In July 2008, the government established the Economic Conciliation Forum, envisaged as a consultative body dedicated to improving the competitiveness of the Hungarian economy. While many of the actors in the business community welcomed its establishment, trade unions rejected it from the outset, claiming that their representation in the body was unsatisfactory and that it challenged the function of the National Interest Reconciliation Council.
The idea of an economic consultative forum was put forward by the Minister for National Development and Economy, Gordon Bajnai, during an economic forum of the governing Hungarian Socialist Party (Magyar Szocialista Párt, MSZP) in June 2008. At the government session of 25 July, the government accepted the minister’s proposal and established the new consultative forum. Meanwhile, the government withdrew the mandate of two previous reconciliation forums: the Council of Business Development (Vállalkozásfejlesztési Tanács, VFT) and the Council of Competitiveness (Versenyképességi Tanács, VT).
Establishment of new forum
The new Economic Reconciliation Forum (Gazdasági Egyeztető Fórum, GEF) comprises delegates of eight ministries and a wide range of business representatives, including: two employer organisations representing large companies, two economic chambers, one representative of foreign chambers working in Hungary, two representatives of small and medium-sized enterprises (SMEs), and the Council of Investors (Befektetői Tanács, BT). In addition, two permanent guests would be invited: one person nominated by the Ministry of Environment and Water (Környezetvédelmi és Vízügyi Minisztérium, KVM) and one representative of the trade union side at the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT). It is worth noting that at least three employer organisations which are present at OÉT are also among the founding partners of this new forum.
The head of the Ministry for National Development and Economy (Nemzeti Fejlesztési és Gazdasági Minisztérium, NFGM) chairs the meetings jointly with a vice-chair, elected by the employer side. The forum is scheduled to have regular meetings at least four times a year but may hold up to 12 meetings each year upon request. Such extraordinary meetings can be convened by the vice-chair at the written request of at least one third of the business side.
GEF has received a relatively wide authorisation which, besides consultative and evaluation functions, includes the capacity to propose practical amendments to laws and regulations concerning the economy. The forum’s fundamental objective is to ensure that the business community has a say on issues directly affecting economic growth. Accordingly, the issues expected to feature on its agenda include reducing the administrative burden for companies, reforming taxation and setting the national minimum wage. Obstacles to business development arising from the Labour Code may also be addressed.
Trade union position
Clearly, GEF has overlapping responsibilities with the OÉT: up to now, the social partners have consulted on issues such as the minimum wage or labour legislation exclusively at the OÉT. It is not surprising therefore that the six trade union confederations represented in the OÉT rejected the idea of the new forum from the beginning and demanded that the government revoke its proposal and start working seriously within the established framework of the OÉT. Furthermore, they accuse the government of showing prejudice when it withdrew the mandate of VT, where trade unions had full representation.
Nevertheless, a slight division arose among certain trade union confederations. The Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA) immediately issued a declaration of straightforward rejection of GEF without any prior negotiation with other confederations. Subsequently, the President of the Confederation of Unions of Professionals (Értelmiségi Szakszervezeti Tömörülés, ÉSZT), László Kuti – also the current chair of the workers’ side at the OÉT – called for a fully negotiated and joint reply to the invitation to send a representative to the new forum. However, in the end, the trade unions decided unanimously to boycott GEF. Moreover, the Alliance of Autonomous Trade Unions (Autonóm Szakszervezetek Szövetsége, ASZSZ) recently declared that it would bring the case to the Constitutional Court (Alkotmánybíróság, AB).
Commentary
The reorganisation of consultative forums underlines the highly ambiguous behaviour of the present socialist government towards the social partners. Given the 20-year experience of tripartite consultations in Hungary, it is surprising that NFGM, which is responsible for setting up the new forum, claimed to have held extensive negotiations with all relevant actors of the business community while completely failing to contact trade union confederations. Furthermore, it is unexpected in terms of party politics, as the governing MSZP forged an alliance with some of the trade union confederations during previous general election campaigns (see, for example, HU0504101N). The move also seems questionable from a policy perspective regarding consultative institutions, as the government chose to establish a new consultative forum, which will presumably raise constitutional concerns, instead of resolving existing constitutional problems connected to the OÉT (HU0701039I).
Márk Edelényi and László Neumann, Institute for Political Science, Hungarian Academy of Sciences