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Germany in Focus

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Hand-in-hand with Germany in the economy

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Apart from their historic dimensions, Hungarian-German relations have a strong economic drive that can be traced back to a certain geopolitical interdependence, reminded Dr. Gergely Prőhle in his presentation held at NUPS on 28 April 2016. According to the Deputy Secretary of State for International and European Union Affairs at the Ministry of Human Capacities, German capital is settling in Central Europe, and thus in Hungary, for the long term.

The workshop organized by the Faculty of International and European Studies of NUPS offered participants the opportunity to become acquainted with the history of Hungarian-German relations as well as their current developments. Being a former ambassador of Hungary to Germany, Dr. Prőhle reminded that the diplomatic relations between Hungary and the Federal Republic of Germany were officially established in 1973, although the first important, perhaps even symbolic, meeting was held in 1982 when János Kádár, General Secretary of the Hungarian Socialist Workers’ Party, had met with Willy Brandt and Helmut Schmidt, former and then German Chancellor respectively, in Bonn. The background of the polite, almost friendly meeting was the change in U.S. foreign policy perception regarding Eastern Europe, as at this point, the Americans were already intending to achieve the slow process of democratization and gaining of independence among Eastern European allies of the Soviet empire. After Chancellor Kohl assuming office, Hungarian-German relations had become more active which was also displayed by German President Richard von Weizsäcker’s visit to Hungary in 1986. In his historical review, Dr. Prőhle also mentioned 11 September 1989 as an important milestone when Hungary officially opened her borders to East German citizens heading to West. After the regime change, the Hungarian-German Forum was established which has been one of the most important institutions in the two countries’ relations. In order to express the tighter cooperation, Hungary and Germany signed an agreement on Friendly Cooperation and Partnership in Europe in 1992. Deputy Secretary of State Prőhle reminded that due to the deep relations between the Hungarian reform communists and the German Christian-democrats established before the regime change, Chancellor Kohl asked Prime Minister József Antall personally in 1990 to keep Gyula Horn as Minister of Foreign Affairs in the then forming Hungarian Government.

Dr. Prőhle also discussed the balanced and dynamically increasing economic relations between Hungary and Germany in detail, reminding that apart from the global recession, the last decades revealed an increasing growth in bilateral trade with the investments of German companies becoming more significant. German companies arrive in Hungary primarily from the regions of Bavaria, Baden-Württemberg and North Rhine-Westphalia, and invest in the areas of car manufacturing, machine industry, electronics, commerce and services. The former diplomat emphasized that German capital is definitely settling in Hungary for the long run.

The German-Hungarian Chamber of Industry and Commerce prepares a so-called annual conjuncture report on Hungary, based on surveys conducted among German companies. The 2016 report highlights that German and other international investors assess the Hungarian economic situation and this year’s prospects quite positively. In term of economic policies, the companies’ level of satisfaction has increased in several aspects, although certain areas continue to show considerable shortcomings like the shortage of experts, which pose risks for the Hungarian economy. From the German perspective, the operation of Hungarian expert and higher education training should be improved, as the domestic suppliers do not always meet Western European quality expectations. Deputy Secretary of State Prőhle added that Hungary is interesting for Germany as participant of regional cooperation and not by herself.