DOMESTIC STRATEGY

 The proposed strategy ties in with the general Hungarian EU accession strategy. Since preparation for EU accession has been proceeding for many years, the players active in the process already know one another. Accordingly, personal contacts will be crucial to the success of the strategy.

The domestic strategy has three interrelated parts: coalition building, legislative, and public relations. These parts should move together simultaneously so that progress in one area can support progress in the others.

Full compliance with Community law by January 1, 2002.  This would mean that accession would take place before the next political election of May 2002, and that the present government would be able to take credit for the accession.

To achieve domestic consensus on the elimination of the derogation request on land ownership, we will need to build support among all stakeholders and convince legislators to initiate action on the proposed amendment. We should also target public opinion, in order to ensure that all stakeholders will pay attention to our message.

Players

1.  Groups that are in favor of revising the Land Act’s ownership provisions

• Ministries: Foreign Affairs, Justice, Economics, Finance

• Political parties: Socialist Party (MSZP), Free Democrats (SZDSZ)

• Interest group: MOSZ (representing agricultural production cooperatives)

• Processing industry[1]

• Hungarian landowners

2.  Groups that oppose revisions of the Land Act’s ownership provisions

• Ministry of Agriculture

• Political parties: Smallholders’ Party (FKGP), Hungarian Justice and Life Party (MIEP)

• Interest group: MAGOSZ (representing farmers and business cooperatives)

3.  Groups that oppose Land Act revisions but are more concerned with gaining full EU accession

• Prime Minister

• Political parties: Young Democrats (FIDESZ), Hungarian Democratic Forum (MDF).

I.  Domestic Coalition Building Strategy 

Since the coalition government holds the majority of votes, we will target it first.  However, we should begin by building support for the proposed Land Act amendments within the government in order to gain leverage along party lines. The immediate goal should be to get legislators to introduce the amendment in Parliament.

Background: Institutional Structure  

The forum responsible for coordinating the Hungarian government’s accession efforts is the Inter-Ministerial Committee for European Integration (IMC), which is led by the head of the Ministry of Foreign Affairs’ State Secretariat for Integration.  The Committee is charged with decision-making related to the implementation of the Europe Agreement and with preparing Hungary for entry negotiations.  The 27 inter-ministerial working groups that work within the IMC are responsible for drawing up negotiation positions. Representatives of unions, business associations and the academic community assist the work of the groups. 

The State Secretariat for Integration is headed by a State Secretary and two deputies. It oversees the IMC and carries out tasks defined by the government and the European Integration Cabinet. 

The European Integration Cabinet is headed by the Prime Minister. Its members include the ministers of the interior, justice, industry, trade and tourism, finance, agriculture, and foreign affairs.  Its functions include discussing integration issues that require government decisions; drafting recommendations concerning integration issues and the establishment of new government institutions; and monitoring the preparation and implementation of lower-level decisions. 

The Strategic Task Force for Integration carries out strategic research on European integration and is a part of the European Integration Cabinet to which it regularly reports.   

The European Integration Council (EIC) was formed in July 1, 1999, to promote a public dialogue concerning accession.  Members of the EIC include domestic interest groups, as well as their counterparts in the EU. The Minister of Foreign Affairs is a permanent participant, but other ministers also participate depending on the agenda.  The EIC meets at least four times a year.

Intra-Governmental Strategy  

The goal of this strategy is to coordinate with and get support from government agencies to pave the way toward implementation of our recommendation.  The ultimate goal of our intra-governmental strategy is to reach the Prime Minister and other ministers within the Integration Cabinet. 

Step 1—Coordinate views within the State Secretariat for Integration.  Participants in our discussions will include the Secretary of State, Dr. Péter Gottfried,[2] and the two Deputy Secretaries, Dr. Egon Dienes-Oehm[3] and Dr. László Molnár. Heads of working groups that work within the IMC on behalf of our Ministry should also be included (those such as Dr. Iván Udvardi, who is responsible for external affairs and security, and Mr. Tamás Földeák, who is responsible for cooperation on home affairs and justice). Minister of Foreign Affairs Dr. János Martonyi should be briefed on our discussions. 

