Union subsidy ? state subsidy, commissioned by Financial Research Ltd

The most frequently mentioned element of Union accession, considered by many to be the most important, is the acquisition and distribution of community subsidies. The question is whether the subsidy Hungary receives from the European Union is essentially different from what until now we have called state aid. Will the subsidy received from the Union become a component of domestic redistribution? Initial and as yet incomplete experience suggests that it is a matter of a shift in proportions rather than a sharp turn. Although additional funds flowing into the economy are still slight, the Union subsidy and the co-financing commitment have not replaced the earlier redistribution, but have come along side it to some extent. Redistribution within the economy has therefore probably grown slightly following accession, despite the fact that enterprises only received one third of the structural funds directly, the rest being granted to non-profit organisations and to the state administration in control of distribution. The weight of decisions made by the single state apparatus has not changed, and may even have grown. The system of tenders has not become exclusive at all.

2006. (Éva Voszka)

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