EU Falling Behind the US in Competitiveness, Claims Minister of State

If it fails to act, the EU could fall behind in competition with the United States, Tibor Tóth, Minister of State for Macroeconomic and International Affairs at the Ministry of Finance, told Világgazdaság.

Although some of the EU funds withheld so far will be at last transferred to Hungary, according to the state secretary, the country would have been entitled to this money before. This delay has caused difficulties, both because of the need to ensure that sufficient funds are raised in the current war-emergency and because the situation has caused some uncertainty among international market players. The majority of investors had long ago realized the real motives behind the blockade in Brussels and saw the withholding of funds as what it really was: political action or rather punishment, he said.

Die EU wird immer mehr zum Nachzügler beim Wachstum. Überreglementiert, Hochsteuerländer, pseudogrüner Ökosozialismus, Massenmigration, Bildungskrisen, Sanktionswahnsinn, unfähige Kommissare. Ein EUntergangscocktail. pic.twitter.com/KjSbgMjd55

— Harald Vilimsky (@vilimsky) December 17, 2023

Tibor Tóth also pointed out that the 12th package of sanctions against Russia is currently under discussion in the EU, while the results of the 11 previous packages are not visible. Despite the war, Russia is improving its performance while Europe’s economy is stumbling, which is partly why the EU is being forced to make financial adjustments. Brussels imposed sanctions on Russia after fighting broke out, but these have contributed to a surge in energy prices, which has been one of the main reasons for the continent’s soaring inflation. High inflation has pushed up interest rates and the European Commission is now asking Member States for billions of euros in extra payments, among other things, to pay for higher interest rates on loans they have taken out together, he said.
At the same time, he said,

the European Commission, due to its own cumbersome bureaucracy, had so far only paid out a quarter of the recovery funds due to Member States, even though the pandemic had been over for two years.

Meanwhile, in the United States, targeted and effective support was provided to local businesses in the aftermath of the pandemic. This single factor alone is a serious threat to the EU’s competitiveness, he said.
The state secretary also told Világgazdaság that the ministry expects inflation to be kept below seven percent in December and five to six percent next year. Thus, real domestic wages could rise next year and the base rate could fall below 10 percent as early as February. Investors are also paying attention to these forecasts. It is no coincidence that Hungary is borrowing at ever lower yields. In the space of a week, Hungary has received two positive ratings, with Fitch Ratings following Standard & Poor’s in affirming its rating. “This means that despite the war, we will end this year with all three rating agencies recommending Hungary for investment,” Tóth pointed out.

Via MTI; Featured Image: Pixabay