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Hungary, France sign strategic cooperation agreement

Prime Minister Ferenc Gyurcsány and French President Nicolas Sarkozy signed an agreement on a strategic partnership between Hungary and France in Paris.

The agreement, signed at a ceremony in the Elysee Palace, establishes a five-year framework program which aims to continue policies that serve the best interests of both Hungary and France. The agreement is a continuation of a cooperation agreement signed by Hungary and France in 1991.

Gyurcsány said after the signing that the agreement could give new impetus to Hungary's economy. He said Hungary offers France opportunity in the areas of biotechnology, R+D and communications, adding that the country's natural sciences and technology education programs are among the best in the region.

Gyurcsány noted that France was late to discover the CEE region. Even today, annual trade between France and Hungary is just €6 billion, compared € 10 billion alone with the German state of Bavaria.

Gyurcsány said Hungary's government has carried out far-reaching reforms of the higher education and healthcare sectors, though it has been forced to stop at a point because of strong opposition by politicians and voters.

Gyurcsány said Hungary's tax system must be changed. The changes will be “more than the usual annual adjustment, but less than a tax reform,” he added. The goal of the changes will be to create workplaces, offer incentives for investments and lessen the tax burden. The government is looking for a chance to scrap the 4% “solidarity tax,” introduced in 2006, which would leave businesses with a 16% corporate profit tax - the lowest rate in Eastern Europe. It also seeks the opportunity to eliminate the Ft 2,000 flat per-employee healthcare fee, lower payroll taxes and simplify the procedure for filing taxes.

Gyurcsány presented, in the name of President László Sólyom, the Cross of Republic to Pierre Guenant, who heads the La Baule international investors conference and the Poitou-Charente country economic council.

Guenant announced the establishment of the Hungarian-French Chamber of Commerce, founded with about 50 Hungarian members and 20-25 French members. The chamber will hold its first meeting in Budapest in June. (MTI – Econews)