Martin Schulz needs a refresher course on EU ‘subsidies’

As POLITICO reported (Martin Schulz to Viktor Orbán: No refugees means no subsidies, June 13), German Social Democrat leader Martin Schulz said he would push the European Union to cut off subsidies to countries like Hungary that oppose the bloc’s migrant resettlement scheme.

Clearly, Schulz faces a tough election contest, in which he is reportedly trailing Angela Merkel’s Christian Democrats by double-digit margins. His statement could simply be chalked up to campaign rhetoric. But as the former president of the European Parliament, Schulz should have a better understanding of how these “subsidies” work.

Perhaps a little refresher course is in order.

Structural funds are not a form of charity to the EU’s less fortunate member countries. These funds, established in the 1970s for the southern member countries, help build cohesion and overcome differences in economic development among EU members. That helps the common market.

In exchange for receiving cohesion funds, less-developed member countries have opened up their markets to companies from all other EU countries. More than a few German companies have profited handsomely from that deal, enjoying unfettered access to new markets, new sources of high-quality labor and, in the case of Hungary, the lowest corporate tax rate in the EU at 9 percent.

As European Commissioner for Budget and Human Resources Günther Oettinger said in an interview with Handelsblatt, “Germany should be interested in the structural funds.” After all, “from an economic perspective, Germany isn’t a net contributor but a net recipient.”

And to Schulz’s point about “solidarity in refugee policy,” we might ask, “What refugee policy?”

Signatories of the Schengen Agreement and the Dublin Convention have agreed to common rules of border protection and asylum, but the EU does not have a functioning refugee relocation policy.

Hungary, joined by Slovakia, is challenging the previous European Council decision on a mandatory resettlement quota in the European Court of Justice. While we await that decision, we encourage German companies to join their many compatriots doing business in Hungary.

Zoltán Kovács

Government spokesperson, cabinet office of the prime minister

Budapest, Hungary