Government adopts further proposals to restart economy

The government has adopted new proposals mostly concerning Hungary’s position in the international competition for investments.

The foreign minister said the government has adopted further proposals by the body in charge of measures to restart the economy, mostly concerning Hungary’s position in the international competition for investments.

Concerning the proposals, Péter Szijjártó, Minister of Foreign Affairs and Trade, said one concerned construction material production, a sector in which prices have sharply increased recently. He said that the government sought to improve the market positions of Hungarian companies, and decided to provide a HUF 5.5 billion grant to a HUF 14 billion (EUR 39.3m) project aimed at producing construction materials with a special technology in Biharkeresztes, in south-eastern Hungary.

The minister said that under another proposal, Hungary’s Exim Bank will provide subsidised loans totalling HUF 100 billion to the full range of the Hungarian business sector, adding that so far some HUF 500 billion had been distributed among 1,000 companies. He also announced a new development loan program for micro businesses using a budget of HUF 50 billion in the next 10 years. Borrowers will have 10 years to pay off their debt with an interest rate of 0.5 percent. The minister argued that banks were not interested in providing loans to the smallest companies because the loans were small and involved too much bureaucracy, adding that “it is important that the state assists them”.

Minister Szijjártó said the government has decided to speed up public procurement procedures to facilitate faster implementation of investment projects. Under the new system, the assessment of bids could be reduced from over one month to five days. Furthermore, the government will provide a service assisting potential foreign investors find ideal locations for projects in Hungary, he said. The government has also decided to allow foreign companies in Hungary to employ foreign workforce up to 20 percent of their headcount rather than the current 10 percent, Minister Szijjártó said, adding that “without that opportunity those companies will not expand their operations in Hungary, while this decision may help Hungarian employees retain their jobs”. The minister added that the government will set up a farmland fund of 400 million euros to help food producers to arable land, as required for stable raw material supplies.