as the social partners and NGOs in the budgeting and management of PHARE and ISPA funds and in that way also to facilitate cross-border cooperation between PHARE countries;

8. Draws the Commission's attention to the fact that PHARE-CBC funds will best promote models of development through partnership in the regions bordering on the EU if they are deployed in conjunction with INTERREG;

9. Draws attention to the remaining environmental problems, but welcomes the programme which has been presented for improving air and water quality and establishing refuse dumps in the next six years;

10. Reiterates its call in the Elchlepp report for more environmental technology transfer to Hungary and other Central and Eastern European countries, and recommends close cooperation with the international financial institutions to finance environmental investment;

11. Calls on the Commission and the Hungarian Government to take account of the social impact of the gradual liberalisation of the sale, purchase and encumbrance of real estate and, on the model of existing rules within the EU, to guarantee such property claims as the ban on selling or buying nature conservation areas and freedom of access to, and the ban on privatisation of, recreation and tourist areas, and to make it possible for transitional provisions to be adopted which take account of inequalities of wealth regarding the acquisition of houses and land by non-residents;

12. Welcomes the fact that Hungary is already participating in the implementation of the CFSP by endorsing EU joint actions, common positions and statements, and expressly supports Hungary's intention of following up its accession to NATO with accession to WEU;

13. Considers that the government must continue the regular dialogue with the opposition and representatives of the two sides of industry in order to create a political climate favourable to Hungary's integration into the EU;

14. Advocates that representatives of the parliaments of the applicant countries be permitted, over and above the existing exchange of information and ideas in the joint parliamentary committees, to attend meetings of European Parliament committees as observers when matters relevant to accession are being dealt with;

15. Calls on the Council and Commission, after completion of the screening process and submission of all negotiating positions and after submission of the second progress report in autumn 1999, to draw up a specific timetable for the accession negotiations and their possible completion;

16. Instructs its President to forward this resolution to the Commission, the Council, the European Council, the parliaments of the Member States and the Hungarian Government and Parliament.

  • [1]  OJ C 388, 22.12.1997, p.17
  • [2]  OJ C 104, 6.04.1998, p.110 and p.113


In the past year, the situation in Hungary has generally improved in virtually every field. Of course huge difficulties remain, because after 40 years of communist mismanagement it was not possible to put everything right within 10 years. Nonetheless, one thing is undeniable: Hungary has made enormous progress, which provides evidence of its readiness for accession to the European Union.

I. The economy

In the past year, Hungary's economy has moved in the right direction. In the field of foreign trade, exports to the EU in the first half of 1998 totalled 7.7618 billion, while imports rose to 7.7265 billion in the same period. In comparison with the previous year, these figures represent a rise of 24.4% in imports and 22.6% in exports. Over the same period, trade with the EU accounted for 71.9% of Hungary's exports and 63.9% of its imports. Roughly speaking, therefore, there is equilibrium.

Hungary is now the EU's tenth largest trading partner, having just overtaken Taiwan in this respect.

There is also still a good deal of foreign investment.

In the financial field, inflation is constantly declining. There are even grounds for assuming that inflation will already fall below 10% this year. Progress has been made with regard to privatisation. More than 80% of GNP is now generated by the private sector, and it is worthy of note that small and medium-sized businesses already account for 60% of employment. There are already a million small and medium-sized businesses.

The introduction of the euro has had a favourable impact on Hungary so far. This particularly applies to the stability which can now be anticipated. The IMD institute of economics in Lausanne has shown in a study that in 1998 Hungary was ranked 28th worldwide in terms of competitiveness, which means that it has already overtaken some EU Member States in this regard.

Concern has been expressed that the crisis on the Russian market could adversely affect the Hungarian economy. As far as it is possible to determine at present, only a few sectors have been affected by the Russian crisis, such as medicines, buses and foodstuffs. The Russian crisis has also had relatively little impact on investment in Hungary.

II. Politics

During the reporting period, the referendum on Hungary's membership of NATO was an important factor. 85% voted in favour. All parties were in favour of membership with the exception of the very small radical party, the MIEP, which is insignificant.

Of particular importance was the development of Hungary's relations with neighbouring countries. As is well-known, the biggest problem was Slovakia, so long as Prime Minister Meciar remained in power. Since his fall and his replacement with a moderate government, a protocol has been signed (as early as 24 November) on the procedure for implementing the various aspects of the Basic Treaty. Eleven joint committees were set up. Of particular significance was the agreement between Slovakia and Hungary on the rebuilding of a bridge from Esztergom to Pärkany, enabling construction work to begin. Meciar had previously prevented this.

It is also worth noting that direct relations have now been established between the two parliaments, while agreements on environmental protection and schools are being drafted.

It is very encouraging that binding agreements have now been concluded concerning the Hungarian minority in Slovakia, with special reference to culture, education and language use. The agreement of 6 November 1998 on cereal exports from Hungary to Slovakia is also important. As regards the Bös-Nagymaros/Gabcikovo dam system on the Danube, the controversy will in future, fortunately, be confined to the courtroom, losing its political dimension. Hungary also seeks to involve Slovakia in cooperation on the Visegrad model again.

