The Industrial and Entrepreneurial Section of the Hungarian Economic Association held a roundtable discussion on the global comeback of industrial policy and the divergent approaches of the V4 countries – Hungary, Poland, the Czech Republic, and Slovakia. Drawing on data from recent research, experts examined who spends how much, on what, and with what degree of effectiveness when it comes to state aid.
The discussion was moderated by László Kállay, lecturer at Corvinus University of Budapest. The underlying study, published in the journal Köz-gazdaság in September 2025, was presented by Dorottya Szabó (Business Promotion Association) and Tamás Csontos (Institute of World Economics, University of Szeged). The regulatory and practical aspects were supplemented by Filip Puzder, Senior Manager for State Aid at EY Hungary.
Is Industrial Policy Making a Comeback – or Simply Transforming?
One of the study’s core premises is that industrial policy has once again moved to the forefront internationally over the past decade. This trend has been reinforced by several external shocks: the COVID-19 pandemic of 2020, the Russian–Ukrainian war, and the United States’ Inflation Reduction Act. These developments have increasingly amplified industrial-policy thinking within the European Union as well, particularly in the context of economic competition with the US and China.
The roundtable participants nevertheless painted a more nuanced picture: in their interpretation, the use of state aid never ceased entirely; rather, it is the objective framework and the justification that have changed. Based on data from the EU State Aid Scoreboard, for example, Hungary ranked in the upper tier of EU member states over an extended period in terms of GDP-adjusted business subsidies. The emphasis, therefore, lies less on a “return” and more on a more deliberate, structure-shaping approach to economic policy.
Four Countries, Four Distinct Industrial Policy Profiles
The research used the New Industrial Policy Observatory (NIPO) database to examine the period 2017–2023, supplemented by the authors’ own, more detailed categorisation. The analysis clearly shows that the industrial policy practices of the V4 countries differ markedly from one another.
- Poland: The data indicate a more domestically oriented industrial policy model. A significant share of subsidies targets the development of state-owned or majority domestically owned companies, with development banks and state investment funds playing an important financing role. The strategy developed in the mid-2010s aimed to complement the foreign-capital-dependent model and was applied consistently across multiple government cycles.
- Slovakia: EU funds play a prominent role in financing. Among the measures, the weight of R&D-related subsidies is proportionally higher, yet sectoral concentration is high: the bulk of resources is linked to the automotive industry.
- Czech Republic: Industrial policy is strongly integrated into EU frameworks, while the support of foreign companies also plays a significant role. Compared to Hungarian practice, a greater degree of sectoral diversification is observed, with the semiconductor industry and other high-value-added activities present alongside the automotive sector.
- Hungary: The researchers consider Hungary’s case particularly complex. Based on NIPO data, reliance on domestic budgetary resources is high, and the support of foreign investments – including Asian companies – is prominent. Sectoral focus is, however, highly concentrated: the battery industry and electric vehicle manufacturing dominate the structure of state aid. In the case of projects based on individual government decisions, the geographical composition of supported investments has also changed substantially in recent years.
The Regulatory Environment and Key Turning Points
Based on Filip Puzder’s overview, EU state aid regulations have undergone significant changes on several occasions over the past fifteen years. During the 2008–2014 period, member states enjoyed relatively wide latitude, while the objective framework changed less. During the COVID-19 pandemic, the rules were temporarily relaxed to support corporate survival; subsequently, in the wake of the energy crisis and the US IRA, support for energy and green industry investments became more prominent. Several member states – including Hungary – actively utilised these opportunities.
An important institutional change also noted was that Hungary modified its aid-eligibility criteria from 2019 onwards: the role of job-creation requirements was reduced, while considerations related to wages and revenues gained greater weight.
The Scale and Effectiveness of State Aid
A central question in the discussion was the effectiveness of state aid. According to data cited by the researchers, Hungary ranked in the upper European tier for an extended period in terms of the volume of business subsidies as a share of GDP. However, examining the reduction of regional disparities and aggregate competitiveness indicators, the effectiveness of the subsidies can be characterised as weak.
Micro-level studies by László Kállay and Tibor Takács suggest that the impact of state aid presents a mixed picture. There are cases in which subsidies financed well-performing projects at resource-constrained companies. In the majority of cases, however, the subsidies financed projects that would either have been unprofitable without support, or for which the company had sufficient internal resources to implement the investment without aid. Consequently, the subsidies in the sample examined broadly reduced macroeconomic productivity. Short-term revenue growth can be observed at supported companies, but this is largely attributable to the direct income effect of the subsidies. The international literature partly reports “inconclusive” results regarding long-term performance effects because it overlooks the direct income effect of state aid.
Vision and Institutional Preconditions
One of the key questions in the conversation was that of industrial policy vision. According to the researchers, the central issue of industrial policy is not merely the scale of resources, but how they fit into a long-term structural transformation concept. László Kállay raised the point that a sectoral focus existed – particularly in relation to electromobility and battery manufacturing – yet it is a matter of debate to what extent this represented a genuine repositioning within global value chains. The participants agreed that a precondition for successful industrial policy is institutional capacity: clear eligibility criteria, continuous monitoring, and the administrative quality capable of reviewing decisions and adapting rapidly.
Is Visegrád-Level Coordination Possible?
The possibility of V4-level industrial policy coordination also arose. Most contributions were rather cautious: competition for sectoral investments – for example in the automotive and battery industries – frequently produces divergent national interests. Coordination is primarily discernible at the level of adaptation to EU rules; it is less evident in the form of a conscious joint strategy. In closing the discussion, László Kállay emphasised that the question of industrial policy merits further analysis, particularly in light of the prospect of substantial EU resources potentially available for industrial policy purposes in the future. Their effective deployment in a manner that strengthens competitiveness will remain one of the most important economic policy challenges in the