Hungarian PM announces Country Protection Plan

The latest plan by the government includes measures affecting the cost of borrowing, utilities prices and Hungarians with foreign currency-denominated mortgages. It also holds out the possibility of a higher VAT rate for luxury purchases and the expansion of a public jobs program.

Speaking before parliament on Monday, Prime Minister Viktor Orbán said the pace of reforms would be accelerated and a new sense of national solidarity established. The government will extend the system of centrally-regulated prices of household energy to water, sewage and trash pickup services. Orbán was of the opinion that the foreign owners of Hungarian utilities companies take "gigantic extra profit" from the Hungary.

The government wants to introduce a 35% VAT rate for the sales of luxury items and services and reverse taxation in the farm sector, he added. On these issues, Hungary will seek approval from the European Commission.

The government wishes to prevent the owners of failed companies who owe back taxes from starting new businesses. Another measure will be a 30% cap on the cost of borrowing as part of a "zero tolerance" policy on usury.

If the public work program of the government proves successful this year, people could be forced to join it en masse next year, working in the farm sector, in energy production and in big national investments. Denial to participate in these programs would mean losing the unemployment benefits.