Country Report Hungary. Energy Policy and Policy Towards China

Topics: European Union, Hungary, Enlargement of the European Union Pages: 17 (6190 words) Published: June 24, 2013
5/15/2013
HUNGARY COUNTRY REPORT Energy policy and policy towards China

1) OVERVIEW1
1.1General information1
1.2Most important sectors (% of GDP, 2011)1
1.3Main import sources (2010, % of total)1
1.4Main export markets (2010, % of total)1
1.5Main expenses of foreign exchange1
1.6Main sources of foreign exchange1
1.7Political situation: Government with a two-thirds majority2
1.8Economic situation: A second IMF bailout package is needed2
2) MAIN REPORT4
2.1 History and Characteristics of Transformation4
2.2 National Democratic Governance5
2.3 Electoral Process6
2.4 Independent media7
3) HUNGARY & THE E.U.8
3.1 The history of Hungarian EU membership8
3.2 Energy Policy11
3.3 Policy towards China13
4) SOURCES15

1) OVERVIEW
1.1 General information
Capital: Budapest
Government type: Parliamentary democracy
Currency: Forint (HUF)
Population: 9.9 million
Status: Upper middle income country (GDP/capita: US$ 13,112 in 2011). 1.2 Most important sectors (% of GDP, 2011)
Services: 60 %
Industry/mining: 37 %
Agriculture: 3 %
1.3 Main import sources (2010, % of total)
Germany: 26.1%
Russia: 7.7%
China: 6.8%
Austria: 5.9%
1.4 Main export markets (2010, % of total)
Germany: 25.5%
Italy: 5.5%
UK: 5.4%
Romania: 5.3 %
The Netherlands: 4.4%
1.5 Main expenses of foreign exchange
Machinery and equipment (52 %),
Other manufactured products (32 %),
Fuel/energy (11 %)
1.6 Main sources of foreign exchange
Machinery and equipment (62 %),
Other manufactured products (29 %),
Food products (7 %), tourism
Source: www.atradius.com
1.7 Political situation: Government with a two-thirds majority Head of state: President Pal Schmitt (since August 2010)
Head of government: Prime Minister Viktor Orban (since May 2010) Form of government: Centre-right Fidesz party governs with an absolute majority in parliament In the April 2010 parliamentary elections the centre-right Fidesz party gained a landslide victory over the ruling Socialists, achieving a two-thirds majority in parliament (262 of the 386 seats): the strongest mandate a party has yet gained in post-communist Hungary. This large majority enables the government to amend the constitution without the support of the opposition. However, Orban ́s popularity has decreased sharply since the last general election 1.8 Economic situation: A second IMF bailout package is needed After years of private and public sector overspending, resulting in high GDP growth but also in high twin deficits, the economy fell into a deep recession in 2009. GDP contracted 6.3 %, as domestic demand-oriented sectors were hit by budgetary tightening while industrial exports suffered as a result of the economic meltdown in the Eurozone, as Hungary is heavily dependent on its exports to other EU countries. In 2008/2009, the forint plunged in the face of increasingly adverse global market sentiment against the Hungarian currency. A massive multilateral bailout package by the IMF and the EU (worth US$ 25.8 billion) was introduced to shore up the forint and deeply eroded international reserves. IMF-monitored fiscal consolidation led to a reduction in the budget deficit - from its record 9.3 % of GDP in 2006 to 4.3 % of GDP in 2010 - as the government introduced further austerity measures, curbing public sector spending even more and raising taxes: especially VAT. Growth has returned since 2010 but so far remains weak (1.2 % in 2010 and 1.5 % in 2011). source: HIS Global Insight

2) MAIN REPORT
2.1 History and Characteristics of Transformation
Hungary traces its history back to the Magyars, an alliance of semi-nomadic tribes from southern Russia and the Black Sea coast that arrived in the region in the ninth century. After centuries as a powerful medieval kingdom, Hungary was part of the Ottoman and then Habsburg empires from the 16th century onwards, emerging as an independent...
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