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Regional Development inHungary Prior to the EU
Accession
Ms. Annamária Kékesi
International Centre for Democratic Transition
2015 March
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Hungary in the region of Central-Eastern Europe
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Hungary – General Information
• Area: 93.030 km2 (HU) / 603.500 km2 (UA)
• Population: 9.87 million / 44.21 million
• Ethnic majority: 83,7% ethnic Hungarian (2011 data) / 77,8% ethnic Ukrainian (2001 data)
• No. of regions: 19 counties / 27 regions-oblasts
• Memberships:
– Council of Europe- 1990 / 1995
– WTO – 1995 / 2008
– NATO - 1999 / -
– European Union/Schengen state – 2004 / -
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Historical Background
• No historical trace of regionalism in Hungary
• Ordinary sub-state units: counties (19+1)
• Socialist era reinforces centralization efforts
• 1989-90: Constitutional guarantee of countyindependence
• 2013: Legal reform of local governments
– Loss of independence / financial competence
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Timeframe of regionaldevelopment
1989 - Constitutional guarantee of loc. gvts.
1991 - Association Agreement of Hungary
1996 - Legal Framework of Regional Politics – Act XXI.
1998 - Introduction of the NUTS system
2004 – EU Accession (Pre-association funds stop, EU cohesion funds start)
2004-2006 – First National Development Plan (NFT I.)
2013 – Reform of local governments
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General ChallengesHungary is Facing
1. Extreme inequality between Budapest –Countryside
2. Stagnating unemployment rate
3. Aging society
4. Low level of private investments inunderdeveloped regions
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Map of counties and densityof population
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Unemployment rate of Hungary (2013)
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The NUTS system
• NUTS: Nomenclature of Territorial Units forStatistics – the introduction is obligatory for EU members
• The system consists of 5 levels– NUTS I: 3 regions
– NUTS II: 7 planning-statistical units
– NUTS III: 19 counties
– NUTS IV: 174 minor areas
– NUTS V: ~3100 settlements, towns, cities
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NUTS I. map
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NUTS II. map
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NUTS III. map
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Chronology of NUTS extension in Hungary
• NUTS II. – The basis of EU fund allocation
• 1996 – Regional development law – councils
• 1999 – Amendment of the law to increase theinfluence of the regions (NUTS II.)
• Annual country reports compiled by the EU
• General aim: NUTS II. instead of III.
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Pre-Accession Funds
• PHARE (Poland and Hungary Assistance with Restructuring the Economy
• ISPA ((Instrument for Structural Policies forPre-Accession)
• SAPARD (Special Accession Programme for Agriculture and Rural Development)
• Their purpose was to introduce EU fundingsystems and to prepare regions for CohesionFunds
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Hungarian Experiences withPre-Accession Funds
• PHARE – most successful, but complicatedapplication procedure
• SAPARD – unpredictable, regions could notaccomodate themselves to it
• ISPA – too large initiatives
• Generally: too much erroneous applications, but successfully „rehearsal” of EU funding
• Importance of SME (small-middle enterprises) support
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How to prepare for
• Bureaucracy
• Corruption
• Proposal and tender writing
• Project management
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Success stories_CBC
• https://www.youtube.com/watch?v=GFB9of5bdKE
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Thank you for your attention!