Donald Tusk declared victory after the first day of tbe European council, and not without reason. The perspective of agreeing to start creating an energy union was not rosy , several member states were weary to give up their independence, among them the Hungarian prime minister, who made several shady energy deals with Russia, including an obscure offshore company skimming the difference between the cost an sales price of gas supplies and a nuclear power plant (some ten years in advance of the real need of starting it, if energy needs i. 2035, the expected expiry of life of the present plant, is at all foreseeable) to be constructed exclusively by the Russians and also financed by a loan from them), but other countries were also not enthusiastic. So what about the result? Euobserver analysis is cautiously optimistic. The conclusions paint a more sober picture than the triumphantdeclarations: they reflect the limitations imposed by the self-interest of the member states jealous to save their separate ways: ..".the European Council focused on some of the aspects", "ensuring full compliance with EU law of all agreements for buying gas from external suppliers" - isn't this so without emphasising it? "confidentiality of commercially sensitive information just be guaranteed" -as if Orbán had it dictated... And finally: "assessing options for voluntary demand aggregation mechanisms" - no common buying arrangements, just assessing options; emphasising sovereignty and right of the member states twice. Some positive e!ements are no doubt a!so present: cooperation,reinforcing the legislative framework for secure supply of electricity and gas. So, the first small steps were taken. But the plans earned already criticism: this article reveals why the development of domestic energy resources and the freedom of member states to decide on their energy resources features prominently in the text: Poland is strongly dependent on coal and wants to develop shale gas. See also here So it was not just the reluctant followers who got their special deal, but also the leader.

What does the Hungarian minister of the national economy (including finance) know and understand?

According to a press article,the minister of the national economy, Mihály Varga (this superministry integrated or rather melted into itself the finance ministry, ministry of economy, labour and the different sectoral ministries - foreign trade, commerce, industry etc.) declared that the Hungarian government will not follow the recommendation of the European Council (it is prepared by the Commission but descussed in the Council and signed by the president of the Council) to cut tax benefits to poor people. Apart from the fact that low earners in Hungary have no special tax benefits (they were abolished by the FIDESZ government to cover partially the costs of the flat personal income tax), the article states that Varga confused the tax wedge with the tax benefits as the coutry-specific recommendation to Hungary proposed to decrease the tax wedge for low earners (see point 3 on page 7). Actually the document complains in an earlier paragraph (number 12 on page 5) that the" tax wedge on single low-income earners is one of the highest in the EU". Probably Mr Varga should have read the Hungarian version. There, the translator (who knows why, certainly not fearing misunderstanding by an economist and economy minister) translated the tax wedge to "tax burden" (pages 5 and 8 as the Hungarian text is somewhat lengthier).
The recommendations are denouncing the sectoral extra taxes (with the following justification: "The application of different tax rates across sectors is an obstacle to the effective allocation of resources
and thus negatively affects growth" and recommend a more equitable tax system. This is no surprise. No surprise either but very instructive are, however, some other statements about the situation of the economy and about economic policy: "Notwithstanding the Central Bank's subsidised 'Funding for Growth' scheme for small and medium-sized enterprises, normal lending to the economy has not picked up in a sustainable manner." (see also in Hungarian: Why the "funding for growth" programme did not help?)
"The regulatory burden on the financial sector has been
further increased, thus limiting the capacity for capital accumulation. Measures like
the increase of the financial transaction duty have contributed to a pick-up in the cash
usage of the economy. The household portfolio has further deteriorated and the high
proportion of non-performing loans currently represents one of the biggest
challenges for the financial sector. Portfolio cleaning is hindered by the weak
efficiency of resolution proceedings."
Also interesting: "The youth unemployment rate has decreased in 2013, while the rate of young people who are not in employment, education or training has increased." -  hints to the phenomenon often discussed in the Hungarian economic press that employment figures may hide more than reveal the real processes. "The Public Work Scheme attracts the bulk of budgetary resources available for employment measures, but in 2013 less than 10% of its participants were able to return to the open
labour market after exiting the scheme."
"The business environment in Hungary is characterised by frequent changes in the
regulatory framework and limited competition in an increasing number of sectors.
New barriers have been introduced in the services sector and existing ones have not
been removed (e.g. pharmacies, waste management, mobile payment, retail tobacco
and textbooks)."
"Overall investment has declined particularly strongly in those sectors
where sector-specific surtaxes have been imposed in recent years. Between 2010 and
2013, nominal investment declined by 44 % in energy, 28 % in finance and 18 % in
the communication sectors, while increasing by 3.4 % overall."

And so on, and so on. So if after this, the minister of national economy says that Brussels does not require adjustment any more, obviously concentrating on the budget balance (in fact this is also a little false as the recommendations state: "Reinforce the budgetary measures for 2014 in the light of the emerging gap of 0.9% of GDP relative to the Stability and Growth Pact requirements, namely the debt reduction rule, based on the Commission 2014 spring forecast. In 2015, and thereafter, significantly strengthen the budgetary strategy to ensure reaching the medium-term objective and compliance with the debt reduction requirements in order to keep the general government debt ratio on a sustained downward path."), he forgets his role beyond being the minister of finance, to be very polite. For the uninitiated: a lot of criticism and recommendations target the governments pet measures, denounced also in Hungary even by economists who supported FIDESZ before.

There are problems also in the social area (another superministry is the Ministry of Humnan Resources): "The proportion of early school leavers is on the rise and the adoption of an early
school leaving prevention strategy has been repeatedly delayed." - and this in the context when compulsory upper schooling age has been decreased.

