Peer Review Personalised Action Programme for a new start: France Personalised Action Programme for a New Start: France Statements and Comments

Part 1: Brief assessment of the Hungarian labour market problems relevant to the personalised action plan for a new start (PAP-ND) Hungary is a rather small, open economy with low levels of unemployment (5.5 per cent in 2003) and employment (51 per cent in 2003) (KSH 2004). Despite the continuous and relatively high-level growth of the GDP in the second half of the nineties and at the beginning of this century, Hungary lags by about 10 per cent behind the EU average in terms of labour force participation rate (59.6 per cent in 2002) that affects mainly the youth (aged 15 to 24) and the elderly (55 to 64 years of age). Unemployment is, as in many EU countries, highly structural. Some 76 per cent of the unemployed stock consists of persons having 6 months or longer unemployment spells in 2002 (the EU average is 59 per cent) (Fazekas and Koltay 2003, OECD 2003). In addition a large number of the registered unemployed are recurrently unemployed. In 2003 the proportion of the unemployed with repeated spells among the registered unemployed was 80 per cent. The prevalence of both long-term and recurrent unemployment seems to hold true of the French labour market as well (Mizrahi 2004 p.4). Recent labour market developments have shown mixed results in terms of employment and participation rates. Although the dynamic growth of the GDP (almost 14 per cent between 2000-2003) indicates that the Hungarian economy is in a good shape, forces leading to net job-creation appear to be still relatively weak, resulting in a quite slow increase in the level of employment (Kézdi – Horváth