Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary - Strengthening strategic partnership through economic cooperation
Last year we broke the record regarding the level of foreign trade between Serbia and Hungary and this year, up till August, we had a plus of 4.7% on trade. Hungarian export already exceeded EUR 840 mil, so from our perspective we are satisfied. Of course, we have to explore fields where we can further expand this cooperation and we have already indentified them.
This is how Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary, assesses the current economic relations between two countries. In an interview with eKapija he speaks about Hungarian investments in Serbia, B2B cooperation and the economy development plan for Vojvodina, as well as about the construction of railway line between Budapest and Belgrade and strengthening strategic partnership through joint sessions of the Serbian and the Hungarian governments.
eKapija: Serbia and Hungary have numerous joint economic projects and the level of foreign trade hasn’t been this high in a while. Where is the cooperation most prominent - in which sectors?
- With MOL being the second most significant company among the fuel retailers here, they are ready to expand their presence here. Budapest Waterworks have being carried out successful negotiations with local municipalities in Serbia, then we have Hungarian electricity company, which has been involved in pretty intensive discussions with EPS about upgrading your electricity network and we have the biggest pharmaceuticals company in Central Europe with a fairly good share in Serbian market, but they are ready to increase it as well. So, I think these could be the flagships in the future.
Of course, OTP being the biggest Hungarian bank, they have established new regional headquarter for South Serbia in Niš, worth half a million euros. That’s another good start. Also, we have been working very hard on the modernization of the railway line between Budapest and Belgrade, which will give a huge boost to both economies.
eKapija: What is the current volume of Hungarian investments in Serbia?
- In 2015 we had EUR 232.4 mil of Hungarian investments realized in Serbia. We are ready to further expand it and we have launched the economy development plan for Vojvodina in total volume of EUR 150 mil for 3 years. During the first year we have already spent EUR 10 mil to support companies in Vojvodina, in the field of agriculture, small and medium enterprises and tourism. We are very grateful to the Government of Serbia for putting no obstacles for this cooperation.
We are satisfied with the business climate in Serbia, although our companies are looking for some changes regarding your regulations, but - there is always room for improvement.
eKapija: In early September, prime ministers Aleksandar Vucic and Viktor Orban have announced new joint projects of Serbia and Hungary. What can we expect and what is the status of negotiations on the construction of railway track Belgrade-Budapest?
- The flagship is the railway line between Budapest and Belgrade. Our prime minister and your prime minister took part at the Riga Summit of China and Central and Eastern Europe and there we have signed the necessary agreements. So, on the Hungarian side, the joint-venture of the Hungarian and Chinese railway companies has been established. This joint-venture has already been authorized by the Hungarian State Railways, which manage and observe the whole process, and we have already started negotiations about the loan with the Chinese Exim bank, so we can announce tender for construction in March 2017 and in July we could sign a contract with the contractor.
This is the plan because we have a situation that the Chinese have the obvious choice when they want to deliver their goods from Greek port to the Western and Eastern Europe - that should be through Serbia and Hungary. But with the current railway line between Belgrade and Budapest it is a big challenge.
eKapija: Foundation Prosperitati signed contracts in mid-August with farmers with dual citizenship (Serbian and Hungarian), who have received funding at public calls for purchasing land, development of tourism, purchase of equipment for the production, financing investments and purchase of equipment for micro and SMEs. How did this kind of cooperation come about and what is the main objective of public calls like these?
- When it comes to Hungary, we have minorities all around because of historical reasons and our approach is that the interest of ours is to strengthen our communities wherever they live, because this is in our interest and the interest of countries where these Hungarians live. So, that’s why we made this agreement in three categories – small and medium enterprises, agriculture and tourism. Foundation Prosperitati is an institutional background for that, and financing is issued by the Hungarian government – HUF 20 billion of direct cash incentives, not refundable, and HUF 30 billion of priority loan with very favorable conditions. During the first year there were 3,000 applications out of which 2,804 have received support of some HUF 3.03 billion.
