Active Cooperation with Hungary

“Hungarian-French relations are very good in general. After the difficult times of the pandemic, personal, direct consultations could also resume recently.”  That is according to the Ambassador of the Republic of France to Hungary, Pascale Andréani. In addition to describing the strong economic relations and active French investor presence here, she also outlines – in an extensive interview with Diplomacy&Trade – the priorities of the upcoming French Presidency of the Council of the EU.

France is set to take over the rotating presidency of the Council of the European Union in the first half of 2022. As regards the most important issues the French Presidency attempts to tackle over this six-month period, Ambassador Andréani highlights that “France takes over the Presidency from Slovenia from January 1st, 2022 with determination and the will to move things forward. There is a strong legislative agenda, with more than 150 documents, which will be dealt with over the period. Other topics prioritized in our agenda include the fight against COVID-19 and supporting European economies and industry; international issues; European defense policy and strategic autonomy; the question of migration; climate change and greening the economy; ‘social Europe’; and, of course, the future of Europe including a conference about it.”
She adds that France will endeavor to push forward these issues by listening to other Member States’ positions and trying to be a “honest broker” between all the Member States.

Involving the citizens
President Marcon spoke about “the need for the Union to have its own capacities to act and to make people act.” In order for that, France wishes to involve the citizens to more effectively act for a better future of the European Union.
The Ambassador stresses that President Macron launched, several months ago, the conference for the future of Europe, which should play an important role in “thinking about and defining how we want the European Union to evolve in the next years. It also includes a series of events and forums at the citizens’ level, which they can attend either in person or online. Several hundreds of discussions have already been organized all over Europe, and we know that Hungary is participating very actively in this process. The contributions, which will be collected through this channel, will be gathered and presented to the final conference in June 2022.”

Good bilateral relations
“Hungarian-French relations are very good in general. After the difficult times of the pandemic, personal, direct consultations could also resume recently. Our Minister for Europe and Foreign Affairs, Jean-Yves Le Drian made a visit to Hungary in September and held fruitful talks with his counterpart, Péter Szijjártó,” Ambassador Andréani adds.
She mentions several important fields in which cooperation with Hungary is active: “Hungary is participating actively in the conference about the future of Europe; in the field of common defense, Hungary is a partner on which we rely, and with whom we share the view that, without denying NATO’s role, Europe needs to strengthen and reinforce its own capacities; we also want to cooperate in the field of fighting against climate change and promoting clean energy resources; we share the view that nuclear energy is a clean energy that we need in the foreseeable future; and we also share the importance of digitalization in many fields of our lives and want to cooperate closely also in that field.”

TAKUBA operations
In March 2020, the TAKUBA special operations force was created on the initiative of France to carry out military counter-terrorism tasks in the tri-border area between Mali, Niger and Burkina Faso in Africa. Now, Hungary is the ninth country to join this initiative. As to how much – an in what way – Hungarian soldiers can contribute to these operations, the Ambassador points out that “Task Force TAKUBA is a unique European coalition attracting interest from a growing number of countries. The Hungarian commitment, like all the other contributions, is a tribute to European solidarity to face the terrorist threat in the Sahel region in concretely supporting empowerment of the Malian armed forces in the Liptako region. Special Forces are the core of this task force but any logistical support (air transport, medical evacuation capability, medical support, etc.) or Force Protection units are also valuable. The Hungarian commitment is substantial with up to 80 soldiers according to the parliamentary decision. The Hungarian special forces will bring their high operational experience and be a very precious support to the whole coalition.”
Regarding the defense aspects of bilateral relations between France and Hungary, she says that they are on the increase: this operational development in the TAKUBA operations comes in addition to the long running cooperation in air defense or air support (Joint Terminal Attack Controller – JTAC). The recent acquisition by the Hungarian army of helicopters ‘made in France’ (H225M) will also enlarge the spectrum of future possible cooperation. “More broadly, the European defense tools we are currently developing also bring more possibility to act jointly: the Permanent structured cooperation (PESCO) projects offer a new range of cooperation. In that regard, France participates in the Hungarian-led project on simulation for example.”