A final quote: "Review the impact of energy price regulation on incentives to invest and on competition in the electricity and gas markets. Take further steps to ensure the autonomy of the national regulator in establishing network tariffs and conditions. Take measures to increase energy efficiency in particular in the residential sector." - Another pet project, the "decreasing utility charges" is under attack. If we look what was written above about the investment scenario, we see why. The criticism of the public procurement system is very diplomatic, but sstill, recommends improvement. THis would, however, stop the government from distributing public work contracts to its cronies. No surprise but very sad that the minister shows himself deaf.

Food speculation and food prices - food for thought

The German left-leaning daily Süddeutsche Zeitung has first called attention to the research of Ingo Pies which called into question the statement of a report from Foodwatch and other reports of Oxfam and the Welthungerhilfe , renowned non-profit organisations, that speculation (forward index deals on food prices) has contributed to the recent steep increase in food prices. (Deutsche Bank has published an English version of the article.) Mr Pies deals with ethics of the economy and is rather sympathetic to ONGs, he himself founded one as a student. The main point of his argument is to list the real reasons for food price increase, but he also shows that prices of other raw materials also subject to forward index deals have not risen. The reaction of the two organisations is at least disappointing: Oxfam just states that they did not demand the total ban on these deals just their regulation. Andreas Winkler, responsible for public relations in Foodwatch reacts in a comment saying also that they did not ask for total ban, but also implying that only hedging is a justified reason (he writes that they are a certain degree of speculation is useful for farmers, dealers and processors) and finally stating that if speculation did not increase prices, it has increased their swings. He also points out that their study was dealing with all counter-arguments. The counter-arguments of Jens Berger , that the speculators are always the counterparty of the farmers and that they are always winning and thus always interested on price rises, is just showing that he does not really understand how markets and forward deals in particular work. It has to be noted that before there was an exchange between Foodwatch and Deutsche Bank where the bank’s reaction was rather muted and not too convincing. As a result, Commerzbank stopped dealing in food speculation . Further information can be found on the following site (in German)

How did the Hungarian presidency do?

A lot has been said and written about this. I try to summarise here the main legislative initiatives: which succeeded and which failed.

Economic governance: failed on one question where no political agreement could be reached. The issue is going to be put back in the agenda by the Polish  presidency which seems to attribute a lower priority to this question. Hungary did not join the Euro plus agreement as one of a handful states citing "tax competition" as the reason. Enikő Győri, state secretary for European affairs stated that the left in the Parliament was looking for the right thing (growth) at the wrong place (budgetary discipline) however, the one difference left (from over 2000) is about budgetary discipline and not about growth: whether sanctions should be automatic.

Roma strategy and Danube strategy: the Roma strategy was initiated in the Parliament by a FIDESZ MEP of Roma origin and well received. The Commission (partly its Directorate Generals under the Hungarian commissioner (nominated by the previous governing party) was swift in working out the strategy which was endorsed by the Council. The approach was criticised by human rights groups as minimalistic, but it has to be recognised that the EU does not really has competencies in this area.  The Danube strategy was already in the making when Hungary took over (just like the Swedes had a Baltic strategy accepted, it was logical that the Hungarian presidency aims at a Danube strategy and the other members of the Trio (Spain and Belgium) probably gave a helping hand) and accepted during the presidency's term, These are issues where no EU money is directly involved and thus their real impact remains to be seen.

Authenticity of the electronic edition of the Official Journal: pursued with ambition and  intelligence but still pending on the issue of which treaty article is the legal base. This could further reduce the use of paper and thus help the environment but also improve efficiency of those who work with European legislation, Clearly a must in the 21st century.

No result on labeling of „high-tech foodstuff” i.e. genetically modified foodstock and "new foodstock" in general failed but a general food labeling regulation was finally accepted the 6th july. This latter harmonises the indication of ingredients and nutritional value on packaging and is a good result in face of differing interests.

"The outgoing Hungarian EU Presidency failed to adequately tackle some of Europe’s biggest environmental problems, the European Environmental Bureau (EEB) has said in an assessment. While positive on mercury, biodiversity and GMO cultivation, EEB said several issues were undermined by a lack of political commitment and leadership"  http://www.eeb.org/EEB/index.cfm/news-events/news/assessment-of-hungarian-presidency-bad-on-climate-energy-good-on-biodiversity-and-mercury/

Croatian accession negotiation – closed but no accession date fixed explicitly by the Council, although July 2013 seems to be the date.

Energy policy: The presidency achieved a deal on the 2020 energy strategy just before the Japanese disaster and the new strategy also creates more transparency and eliminates some of the European Gas network's inefficiencies (gas dead.ends of which Hungary is one and which hinder that Eu countries share their resources in case of shortages or other problems).
In transport, Hungary brought to decision the agreement on cross-boarder traffic fines (not a big joy for some motorist) which was a long-lasting saga. Also, agreement was reached on the Eurovignette for trucks.

In internal affairs, strictening the rules for sexual abuse of children and child pornography, an agreement about Frontex helping member states with immigration problems were positive but European Voice quotes MEPs that in this area legislative work was hindered by the political quarrels over Hungarian domestic policy.

It was a mistake to set the aim of getting Romania and Bulgaria into the Schengen area, the achievement of recognition that they are technically ready was what could be and was attained.

Agreement was reached that the suspension of the Schengen accord is only allowed in exceptional circumstances but the presidency did not react to the Danish measures contravening this.

I think the reader can draw conclusions, my aim was to collect in one place most of what could be collected on the main legislative measures as legislation is the field where the presidency (of the Council) is active. Political issues are treated in the European Council which has a permanent president.