While relations with Slovenia and Croatia were already excellent, those with Romania have improved significantly since the new government came to power. The fact that the Romanians have included the Hungarian minority party in the government, and even entrusted the Ministry for Minorities to it, may be regarded as a great success, particularly if the present government remains in power in Romania.

As regards domestic policy in Hungary, the most important event was the general election in May 1998. It proceeded normally, as in a traditional democracy. The previous socialist majority was replaced by a coalition between FIDESZ and the small-holders and the Hungarian Democratic Forum. The transition was not marked by any major difficulties. One regrettable development was that, for the first time, a small radical rightwing party, the MIEP, entered parliament. However, it did not gain a single directly-elected seat. Moreover, the policies pursued by its leadership do not suggest that it is likely to last long. It is also significant that even since the elections, Mr Szabó von Debrecen, who was probably the MIEP's most respected member, has resigned from it. The general view in Hungarian political circles is that the MIEP does not have much of a future, therefore.

III. Relations with the EU

In the past year, work has begun (on 31 March 1998, in connection with a conference between the governments) on developing mutual relations on the basis of the Luxembourg decisions. Further progress has also been made during the year, and numerous Hungarian reports and proposals have been submitted. There are also strong grounds for hoping that greater progress will be made with the various chapters of the negotiations at the March 1999 European Council.

Negotiations with Hungary are continuing with the aim of completing them by the end of 2001. However, the Hungarian Government hopes that it may already be able to complete them before the end of 2000. Accession on 1 January 2002 remains the objective, although it is realised that minor delays are possible.

As far as the 'acquis communautaire' is concerned, Hungary's national programme, the ANP, was submitted to the Commission in March 1998. Admittedly, certain vital information was lacking at the time, resulting in some postponements. The further development of the programme is now proceeding excellently, so that the expectation in Budapest is that it should be possible to present the completed programme in May this year. Detailed answers are given to the political and environmental problems already raised in the progress report.

The talks at the various levels, particularly in the Association Council and the Joint Parliamentary Committee, are highly significant. The subcommittees also meet regularly. Here too, therefore, it is fair to say, in sum, that the work is progressing relatively rapidly and smoothly.

IV. Particular issues

European Union bodies have attached particular importance to relations with the Roma. It has been stressed that much remains to be achieved in this respect. However, there is evidence of a certain ignorance of Hungarian realities here. The problem of the Roma has existed for a long time and so far, because of strong individualism and tribal feuding, it has proved difficult to arrive at a comprehensive agreement.

Despite these difficulties, the Hungarian Government took a number of measures in 1997 to improve the position of the Roma. Some of them require long-term planning. Besides immediate practical programmes, medium-term programmes concerning education, employment (including in agriculture), social affairs, health and combating any discrimination which may occur are being drawn up. Ministers have been instructed to take a particular interest in these problems. It may be noted that elections to autonomous administrative bodies were held in October 1998 and that as a result Roma self-administration was instituted in 775 places and settlements.

There are also plans for setting up a separate interministerial commission in March this year to deal with the problems of the Roma. The President of the Roma Autonomous Administration participates in it. The commission is to consider, in particular, issues relating to education, culture, employment, agriculture, social affairs, health, housing, town and country planning and mass communications. Specific programmes are also being prepared to provide financial support for these projects. These are being included in the budget. By 15 April each year, reports on relations with the Roma are to be submitted to the Interministerial Commission, whose president is to give the government a precise account of the measures taken by 15 June. The Roma General Administration has been called upon to submit long-term programmes for promoting the integration of the Roma in a wide range of fields. The government's decisions on these will enter into force in the first half of this year.

As regards corruption, one point should not be forgotten: much of it derives from the era of Soviet occupation and the subsequent turmoil. A number of measures are being adopted, some of which are indeed already in force, while others are currently being introduced, to intensify the battle against corruption. This year, as last, the Hungarian Government is doing everything in its power to align Hungarian legislation on organised crime with EU provisions.

In the field of environmental policy, there is as yet a certain amount of catching up to be done. Even so, many of the provisions already correspond to those of the EU. Most of the difficulties arise from the fact that environmental policy was virtually non-existent under the communist regime. There is an environmental protection programme for the next six years, concerned mainly with cleaning up the air and water and dealing with refuse problems.

One difficulty is a certain lack of information about environmental protection, particularly among local organisations. The remedy lies partly with the Elchlepp report which was recently adopted by the European Parliament and was intended to facilitate environmental technology transfer to the Central and Eastern European countries. In terms of environmental protection, Hungary is something of a front runner among the Central and Eastern European countries which are not yet members of the EU. Environmental aid to Hungary ought to be further stepped up under the existing programmes.

It is intended that harmonisation of legislation should already be completed by the end of 2001. However, even after that date, work should continue with the aim of attaining the same level, in all fields, as prevails in the most advanced EU Member States.

One may conclude that Hungary has already made substantial progress in approximating its provisions to EU standards. Of course not everything has yet been achieved that needs to be, and in this connection one should not overlook the economic difficulties facing all the countries which were under communist rule until 1989/1990. Since their liberation, however, progress has been more rapid than could possibly have been hoped ten years ago, so that optimism for the future is justified. This optimism would be greatly enhanced if the EU were to make clear its determination to allow the countries concerned to join the EU as soon as possible, provided that they make the requisite efforts. This would undoubtedly impart even greater impetus to the efforts they have already made.