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Mar 18, 2020

Coronavirus Update: PM announces suspension of principal and interest payment liabilities on loans

PM Orbán announces new economy and job protection measures adopted by the government due to the coronavirus epidemic.

During a national address on his Facebook page this afternoon, Prime Minister Viktor Orbán announced that the principal and interest payment liabilities on loans taken out by private individuals and businesses up to the present day have been suspended up to the end of the year.

In the video message, the prime minister outlined the economy and job protection measures adopted by the government due to the coronavirus epidemic.

- As part of these, short-term business loans have been extended until June 30.

- At the same time, the annual percentage rate (APR) of new consumer loans has been maximized at the central bank prime rate plus 5 percent.

- Additionally, in sectors already struggling with grave difficulties such as tourism, catering, the entertainment industry, sports, cultural services and passenger transportation – meaning taxi services – they are cancelling the contribution payment liabilities of employers in their entirety for a period extending to June 30.

- What’s more, the contributions of employees are being reduced significantly; they will not be required to pay pension contributions and the health insurance contribution will be reduced to the statutory minimum.

- PM Orbán added that taxi drivers paying their taxes under the regime designed for small businesses (KATA) likewise will not be required to pay their flat-rate tax liabilities.

- The termination of rental agreements and the raising of rentals will not be allowed.

- The government will also be cancelling the tourism development contribution for a period extending to June 30.

- The rules of employment will be more flexible; the goal is to make it easier for employers and employees to come to an agreement.

PM Orbán said that in the seven days since the state of emergency was declared due to the coronavirus epidemic, they have organized Hungary’s “collective self-defense”, the joint efforts to contain the global pandemic, but the time has come to also make decisions concerning the economy, in addition to decisions on disease control and healthcare issues.

The prime minister stressed that the global coronavirus epidemic is a threat not only to people’s health – “though that is the most important and number one priority” – but also to jobs; it also jeopardizes jobs.

The decisions adopted at the cabinet meeting on Wednesday are to protect jobs because “we have learnt in the past ten years that if there are jobs there is everything,” he said.

The prime minister highlighted that the first and most urgent decisions now adopted will be followed by others. Almost every day, further and further measures will be implemented with a view to restarting the economy.

The general decree regarding these measures will be published on Wednesday, while the detailed rules will be released on Thursday.

A call center set up for advice on the coronavirus can be reached on +36-80-277-455 and +36-80-277-456 or by email koronavirus@bm.gov.hu