Actually, that strengthens the Hungarian community here and that strengthens Serbian economy because consumption and economy growth get a new boost in this regard. I think that Serbian government understood that very well, that it is nothing against Serbia and Serbs – on the contrary, it coincides with the interest of Serbia.
eKapija: Hungary has also opened offices of trade representations in Serbia and Exim bank has a credit line dedicated to Hungary-Serbian cooperation?
- We have opened three trade offices – in Belgrade, Novi Sad and Subotica and it is actually a state-owned company supervised by the Foreign Ministry. This company has responsibility to promote especially Hungarian SMEs on foreign markets, to help them to be competitive there. These offices in Serbia have these obligations and it works pretty well so far. We organized a B2B meeting, we took companies to take part in fairs, conferences, to look for partners and cooperation...
Hungarian Exim bank has it branch office in Belgrade as well. This bank has a EUR 61.5 mil credit line especially dedicated to Hungary-Serbian B2B cooperation and with this I think we can give a new boost. Both Hungarian and Serbian companies can apply for this credit line, either for very simple import-export actions, either for joint-venture projects, either for running tenders jointly in the third markets.
eKapija: What are the other current projects of cross-border cooperation?
Peter Szijjarto and eKapija journalist
- We have applied together for establishing two new border crossing points - one should open on 15 July 2017 and the second one by 2018 at the latest. Also, we have applied jointly for another IPA (InterReg) fund, to plan and then construct the railway line between Szeged, Subotica and Baja and we have applied for some agricultural projects as well.
eKapija: Recently, Hungarian officials said that it is the interest of Hungary for Serbia to become an EU member. How significant is the European integration of Serbia for the economic relations of Hungary and Serbia?
- Generally, we are very pro-enlargement country. The thing is that the challenges Europe is facing right now can be overcome easier if we are not introverted. Unfortunately, it’s not a mainstream position now. EU is too much introverted because of being busy with old challenges, which is understandable but it’s not the right way to solve the issues. So, our position is that we have to push for enlargement – we are and we will!
When it comes to Serbia, we resist any kind of attempt to slow down this integration process because, simply put, if you look at the map – it’s EU, then the white hole which is Western Balkans, and then the EU again, which is stupid and crazy. We think that the more there are of us the stronger we are. And Serbia is definitely ready! Without hurting anyone I can tell that Serbia might be at least on the same level of development as some of EU member states. So, I don’t see why we wouldn’t accept Serbia as soon as possible.
When it comes to trade and economy cooperation, it would be much easier because we would have the same standards and regulations, there would be a customs union and bureaucracy and administration would be easier.
eKapija: What do you expect from the joint meeting of two governments on 20-21 November?
- First of all, we will strengthen our strategic partnership, because we shouldn’t be the victims of our own friendships. A couple of years back, this kind of relations between two countries was totally unimaginable. But both governments and both prime ministers put their efforts on improving this relationship. We understood that it is much better to have a good relationship in the neighborhood than to have a bad relationship. So, we have to show everyone that historical tensions can be overcome with good will.
Just having this joint meeting is a success. Second, we have something of substance to negotiate about – we have to discuss about strengthening cooperation between Hungarian electricity company and EPS, we would like to see more investments of Hungarian companies in your custom-free zones, and I agree with your minister Knezevic that our two agencies for export promotion have to work together to harmonize and help the mutual investments. We already have one Hungarian expert for EU accession who works with minister Jadranka Joksimovic, we have one for the Ministry of Agriculture, but I would say – if Serbian government needs more experienced people on EU law, regulations and accession, we are ready to provide you with them. That’s how we can support your accession struggle in practice.
And of course, we are talking about regional and European politics because there are so many happenings in the world recently, so many surprising things and our two prime ministers are very close when it comes to political vision – how they see the future. It’s always good for them to exchange the thoughts of these new situations. With Brexit and Donald Trump winning the US presidential election, the situation is getting a whole new aspcet in Central Europe.