Step 2—Introduce our concerns to the IMC. At the next IMC meeting, Secretary of State Gottfried should introduce our concern over Hungary’s large number of derogation requests. He should also request that working groups that prepare plans of alignment to provide alternatives to planned derogations.  Heads of working groups from our Ministry that we involved in Step 1 should help us build support for this suggestion.  Both formal and informal efforts will be necessary at this stage. 

Step 3—Push the Strategic Task Force for Integration to release analyses on how much delayed accession could cost the country. Starting simultaneously with Step 1, we will need to target the Strategic Task Force for Integration. We need to push it to 1) explain how partial membership would hurt our interests and 2) focus on the effects of foreseeable derogation requests. Such information will enable the MFA to focus on eliminating the most damaging derogation requests. By the time we reach the European Integration Cabinet, proposals should be in the hands of the respective ministers on how specific transition period requests could be eliminated. 

Throughout the whole process, members of the permanent delegates to the accession negotiations need to be kept apprised of our efforts. 

Strategy for Organizing Interest Groups and Land Owners 

With the goal of opening a dialogue and ultimately establishing a common platform among agricultural interest groups, we should initiate a series of roundtable discussions with these groups. A press conference should be held at the close of the initial round of discussions, at which time a joint statement should be made. 

Throughout the discussions, interest groups should be encouraged to educate their membership by holding similar discussions in local fora. Government representatives should attend these local meetings to the extent possible, and local media should be invited. 

Talking Points: Points that need to be emphasized to demonstrate the benefits of amending the Land Act: 

For MAGOSZ:

• The amendments will create a market for land, which, in turn, will increase the value of land and the availability of mortgage credit.

• The amendments give preference to farmers when there is competition for land acquisition.

• The amendments’ settlement and education requirements will help stop land speculation.

For MOSZ:

• The amendments will create opportunities to buy land.

• The amendments’ requirement for proof of necessity will give cooperatives an advantage over many other businesses.

• The amendments will increase opportunities for farmers to purchase, rather than continue leasing, land.

• The amendments will help spur development of Hungary’s agricultural sector.

• The amendments will facilitate Hungary’s accession to the European Community, and accession will have a positive impact on the country’s economy, including our agricultural sector.

Research Community 

The academic community should be asked to generate analyses of the projected positive benefits of our recommendation (both for agricultural and other interests). It should also be encouraged to initiate research on the medium- and long-term effects of our declining agricultural population on agricultural production. 

Research results should be published in journals, such as Gazdálkodás (Farming), Gazdaság és Gazdálkodás (Economy and Farming), Gazdaság és Jog (Economy and Law), Gazdaság és Statisztika (Economy and Statistics), Gazdaság és Társadalom (Economy and Society), Gazdaság, Vállalkozás, Vezetés (Economy, Entrepreneurship, Management), etc.  The Strategic Task Force for Integration also publishes a series on issues relating to EU accession.  Although only a limited number of people read these journals, those who do read it are precisely those who can use and spread the information effectively. 

II.  Domestic Legislative Strategy

The goal of the legislative strategy is to establish a common platform among legislators and ask for their support for withdrawing the derogation request on land acquisition. FIDESZ legislators should be our primary targets because: 

• FIDESZ is the most powerful political party in the Hungarian Parliament.

• FIDESZ has expressed its strong support for family farms.

• EU accession by the target date is in FIDESZ’s interest.

• If FIDESZ decides to support the amendment, the other two political parties on the government coalition will most likely join.  (Except for MIEP, which represents just four percent of votes, the opposition is already likely to be in favor of changing the Land Act.)

Strategy 

FIDESZ representatives that are on the Budget and Finance, Economics, and Agricultural Committees or Subcommittees[4] should be given special attention.[5] As a first step, they should be approached informally via personal contacts. Later, once private discussions have prepared the ground, these representatives should also be invited to the Ministry of Foreign Affairs for a more formal briefing and discussion.   

This strategy will need to be put into action as soon as possible because Parliament will elect the State President in June.