Economic relations
Based on statistics used by the National Bank of Hungary, France ranks as the fourth largest foreign investor (ultimate investor) in Hungary. Despite the pandemic, French FDI flows increased more in 2020 than in previous years (+ EUR 519 million in 2018 / EUR 256 million in 2019).
French companies have a very significant presence in this country, with nearly 500 companies operating in key sectors of the Hungarian economy. They have substantial sales of over EUR 9 billion, mainly in the industrial sector (particularly in the automotive segment). Just under 10% of French companies present in Hungary are large or medium-sized groups, while 35% are SMEs and more than half are very small businesses. In terms of employment, approximately 45,000 people work for French companies based in the country, the majority of which are in the retail sector.
France is Hungary's ninth largest trading partner. In 2020, bilateral trade contracted as a result of the epidemic (-3,3%, after +4,4% in 2019). “French exports have shown remarkable resilience with a limited decline of 0,9%, while our imports have deteriorated more significantly (-5,3%). The results for the first half of 2021 are very encouraging, as they show a strong increase in trade of 22%, or EUR 4.5 billion. Structurally, the industrial products (42.5% of our sales and 31.5% of our purchases), precede the items of mechanical, electrical, electronic and computer equipment (36.5% of our exports and 35.3% of our imports), that of transport equipment representing 13% of our deliveries and 25.7% of our purchases in Hungary,” she highlights.
Wizz Air Airlines has recently made public a large order of 102 airplanes of the A321neo Family during the aero show in Dubai. However, the positive effects of this deal on bilateral trade may only be noticeable in the medium to long run, due to the leasing construction in the contract, she adds.

Cultural ties
Cultural relations between the two countries date back centuries. The French cultural network in Hungary is made up of the Institut Français in Budapest, five Alliance Française branches in the Debrecen, Győr, Miskolc, Pécs and Szeged regions, and the Gustave Eiffel lycée in Budapest (around 750 students in 2021). Linguistic cooperation is also based on the ten French bilingual sections in Hungary, nine of which have the ‘FrancEducation’ label. The French-language university center (CUF) at the University of Szeged coordinates various French-language university courses and offers a double Master’s degree with the Institut d’études politiques (IEP) in Lille. Hungary has been an observer member of the International Organisation of La Francophonie (OIF) since 2004.
“As far as artistic issues are concerned, we are encouraging cooperation and organizing events in the fields of the performing arts, visual arts, cinema, digital media, books, design and debate. Hungary and France have both written major chapters in European cultural history, whether that be in the fields of music, photography or literature. The friendship between the composers Franz Liszt and Hector Berlioz in the 19th century for example, as well as the arrival of the Lumière Brothers' studios in Budapest, the importance of Franco-Hungarian literary relations, and the many artists of Hungarian origin who lived in France in the 19th and 20th centuries, such as Mihály Munkácsy, Brassaï, Robert Capa, Vera Molnár, and Victor Vasarely, are all worthy of mention. Through dialogue around this common heritage, which should be promoted, the French Institute ensures the visibility of contemporary French creation and works with the aim of developing networks between cultural professionals, artists and intellectuals from our two countries. In order to do so, the Institute is resolutely committed to Hungarian creative and artistic education centers, as well as programs for young professionals,” Ambassador Pascale Andréani concludes.

French investor presence in Hungary
One can regularly see news of new French investments (the latest of which is the Egis plant in Körmend, W Hungary, last month). The turnover of French companies is dominated by industrial companies, and in particular the automotive industry (27%). The rest of industry, distribution and health each account for just under 20% of the turnover of French companies. The balance is divided between service companies and those in the construction sector.
The main French companies (classified by sector and decreasing order of sales) are:
– Automotive: Michelin, Valeo, Opel PSA Szentgotthárd.
– Construction: Saint-Gobain, Colas.
– Industry: Suez, Legrand, Leroy Somer, Sagemcom, Schneider Electric.
– Health: Sanofi, Egis (Servier group), Chinoin (Sanofi group), Ceva-Phylaxia, Servier.
– Distribution: Auchan, Décathlon, Bonduelle, Danone, Savencia, Axereal, Lesaffre.
The Hungarian business environment is very favorable to investors. French companies invest and reinvest in the country because of its advantages: the high level of education of Hungarian employees, the attractive tax system and the quality of infrastructure, according to the Ambassador.