Construction site in Budapest

Concrete Proposals by the Budapest Chamber

April 4, 2020

After consultation with Budapest companies, the Budapest Chamber of Commerce and Industry (BKIK) developed measures and proposals that can be introduced quickly but can be applied for a limited time to deal with the economic situation caused by the coronavirus epidemic. These proposals were also sent to the competent bodies of the Hungarian government.

Following the appearance of the Covid coronavirus pandemic in Hungary, the Budapest Chamber of Commerce and Industry prepared proposals for dealing with the most urgent economic problems in the operation of enterprises – issues related to real estate rents, labor and inventory management.

  1. The burden of rents should be shared equally between the three parties during the period of public demand restraint measures. Property owners will receive one-third of the rent from the state, in exchange for relieving companies from paying another third. The entrepreneurs, depending on the decline in their turnover, should either pay the remaining third or receive a payment discount for this after the crisis. For the payment discount solution, the provision of a soft loan may be worthwhile with the involvement of commercial banks. In the case of contracts containing rents on a euro basis, we recommend fixing the fee calculation at the exchange rate of HUF 330 / euro for the duration of the crisis.
  2. The state should temporarily increase the number of people taking part in the public work scheme by 100,000 with immediate effect and provide the necessary resources.
  3. The state should create the possibility of safe construction work by all possible means.
  4. By rapidly mobilizing and reallocating EU funds, the government should create funding for – and launch – state and municipal construction projects that already have permission and implementation plans but have previously been rejected due to lack of funds.
  5. The state should urgently set up a labor force mobility fund to multilaterally support the flow of people, who lose their jobs in tourism, to agriculture and construction. As the salaries, working conditions and prestige of the industries concerned differ significantly, several types of aid must be applied at the same time. On the one hand, in addition to agricultural salaries, a monthly state wage supplement of HUF 50,000 is needed. On the other, in order to achieve labor mobility, it is necessary to support travel and accommodation costs.
  6. The government should temporarily amend the rules of implementation on wages for the duration of the crisis and maximize the rate of deduction from wages to repay previous debts by 10%.
  7. Extend the temporary tax exemption for full-time entrepreneurs who pay a fixed sum as tax monthly to all industries affected by the crisis.
  8. In the market sector, the number of people at risk among those with secondary and higher education is approx. 800,000. In order to keep these people’s jobs, the German ‘Kurzarbeit’ method must be adopted. If the employer undertakes to continue to employ its employees on a part-time basis until June 30 at the guaranteed minimum wage (this means a net salary of at least HUF 70,000), the state will supplement the employee's salary with HUF 100,000 per month for these three months. The state payment should be linked to a voluntary self-training program for employees in consultation with employers.
  9. Undertakings which have suffered a loss of inventory should receive a one-off public compensation, calculated as a percentage of turnover, according to the specificity of the industry's stock holding.


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