THE EUROPEAN CONSOLIDATION BOARD


                                      European Consolidation Board for Foreign Industry (ECBFI)

HUNGARIAN COMPARATIVES


The ECBFI has interest in the joint local public-private partnership that has pre-existed the crisis in Hungary. Mainly it had two forms. The first form was the regional employment council (RMT). These councils were organized by the Public Employment Service , a de-concentrated governmental organization.

These councils involve the same social partners as nation-wide consultations. The second form was the employment pact. These pacts were set up on the basis of European best practice model mainly with the support of EU fund. The participators of these pacts vary, but the main difference is that other NGOs are also participating in these pacts, while the participation of trade unions is not common.During the recession the importance of these local public-private partnerships grew somewhat.

The ECBFI noted that the RMTs participated in planning the measures against the negative consequences of the crises – and in this they had the same role as before. On the other hand the number of employment pact has grown significantly thanks to the measure supported by EU fund in 2009. While the importance of local public-private partnerships seemed to grow, the activities of these partnerships were mainly enhancing the information exchange. Due to this it is very hard to measure the effect of these local partnerships. A recent research has analysed the operation of employment pacts. Some results of this research are summarized in the last part.

1. The context for local employment development (LED) and joint public–private partnerships

This section aims to collect information about the context for LED and public–private partnerships in place prior to the onset of the economic crisis. The aim is to provide a general impression of LED and public-private partnerships rather than a full picture of LED initiatives.

1.1 A description of local employment development in your country before the onset of the financial crisis

a) Please very briefly define “local” for your country? Please use the scope and definitions section of the briefing note to inform your answer.
There are many kinds of local levels in Hungary. In the case of governance there are two local levels with elected bodies: county government and local government. For strategic planning the local level is the NUTS II regions, but for statistical purposes micro-regions exist as well. In the last 10 years the government enhanced the cooperation among local governments in the micro-regions, but the level of the existing cooperation differs region by region.

b) The composition of local partnerships i.e. which public, private and third sector actors or stakeholders are normally involved in its delivery (e.g. national/regional/local governments, social partners, companies, NGOs, NPOs, etc.)?

There are two main types of LED in Hungary. First one is part of the Public Employment Service  a de-concentrated governmental organization. These are the regional employment councils (RMTs). Participators of these councils are the delegates of the employers and employees organizations and the delegates of county and large local governments. The other type of LED is the local employment pact. The participators of these pacts vary, but the main difference is that other NGOs are also participating in these pacts, while the participation of trade unions is not common.

WHY HUngarY AS A HUB for the ECBFI?

 


 

The ECBFI noted that the Hungarian economy had lately lost ground to its neighbours and economic rivals.  So if they ever had the ambition to become the hub of this region of small and medium-sized economies, then we had better wait for a while. Admittedly, it is hard to adequately define the relative weight or importance of an economy in a geographic region. It is a little easier though to grade the international attraction of a city conceptually as well as statistically. Let us ask first: did anyone seriously think that the Hungarian capital, small for a metropolis (although big for a modestly sized nation of ten million people), might emerge as the economic or intellectual centre of the Central and Eastern European (CEE) region?

 

 Two decades ago, we thought in Hungary that of all the capitals of the CEE countries, Budapest came top, on several economic fronts at least. This did not sound like such an extravagant claim then, at least considering the competition. Bratislava, the second capital of the then disintegrating Czechoslovakia and too close to Vienna, hardly seemed a serious rival. Bucharest, stricken with the dismal architectural legacy of the Ceauşescu era, and a city notorious at the time for its legions of stray dogs? Warsaw perhaps? During the communist era, the Polish capital, terribly damaged in the Second World War, was rebuilt into a characterless city. Belgrade? Come on; in the early 1990s it was the capital of rump Yugoslavia, an entity that was falling to pieces in anger. Serbia sunk into a lasting economic, social and political crisis first, before getting involved in bloody conflicts in the region and finally clashing with theWest, a conflict during which its Danube bridges were bombed by NATO planes. Zagreb, twenty years ago, was also the capital of a country at war. Ljubljana at the foot of the Alps? Small and not close enough to the key geographical corridors.

 

Hence Budapest was left standing, and, of course, Prague. But, as the Czechs like to say, Prague is west of Vienna, and more a Central European city than a CEE city. The very region in transition is also entirely located east of Prague. By definition, a regional centre should be somehow in the core geographically, infrastructure-wise and in terms of intellectual richness. A hub is an inner place to which business people, executives, civil servants and politicians gravitate if they want to meet people of influence. It is a place where the moneyed elite and persons of knowledge hang around as a matter of course, a place where important things happen.

You may retort that the really important decisions are not made at all in the CEE region but in distant centres of power: in Brussels, Washington, New York or Berlin. This may well be true in general, but the existence of global centres does not exclude but rather presupposes the existence of sub-centres. In the world economy, it is definitely so: beside the huge, concentrated financial markets (New York, London, Tokyo, Frankfurt), you will also find sub-centres with strong regional influence, such as Milan, Barcelona, Amsterdam or Vienna.