Talking Points 

When talking with FIDESZ legislators, we need to emphasize the elements of the recommendation that support FIDESZ/government policy and the constituencies of the representatives. We also need to stress why each element of our proposal is important because, ideally, FIDESZ should introduce the amendment, and therefore it will have an opportunity to modify our amendment. 

• The proposal offers the opportunity to decrease Hungary’s number of derogation requests and therefore an opportunity to help ensure our full EU membership by the accession target date.

• The proposal ensures that only a limited number of foreigners will be able to gain land ownership.

• The proposal ensures that speculators will not be able to bid up the price of land.

• The proposal gives priority to farmers who wish to acquire land.

• The proposal controls farmland acquisition by businesses.

• The proposal guards against undue concentrations of land ownership.

• The proposal will help establish a basis for competitive agricultural production.

III.  Domestic Public Relations Strategy 

The main objective of the public relations strategy is to make certain that the Hungarian people maintain their perspective on the accession process. Legislators and the entire population have worked hard to achieve compliance with Community law. We need to remember that such compliance is not mandated by the EU. Rather, Hungary has decided to join the EU because it will be beneficial for Hungary. 

Due to the sensitivity of the issue, no massive campaign specific to land ownership will be launched.  Instead, land acquisition should be addressed indirectly through the Official Communications Strategy. However, the following actions should be taken to further raise awareness of the benefits of EU accession: 

Provide the media with information. EU accession is already high on the media agenda. We will need to ensure that media outlets have accurate and abundant information on the accession process. Good ways to achieve this is through press releases and press conferences. 

Improve the Official Communication Strategy. Official communications need to reach more people than they currently do. [6]  Specifically, the Strategy should be updated to: 

·        Increase the use of the broadcast media. In addition to Hungarian National Radio, popular commercial radio stations like Radio Bridge (Budapest-centered) and Danubius Radio (countrywide coverage) should be used to disseminate information.  Ads should run on Hungarian National Television, as well as commercial nationwide television stations like RTL Klub, TV2, or regional broadcasts.  Commercial radio and television stations reach every layer of society and are, therefore, an effective avenue for reaching the public.

·        Explore alternative means of advertising. For example, billboards near smaller towns and the Budapest Metro should be used.

·        Continue MFA participation in fairs and expositions. The same applies to “Europe Days.” 

·        Continue to build awareness through the Internet. As our coalition building increases, interest groups will post news and our negotiated common goals.  So will newspapers and magazines.

Ask popular politicians to go on TV and radio to discuss the benefits of rapid EU accession and the need to reform land acquisition policies. The best person to enlist is Mr. Árpád Göncz,[7] our State President until August.  He will most likely remain an important voice within the country even after he leaves office. He should be enlisted now, before he leaves office. 

Publish a thematic brochure titled “The Hungarian Population within the EU.” The brochure should discuss Hungary’s declining population, with special emphasis on the decline of the agricultural population, and should propose various options to address this problem. The brochure can be distributed through the European Information Centers[8] throughout the country as well as at fairs that the Ministry of Foreign Affairs attends.  

Use national and local papers to emphasize the benefits of EU membership and land acquisition policy reform. In regions where agricultural production is particularly important and where resistance to changes in land ownership policies is strongest, newspaper supplements would provide an ideal means of addressing the public directly.[9]  Supplements could contain information similar to that contained in the thematic brochure. They could also include interviews with representatives of countries that have already applied and acceded to the EU. The interviews could explore fears regarding foreign land ownership and the extent to which these fears have or have not been realized. Nationwide papers we should focus on include:

• Népszabadság: the most popular (center-left) paper; one million people read it daily

• Magyar Hírlap: liberal / business daily

• Magyar Nemzet: popular daily

• Mai Nap, Blikk and Kurir: the three most popular tabloids

• HVG: a reliable economic weekly

• 168 óra: a popular political weekly

Encourage interest groups to raise EU membership and land acquisition issues with their memberships. Such groups could also organize and fund various events in the countryside. 

