During the preparations for EU enlargement, the European Commission constantly sought to improve its knowledge of the challenges to social cohesion, and of the strategic policy responses adopted in candidate countries to tackle these challenges. An important milestone was the 2002 project to prepare for the accession states to plug into the ongoing process of exchange of good practice within the Union. With this in mind, a series of studies was conducted to describe and analyse the social protection systems in the 13 candidate countries on the basis of a common methodology, identifying the major challenges facing each in the social, economic and demographic contexts, assessing recent reform efforts, and highlighting major issues for further reform. TÁRKI prepared the Hungarian study, which covered such issues as pensions, health, poverty and social exclusion. Using a common format, the country studies described and analysed the main features of the social protection system as it was then, considering the economic, financial, social and demographic context in which the system operated.
"In the 1990s, Hungary had to manage a deep debt crisis, go through a long overdue restructuring of its industry, privatize its economy, build up the institutional background for a market economy, and create a social protection system in order to handle the social consequences of economic transition. As a result of the necessary measures taken by consecutive governments, GDP fell by almost 20 percent from its 1989 peak, in four years. Employment dropped from 5.2 million in 1990 to 3.6 million in 1996." (from the country report "Social Protection in Hungary")
Country study entitled "Social Protection in Hungary" from European Comission's site.
"The Hungarian economy has achieved strong growth since 1997, with a temporary slowdown between 2001-2003. Though the employment rate of the working-age population improved to 57% in 2003, it remains significantly below the EU average. Despite rising considerably in the recent years, the employment rate of older workers is also far below the EU average. Unemployment remained low at 5.8%, while its long-term component is still high (41.1 %). The activity rate totalled 60.6% in 2003 and remains one of the most acute problems of the Hungarian labour market. The problems of unemployment and poverty continue to have strong ethnic and regional related origins. With life expectancy at birth well below the EU average for both men and women, the health status of the population continues to remain a real concern." This is the assessment of the annual Joint Report on Social Protection and Social Inclusion that was finalised in March 2005 and focuses on social inclusion and pensions.