Economic fears propel Hungary to consider reopening the country after May 4th

Although the Coronavirus pandemic in Hungary has not yet peaked and with 2,284 confirmed cases of COVID-19 and 239 deaths, the Orbán government announced that it will be prepared to begin re-opening the economy soon after May 4th. On April 29th, the government intends to announce its plan on re-opening the economy. The current model predicts that the coronavirus will peak in Hungary on May 3rd, although there is no exact science to determine how long it will stay at that peak level. Not unlike in some cavalier Republican-led American states, such as Georgia and Texas, although admittedly taking a more measured and cautious approach, it appears as though the Hungarian government’s main consideration in easing lockdown measures as soon as possible may be to salvage the severely battered economy. Presently, more than 51,000 Hungarians have lost their employment and are registered with government agencies as job seekers. Prior to the coronavirus outbreak, there were 70,000 vacant jobs in Hungary and the dearth of qualified workers threatened several industries. Today, the number of vacant jobs has declined to under 40,000. Analysts with credit insurance company Euler Hermes estimate that the number of businesses in Hungary that become insolvent would grow by 13 percent and that the Hungarian GDP could decrease in 2020 by between 3 percent and 7 percent. It is estimated that unemployment in Hungary will double, rising to 8 percent.

Gergely Gulyás speaking on Thursday.

Gergely Gulyás, Minister of the Prime Minister’s Office, indicated that Hungary wished to capitalize as soon as possible on a 300 to 400 billion forint major investment from Samsung to its plant in the town of Göd, a municipality located 22 kilometres to the north of Budapest. Samsung’s expansion is hugely controversial, as the town’s prior political leadership and Fidesz Mayor József Markó, appeared to have been in the corporate pockets of the South Korean giant and agreed to create an industrial zone in the area, reducing both agricultural lands, as well as forests. While Göd had hoped to fund the town’s budget in significant measures from the new tax income arising from Samsung’s expansion, the national Fidesz government declared the area a zone of national strategic importance and therefore the municipal government lost both control over regulating the expansion, as well as the new revenues that may arise from it. The decision to effectively circumvent the town was reached after the local Fidesz mayor was replaced following the 2019 municipal election with centre-left mayor Csaba Balogh, who expressed concerns about the fact that 80 hectares of land would be built in, and toxic material would be stored there. Mr. Gulyás’s concern for proceeding with this initiative as soon as the lockdown is eased relates to the national government’s recent power grab in the area.

Mr. Gulyás also addressed criticism over the government’s handling of the pandemic, particularly the decision to vacate fifty percent of hospital beds by sending home patients requiring professional care in a hospital setting with almost no notice to family members and non-professional caregivers. In some cases, hospitalised cancer patients were sent home as well. Mr. Gulyás defended the decision as one supported by the medical profession. At the moment, 10 percent of all those who are confirmed to have contracted COVID-19 are healthcare workers; the majority of deaths are in nursing homes and retirement homes.

While the national government looks to begin re-opening the economy after May 4th, the Budapest municipal government, led by centre-left Lord Mayor Gergely Karácsony, is preparing to add further restrictions. Beginning Monday, April 27th, it will be mandatory to wear a mask in all stores, shops and on public transportation. Mr. Karácsony acknowledged that the new measure would bring added discomfort and frustration, but asked locals for their cooperation as the city fights the pandemic. Although the relationship between left-centre Budapest and the national government is poor, Mr. Gulyás confirmed that government officials in the capital city would respect the regulations enacted by the local government and would wear a mask when in public.

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