Govt sets up epidemic response and economy protection funds

Hungary’s government is setting up a special 663 billion forint (EUR 1.8bn) fund to combat the novel coronavirus epidemic and will reallocate 1,345 billion forints from ministry budgets to a fund aimed at protecting and restarting the economy, the head of the Prime Minister’s Office said on Saturday.

A significant reallocation of funds is needed to mount a successful response to the epidemic, Gergely Gulyas told a regular government press briefing, adding that the government will mandate political parties, multinational retail chains, banks and local governments to contribute their fair share to fighting the virus.

Contributions to the epidemic response fund will include 50 percent of the state funding received by political parties this year, taxes on multinational retailers and the financial sector as well as vehicle property taxes paid to local governments, Gulyas said. Political parties will have to pay 1.2 billion forints into the fund, taxes on retailers will make up 36 billion forints and banks will be expected to contribute 55 billion forints, Gulyas said. The vehicle property taxes to be diverted from local governments will amount to 34 billion forints, he added.

Contributions to the fund being set up to restart the economy will include 992 billion forints diverted from the various ministries and the 423 billion forints that make up the revenue of the National Employment Fund, Gulyas said. The government has spent some 100 billion forints on measures aimed at preserving jobs over the past month, he said.

In addition to the gross 500,000 forint bonus to be paid out to health-care staff in the summer, district nurses and health-care workers will also receive a 20 percent pay rise in November, the PM’s Office chief said. The summer bonus will cost 70 billion forints, he added.

Gulyas also said that the government will approve at its Sunday meeting Hungary’s biggest economic stimulus plan since the transition to democracy. The package, he said, would be enough to finance the government’s coronavirus response measures and “the hundreds and thousands of billions needed to restart the economy”. He said some 30,000 people have filed for unemployment since the virus made its way to Hungary, with some 4,000 jobs being lost each day since the beginning of April. The actual unemployment figure, however, could be higher, Gulyas said, pointing out that the number of job openings have fallen from 70,000 to 40,000-50,000 in the recent period. He said the government’s priority continues to be saving lives and protecting the health of the public, adding that the government has spent 380 billion forints on protective equipment so far.

Gulyas was also asked about “the new series of attacks coming from the EU” against the Hungarian government, the “cross-fire” it faced over its coronavirus protection measures and pledges to invoke the EU’s Article 7 procedure over the state of the rule of law in the country. He said the prime minister had given an appropriate response to these in saying that “we are preoccupied with our own protection efforts while Brussels is preoccupied with us”. “The Hungarian epidemic response law fulfils the criteria of the rule of law in every aspect,” Gulyas said. He said European press reports contained “countless lies” in connection with the law to the extreme that “went far beyond” any previous instances.

Gulyas said the opposition parties had declared their support for the majority of the government’s epidemic response measures and had only refused to vote for the related law because it did not set a time limit for the state of emergency.

The PM’s Office chief also lambasted what he called a “witch hunt” against Hungary over the government’s epidemic response law. He said that though the government had “got used to this over the past several years”, it still considered the current situation “infinitely unethical and incorrect” because the whole of Europe and the EU itself “should be concentrating on defending against the epidemic instead of focusing on certain member states”.

Opposition parties called for implementing a mix of economic stimulus measures different from the ones announced by Gulyas.

Socialist MSZP lawmaker Agnes Kunhalmi called for a proportionate and less selective “left-wing” package of measures that are more effective in terms of solidarity and preserving competitiveness.

Green LMP also welcomed the one-off payment to health workers, but called for a 50 percent general wage increase in the sector. The party called on the government to terminate “luxury investments” such as the large-scale Liget museum quarter project in Budapest’s City Park or the billions of forints’ worth of state support going to the Hungaroring company and to spend the money on combatting the coronavirus outbreak.

Balazs Ander, deputy leader of conservative Jobbik, called the measures “disproportionate”. While the government has left in place a thousand billion forints for the upgrade of the Budapest-Belgrade railway line, it has allocated a mere 70 billion for coronavirus frontline workers, who risk their lives every day to save others, he said.

Democratic Coalition leader Ferenc Gyurcsany proposed implementing a 3,000 billion forint bailout package accounting for 7 percent of GDP. The party’s package of proposals include protecting all jobs where possible with centrally provided wage benefits provided to ailing companies.

In short

  • Hungary has avoided an explosion of novel coronavirus infections thanks in large part to the effective and timely response measures put in place, the chief medical officer said on Saturday. Hungary has so far reported 678 confirmed cases, she said. There were six new deaths over the past 24 hours, all of them patients suffering from chronic diseases. Five of them were around the age of 80 and one was 54, Muller added.
  • Hungary received some 4 million face masks, more than 400,000 protective suits, 100,000 protective goggles, 30,000 pairs of gloves and more than 6,000 protective visors in consignments flown to Budapest from China on Saturday, the foreign minister said. In addition, the planes also delivered 400,000 samples of a drug developed and tested in China which international researchers believe is a promising treatment option for Covid-19.
  • Speaker of Parliament Laszlo Kover has expressed his condolences to Li Zhanshu, who heads the National People’s Congress of China, over the deaths caused by novel coronavirus in the country.
  • Prime Minister Viktor Orban, in a letter to Luca Visentini, General Secretary of the European Trade Union Confederation (ETUC), said his government will create as many jobs as are lost in the coronavirus crisis, after Visentini recently expressed concern over Hungary’s economic measures in connection with the epidemic.

Source and photo: MTI

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