orbán in audi factory
Photo: MTI/Koszticsák Szilárd

52 companies received 105 billion HUF (almost EUR 300 million) from the Ministry of Foreign Affairs and Trade distributing the allowances given by the government to large enterprises. Nobody knows the details of the process only the result: how much money a company received and how many new jobs it promised in return.

According to g7.hu, the altogether sum of the corporate tax the Hungarian budget got from the companies was 303 billion HUF which is 1/3rd of the amount mentioned above. Meanwhile, for example, the Hungarian court system gets 136 billion HUF from the state budget. All in all,

the 300 million EUR the government gave to 52 companies is a very generous financial help.

Furthermore, most of those favoured companies are multinational ones even though the government always speaks about that they would like to support the Hungarian enterprises. Interestingly, not only the volume of the financial support has been increasing for years but also the average money the government pays for creating one new workplace.

The only difference between the Socialist governments (before 2010) and Fidesz is that the latter gives such allowances to Hungarian companies, as well. However, all companies receive more so

multinational enterprises did not lose a penny

after the Hungarian companies joined the club after 2010. Since 2004, German companies have received 34 pc of such allowances while Hungarian companies follow in the second position with 19 pc. 

In 2019, some companies did not even promise to create new workplaces. For example, that is how the Robert Bosch group got 7.2 billion HUF (EUR 20.3 million) or the Egis 1.1 billion HUF (EUR 3.1 million). The Ministry said that they give money not only for new workplaces but also

for maintaining already existing ones and for raising productivity.

G7.hu says that even though many companies promised to create new workplaces, some did not meet that requirement. Furthermore, in the case of 13 companies, the number of employees decreased. Moreover, only four companies employ the number of people they promised in their contracts with the ministry.

G7.hu highlighted that the system is not too effective because if a depression comes, companies fire their employees, so the state support was in vain. In the case of the Audi Hungaria Ltd.,

the Hungarian taxpayers financed every 4th workplace

and each of that cost 11 million HUF (EUR 31,100). Meanwhile, Audi is very profitable in Hungary with a profit rate of 4.8 pc.

G7.hu concludes that there is no strategy behind the state support even though the 456 billion HUF (EUR 1.29 billion) would have been enough to reform entire sectors of the Hungarian economy.

Source: g7.hu

2 comments
  1. of course, totally makes sense… we have to pay people to keep jobs… Hungary is not an attractive investment destination, because things haven’t fundamentally changed during the last 20 years: poor infrastructure, bad schools, bankrupt healthcare, systemic corruption, too bureaucratic, too much cheating, overly complex taxation, high income taxes, unpredictable/arbitrary lawmaking, non-independent courts… in other words: too unproductive…

  2. Govt’s support goes mostly to multinationals? Even in these days of severe downturn? Quite embarassing, especially when the govt’is in the hands of people who constantly say that they are against multinationals and in favour of Hungarian and small business ….

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