Minister of State Zoltán Cséfalvay of the Ministry for National Economy identified financial stability as a precondition of growth on Thursday at a conference on the European situation held in Brussels which was organized by Friends of Europe, an independent think tank.

Minister of State for Economic Strategy Zoltán Cséfalvay spoke about the importance of financial stability and structural reforms adding that financial stability does not necessarily require austerity measures. “Financial stability has been a precondition of everything, among them of growth,” he stated. As he argued, reform measures initially have a recessionary impact and they can generate growth only in 3-4 years and the key question is how to pull through this period. The Minister of State said, the model of social market economy has been reasonable but a social market economy financed from debt, ridden by debt and generating debt is a failure. Minister of State Enikő Győri of the Ministry of Foreign Affairs was also among the speakers of the conference. Participants of the conference have sought answers for issues such as whether the gap between the rich and the poor has widened due to austerity measures, whether the right balance could be struck between fiscal constraint and growth, how large a threat this gap imposes on the future of the EU and whether governments are capable of stimulating enterprises and innovation amidst the recession. As the Minister of State explained fiscal adjustment is not the same as structural reform. According to his assessment, it has to be acknowledged at last that regarding reforms there is a three-speed instead of a two-speed Europe: some core countries, which have implemented reforms over the past decade, are successful and competitive while the countries from Central and Eastern Europe carried out reforms in the past 20 years which were sudden from a historic perspective and thereby these countries have undergone profound transformation. In contrast, in Southern European countries the pace reform has been extremely slow.

On Wednesday Minister of State Cséfalvay participated at the session of the Competitiveness Council of EU member countries where an agreement was concluded upon the regulations which serve as the basis of how projects financed by the Horizon 2020 framework programme aimed at stimulating research and innovation can be joined in the 2014-2020 EU budget period.

According to EU expert diplomats, this is a tremendous issue as it provides an overview of financial opportunities until the end of the decade which member countries may utilize when they apply for EU funding of research projects.

(Ministry for National Economy)