BBJ: How would you characterize the German-Hungarian relationship today?

Julia Gross: In these very days, Germans celebrate the miracle of German reunification. In so doing, we must not forget that the gates to reunification were opened in the summer of 1989 by Hungary in Hungary, as President Frank-Walter Steinmeier pointed out in Sopron last year. Germany and Hungary share close economic and cultural ties that have developed over a long period. We stood by Hungary’s side when Hungary worked so hard to prepare for EU membership. But to our greatest regret, the world has certainly not become calmer over the past years. Alongside ongoing conflicts, tensions, and confrontations, what deeply concerns us Europeans is the Russian war of aggression against Ukraine. This brutal conflict underscores more than ever that in a world where the existing legal order is in turmoil, we Europeans must stand united. For in our heart of hearts we know: We will only be heard, in Washington, Delhi or Beijing, if we speak with one voice. The recent negotiations on the new tariffs introduced by the United States were a stark reminder in this regard. 

Against this dire background, it is a blessing that Hungary and Germany are today closely interconnected multilaterally, especially through the European Union and NATO. These alliances are integral to our prosperity and security. When we do not see eye to eye, we should redouble our efforts to resolve our differences and remember our shared European heritage and common future. It saddens me that Europe is often referred to as being part of the problem, not of the solution.  

As Chancellor Friedrich Merz put it, Germany is ready for even closer cooperation, but we are running out of time, and we cannot always wait for everyone.

We will also make greater use of opportunities to move forward with like-minded groups and lead the way in projects and processes that would hopefully be joined by many of our partners, and Hungary has an important role to play.

BBJ: What is Hungary’s role in German Foreign Trade

JG: Germany is and remains Hungary’s most important economic partner, both as a supplier and a customer. In 2023, German exports to Hungary totaled EUR 31.6 billion, while imports from Hungary reached approximately EUR 39.2 billion. This reflects a robust and balanced trade relationship.

Over the past three decades, Hungarian exports to Germany have increased tenfold, a remarkable development. Without the European single market, the strong economic development would not have been possible. It will continue to be central to economic growth in and between our two countries, which is why we should appreciate and defend it. Despite modest economic growth in both countries in 2024 and early 2025, the partnership remains solid, with Germany accounting for roughly a quarter of Hungary’s foreign trade in both directions. Germany wants to take on responsibility and not only strengthen its own competitiveness, but that of the entire EU. This is a big task for the times ahead, and hopefully, all partners will work together on it.

BBJ: Beyond the well-established automotive sector, which other industries have attracted notable German investment in Hungary?

JG: German investment in Hungary is characterized less by singular megaprojects and more by steady, long-term commitment. About 3,000 German companies operate in Hungary, investing two to three billion euros annually in the expansion and modernization of their Hungarian locations. This underlines Hungary’s continued strategic relevance for German business.

While the automotive sector remains a cornerstone, German companies across nearly all industries are expanding their activities. Retailers are enhancing their logistics networks, telecommunications providers and companies are investing in infrastructure, and the service sector is growing through business service centers nationwide. New areas of cooperation are also emerging, notably in defense, solar energy, energy efficiency, and, increasingly, in aerospace. German companies not only create jobs and contribute to Hungary’s export performance but also to workforce development and innovation. A great case in point was the opening ceremony of the BMW factory in Debrecen on Sep. 26: a plant that exemplifies the future of the automotive industry and which is fossil-free and climate-neutral. It is truly good news that Hungary and Germany are writing this new chapter together.

BBJ: How are current economic conditions shaping the outlook for German-Hungarian business relations?

JG: Despite the solid foundation of bilateral economic ties, global uncertainties are affecting business sentiment. DUIHK surveys show that companies are cautious in their employment and investment plans, with optimism and concern currently roughly in balance. Much will depend on how international trade relations evolve, particularly in light of shifting U.S. trade policies.

Germany and Hungary, both highly export-driven economies, share a strong interest in restoring open and fair global trade. Hungary continues to offer key labor market advantages, including a motivated workforce, high-quality vocational training, and a modern legal framework. However, rising labor costs and a shortage of skilled workers continue to be challenges for many companies.

Still, the outlook is positive: The transformation of the automotive sector toward electromobility is expected to generate new growth opportunities. As companies adapt to changing conditions, the German-Hungarian economic partnership is likely to gain new strength and to remain forward-looking. That said, there are sectors of German business in Hungary, particularly in the areas of retail and services, which are not entirely happy with how the legal framework is evolving. It is good that there is a channel with the government to resolve these important issues.

BBJ: How important are cultural exchanges to the relationship, and how much of your time is dedicated to this?

JG: Mutual cultural understanding is highly valued in diplomacy and business alike. It helps form and maintain relationships, especially in challenging times. Therefore, the German Embassy promotes exchanges in education as well as in the fields of music, literature and the arts.

The embassy’s work is closely linked to cultural mediators and institutions, and thus benefits from a constantly growing network of students and artists in both countries, as well as representatives of the German minority in Hungary.

Our main partner for cultural exchange is, of course, the Goethe-Institut Budapest. I am really looking forward to visiting the joint booth of Germany, Austria and Switzerland at the international book festival in Budapest. The fact that former German Chancellor Angela Merkel is presenting her memoir, “Freiheit” (“Freedom”), in Hungary is a highlight.  

Then there is the upcoming film festival “Sehenswert,” also organized by the Goethe-Institut, beginning on Oct. 9. The festival showcases new film productions from Austria, Switzerland and Germany; the movies will be shown in cinemas in Budapest, Pécs, Debrecen and Szeged. I hope to meet many of your readers at these and other occasions!

This article was first published in the Budapest Business Journal print issue of October 3, 2025.