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Jun 03, 2020 - Zoltán Kovács

Mainstream media vs. reality, Part 3: Hungary’s economic response to coronavirus

The Hungarian government has been doing everything it can to help the country’s economy return to growth. And we’re doing it as we always have: by focusing on jobs. In all the international coverage about Hungary and the Orbán Government’s extraordinary measures to respond to the coronavirus pandemic, this was the great unreported story.

When it came to our comprehensive legislative package – the so-called Coronavirus Protection Act, which, by the way, helped save thousands of Hungarian lives during the last two months – instead of reporting on the benefits of our swift decisions, mainstream outlets chose to twist facts and talk about an “authoritarian” “power grab”. The new legal sanctions against disseminating fake news and scaremongering faced with similarly, groundless criticism.

On our special economic measures responding to the negative impact of the coronavirus pandemic these international sources remained conspicuously silent.

In mid-March, a few days after the state of emergency went into effect, Prime Minister Orbán became one of the first leaders in Europe to recognize that “[the epidemic] does not only put people’s health at risk, although that’s the most important, but it also threatens the economy,” announcing an array of new economic measures with the promise that this government would “create as many jobs as the epidemic destroys.”

Among these initial steps were much-needed tax exemptions for the hardest-hit sectors of the economy and a moratorium on all loan repayments until the end of this year, a unique measure that affects 7.7 million loan contracts, saving Hungarians nearly HUF 3.6 trillion (EUR 10.3bn) so far.

Understanding the gravity of the situation and the need for strong government incentives, PM Orbán announced additional economic relief programs in the first days of April, including the government taking over up to 70 percent of wage payments from firms that had to resort to shortened working hours due to the pandemic. A total of 105,000 employees, working for more than 8,000 companies, have benefited so far from this Hungarian version of Kurzarbeit.

Meanwhile, in an effort to stimulate job creation, the government has allocated HUF 450 billion (EUR 1.29bn) for investments and made HUF 2 trillion (EUR 5.7bn) available to Hungarian companies in preferential, government-backed loans. According to the latest figures, recipients of these preferential loans have helped preserve some 96,000 jobs so far. Plans to set up a HUF 1.35 trillion (EUR 3.85bn) epidemiological and economic fund were also put in motion early on.

Now that it appears we are beyond the worst part of the crisis and Hungary has become one of the few countries that managed to avoid a phase of large-scale infections, the rebuilding and reopening of our economy can begin. As PM Orbán said, “a work-based economy pulled us out of trouble in 2010, and it will do so again.” Even if mainstream media refuse to report on it.

Photo credit: adamsmithinternational.com