Military

DATE=4/11/2003

TYPE=CORRESPONDENT REPORT

TITLE=HUNGARY / E-U (L-O)

NUMBER=2-302082

BYLINE=STEFAN BOS

DATELINE=BUDAPEST

CONTENT=

INTRO: Hungarians vote in a referendum on Saturday on whether to join the European Union. Stefan Bos reports from Budapest that there is little doubt Hungarians will vote for membership.

TEXT: Opinion polls show that over 60 percent of Hungarian voters will say "yes" to E-U-membership. But the Socialist-led government is taking no chances. Foreign Minister Laszlo Kovacs recently told Hungarians what is at stake: "This is an opportunity for us to join the developed side of Europe. If we don't, we will be left behind."

E-U officials are so confident of the outcome of the vote that they are warning Hungarians that E-U membership will not automatically lead to higher wages. The European Union's ambassador to Hungary, Jurgen Koppen, told V-O-A that Hungarians and foreign investors should lower their expectations.

/// KOPPEN ACT ///

Wage increases, although they have been significant, the wage differential between this European location for investors and locations in Western Europe is still enormous. And it will take a while before Hungarian wages will reach Western European levels, even if they grow fast.

/// END ACT ///

Right now, there is a wide gap in earning power between E-U countries and those states in Europe outside the organization. /// OPT /// One study published in Hungary showed that while it took 15 minutes of work to buy a Big Mac sandwich in Luxembourg, in Budapest it still takes 82 minutes. /// END OPT /// The average wage for blue-collar workers in Hungary is less than 400 dollars a month, and some experts have suggested it could take two decades before salaries reach present E-U standards.

Yet Hungarian government officials are confident that E-U membership will boost Hungary's economy, trade relations, as well as its investments from abroad. Foreign investment is one area where Hungary is doing well. More than 70 percent of its industry is now foreign-owned.

However, foreign investors have cautioned that an enlarged European Union will lead to increased competition for the nation of roughly 10-million people.

/// REST OPT ///

E-U expansion takes effect on May 1st of next year. Most of the other new E-U members (Poland, Lithuania, Estonia, Latvia, the Czech Republic, Slovenia, Slovakia, Malta and Cyprus) will be former Communist states like Hungary.

While most Hungarians are optimistic about joining the European Union, at least one of them is a little concerned about the effect Hungary's membership will have on the organization.

A taxi driver (Jozsef Kolosi) told a reporter: "We've had communism, fascism, lost two world wars, and been ruled by the Turks for 150 years. We're always on the losing side, so I hope our luck has changed for the sake of the E-U." (Signed)

NEB/SB/KL/TW/KBK