STRATEGY FOR ACCESSION NEGOTIATIONS 

Hungary applied for European Union (EU) membership in March 1994. Its accession negotiations started in November 1998, during the EU’s first enlargement round. Hungary is preparing to accede on January 1, 2002. So far, Hungary has finished nine of the 31 screenings required of accession candidates. The screenings are designed to ensure that candidates’ laws and regulations conform to the 31 chapters of the EU’s acquis communautaire, which details the laws and rules adopted on the basis of the EU’s founding treaties—mainly the treaties of Rome, Maastricht, and Amsterdam. 

The European Union began screening discussions with Hungary concerning the free movement of capital on September 30, 1999.  Since then the Commission and Hungary have been exploring alternatives to derogations.  (The content of the accession negotiations and the progress being made between sessions are confidential and not available for public review.)  Talks on problematic issues will remain open until all 31 chapter screenings have gone as far as they can. At that stage, problems that remain unresolved will be negotiated as a package.  

Timing

Hungary plans to have all 31 chapter discussions opened and 15 screenings completed by the end of the Portuguese Presidency of the European Commission. Before the end of next year, Hungary would like to see all problematic issues cleared.
 

EU and Hungarian Negotiators

Preferred Outcome

Convince European negotiators that the proposed modifications to the Land Act will bring Hungary into compliance with Community law.

Best Alternative to a Negotiated Agreement (BATNA)

If the EU does not find the proposed Land Act amendment acceptable, we will have to maintain our current request for a ten-year derogation or gain acceptance of our new amendment as a temporary solution. We may also be able to engage the EU in a discussion of how alterations to our proposal could make it a permanently acceptable solution. 

Tactics  

We will have to explain why the proposed ownership provisions of the Land Act are still relatively restrictive. The EU needs to understand that this is the result of the many domestic factors that need to be taken into consideration.  We can expect resistance to the amendment concerning the order in which the right of preemption is established (because it discriminates between private persons and companies). The following talking points should be used.

Talking Points 

·        The main goal of our proposal is to bring our land ownership legislation into compliance with Community law.  The amended Land Act will allow no discrimination between Hungarians and EU nationals. 

·        Article 222 of the Treaty of Rome states that the Treaty “shall in no way prejudice the rules in Member States governing the system of property ownership.” In other words, the Treaty gives each EU member the authority to establish its own laws concerning property ownership. 

·        The amendment provides that lessees, owners of neighboring plots, private persons registered as producers, and legal entities will be given the right of preemption for land acquisition in that order. Because persons in the first three categories (except foreign persons) are already eligible to buy land under current regulation, companies (legal entities) will gain new land acquisition rights immediately. 

·        Hungary plans to adopt the European agricultural model, which, as described in AGENDA 2000, is based on family farming. The preemption provisions of our proposal are necessary to ensure that family farmers will not be forced off their land. 

·        Giving preference to family farmers does not violate the Hungarian Constitution.  When the Land Act entered into force, agricultural cooperatives turned to the Constitutional Court to test whether the Act discriminated among natural and legal persons as well as between various legal persons. The Court ruled that 1) the Land Act is not contrary to the constitutional right of equality before the law because the acquisition of property is not the only way for agricultural cooperatives to gain access to land necessary for operation,[11] and 2) the government has the right to design its own economic policy.[12] 

·        To acquire arable land in Denmark, farmers are required to have lived permanently (at least six months per year) for eight years on a farm, and they must have an agricultural background.  The general rule is that only individuals are allowed to acquire agricultural holdings. Companies are allowed such holdings only under very strict conditions.  German legislation also encourages land ownership by qualified[13] farmers by giving farmers priority over non-farmers when there is competition for land acquisition. 

·        Denmark, Germany and Spain have all included special safeguard clauses in land ownership legislation to avoid undue land aggregation. Moreover, Denmark, Germany, Ireland, Italy, Portugal, and Spain have all enacted legislation to prevent the subdivision of land.[14] 

·        In accordance with the short and medium-term goals contained in the Accession Partnership 1999, our proposal will aid the fight against organized crime and corruption, and will strengthen law enforcement.  The amendment will help reduce speculative purchases and legalize pocket contracts. 

·        The proposal will help resolve several problems that now delay the development of a competitive agricultural sector. It will encourage land consolidation and increase the availability of credit for farmers. It will also ensure that businesses that need farmland for their operation will be able to acquire it.

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