Hungary’s small and medium-sized enterprises receive one of the smallest shares of EU subsidies in the European Union, writes Világgazdaság. With only 3.3% of EU subsidies earmarked for SMEs for the period stretching to 2013, this puts Hungary third from last in support for the sector, behind only Romania and Ireland.
Hungarian Chamber of Commerce and Trade President László Parragh said the data were not surprising, adding that the negative trend has been apparent since 2006. He said it was shocking that among the four Visegrád countries, Hungary allocates the smallest percentage of subsidies towards SMEs.
Regarding appropriations for seven-year direct subsidies, the situation is somewhat better, placing Hungary 10th among the 27 member states.
Among new EU member states, Slovenia subsidizes its small businesses the most. In more developed countries, the appropriations for SMEs are above 10% and even near 20% in some cases.
Margit Rácz, a director of the Institute for World Economics of the Hungarian Academy of Sciences, said she believes the 3.3% figure would be adequate if an economic environment was created which made it possible to use the funds effectively, adding that this has not yet happened.
So if EU subsidies are well below the averager, then where are the subsidies going? And what benefit does the grant money give to the economy as a whole (e.g. does it build the tax base, or create better infrastructure)?
Also, what improvements does Racz think we need so that SMEs can flourish if funds were available?