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Dutch investors prepared to stay in Hungary

In bilateral ties, the main objective of the Dutch Ambassador to Hungary, Robert Milders, has always been to improve investor relations. He elaborates on this and other issues in an interview for the April-May issue of Diplomacy & Trade.

“Big firms usually find their way to achieve what they want, it is rather the small and medium-size companies that need our help. With the economic crisis worsening, they needed more help. The strength of the Embassy is having good contacts to the government,” he tells Diplomacy and Trade.

“The good news is that basically, none of the Dutch companies has left Hungary. True, there is still room for improvement in terms of transparency and predictability. We have joined forces with the representatives of other big investor countries, like my German, American, British and French colleagues and others,” he adds. This small group has from time to time confidential meetings with high-ranking government officials.

Confidential meetings

“At these confidential meetings with officials, we can openly ask questions and raise concerns without any of the participants being quoted. It is a good system of trust that works well, serving very much the objective of clarity, a forum where we can learn about the motives of the government, the reasons behind the real ‘tsunami of laws’ with quick changes going on,” Ambassador Milders says.

He notes that Dutch companies in Hungary have voiced their concern about some fiscal regulations. Philips, Shell, ING, Aegon, Heineken and others have been here a long time, some of them since the early 1920s. “They have always been prepared to take their share of the burden. They are ready to stay because they believe that, at some point, things will get better. In return, they expect maximum transparency, predictability and a level playing field.”

Trade

In 2011, bilateral trade between the Netherlands and Hungary totaled EUR 5.2 bn, with the balance showing a surplus in favor of the Netherlands. Dutch exports to Hungary amounted to EUR 3.2 bn, a 6% increase compared to 2010. The Netherlands is the third biggest exporter to Hungary among the EU member states, following Germany and Austria.

The highest growth was registered in the product group of raw materials and energy, and manufactured goods. Dutch imports from Hungary (in which food and beverages showed an annual growth of over 30% and manufacturing 8%) amounted to EUR 2 bn last year, showing a 10% decrease compared to 2010.

EU and Hungary

Regarding the European Commission’s recent warning that EU funds may be withheld from Hungary, the Dutch ambassador remarks that there is a lot of misconception in Hungary regarding what the European Union is about. He agrees with Bavarian Prime Minister Edmund Stoiber who said at the recent anniversary of the Deutsche Wirtschaftsclub in Budapest that “the European Union is the best thing that ever happened to its members.”

Ambassador Milders reminds that “sometimes, we tend to forget that the European region experienced peace, stability and growth over six decades due to European co-operation. Our children are doing much better than we were doing. While being members of this club of common rules and standards, every country is allowed to keep its national identity, that’s one of the strengths. Of course, you can leave the EU but that would hold out the prospect of a bleak future. I always say this to people whenever I have the opportunity but in my opinion, it is also the task of the Government. It is too easy to say that the ‘EU is colonizing us’, but the fact of the matter is that the EU provides EUR billions in funding for Hungary.”

Isolation is bad

He believes “the worst thing Hungary or any other country could do now is to isolate itself. The Netherlands, like Hungary, is also among EU members under scrutiny for excessive deficit, which means that we will have to provide a convincing budget plan to the Commission how we are going to redress the situation. I also wholeheartedly agree with Mr. Stoiber that we need to work now on growth, work on the economy and by doing so, substantially reduce bureaucracy. I hear from Dutch firms that a disproportionate share of their time is spent on filling out fiscal forms. They employ full-time tax experts and even then, they get fined for violations of rules and regulations they are not aware of. The EU’s step to hold out the prospects of cutting EU funding serves merely as a preventive measure and the Hungarian Government has now more than three quarters of the year to put things in order. If they do it – and I have no doubt they can - it will be for the benefit of all.”

Culture

In the field of cultural cooperation, Hungary belongs to a selected group of priority countries of the Netherlands. Strengthening Dutch market positions is feasible not only via purely cultural programs but also with the involvement of more economic-related cultural activities.

In addition to Dutch cultural events in Hungary that received very positive reactions both from the Hungarian public and the media, the Ambassador mentions the Sziget youth festival where the largest group of foreigners are the Dutch, about 14,000 of them. “Nowadays, as the economic factor plays a prominent role, we also focus on creative industries, giving special attention to architecture and design,” he adds.

In sustainable city planning, ‘DISC’ is a Dutch consortium of eight companies that make proposals for the city rehabilitation of parts of the 8th district in Budapest. The project offers the opportunity to share Dutch experiences on social integration, as well. The ‘Living with Water’ project in water management brings in world-excelling Dutch expertise and may create opportunities for Dutch SME’s to enter the market. Also, there are bilateral cooperation opportunities in the field of design management education, policy-making and industrial design. Each year, a prominent Dutch design manifestation is organized in Hungary, last year with the title ‘DutchDesignDays’.

The Ambassador and the Hungarians

“Budapest is such an action-oriented city that if something happens in Hungary, it usually happens here. Still, it is very pleasant and useful to visit the countryside. I have managed to visit the most important cities and towns of the country, including Debrecen where the university has a Department of Dutch Studies,” says the ambassador who admits to be a great fan of Hungarian wines, “one of the greatest products of this country, it is too pity that you don’t have enough to export more.”  He is also very honored that the ‘Critical Mass’ biker group always invites him for its annual rally.

Sándor Laczkó

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